Trump revives plan to end quarterly reports: What it means for US markets

US President Donald Trump said he wants US companies to report earnings every six months instead of quarterly, but critics warn it may hurt transparency

US President Donald Trump has once again called for American companies to move away from quarterly earnings reports and instead disclose results every six months. In a Truth Social post on Monday, Trump argued that the change would reduce costs and curb short-term decision-making by corporate leaders.

 

“This will save money, and allow managers to focus on properly running their companies,” Trump wrote. “Did you ever hear the statement that, ‘China has a 50 to 100 year view on management of a company, whereas we run our companies on a quarterly basis???’ Not good!!! (sic)”

 

The US Securities and Exchange Commission (SEC) said it is prioritising Trump’s proposal, marking a potential shift in American corporate reporting practices, news agency Reuters reported.     

 

 

How the current system works

 

Currently, the SEC requires publicly traded companies to file financial results every 90 days. This quarterly system was introduced in 1970, moving away from the semiannual model.

 

If adopted, Trump’s proposal would align US companies with reporting practices in the United Kingdom and the European Union (EU), where semiannual reports are standard.   

(Photo: AI generated image/Google Gemini)

 

Business leaders back the move

 

Some on Wall Street support the idea. Nasdaq CEO Adena Friedman said in a LinkedIn post that giving companies the option to report less frequently would reduce “friction, burden and costs” for listed firms.

 

Treasury Secretary Scott Bessent also endorsed Trump’s plan, telling CNBC that semiannual reporting could help cut expenses for companies while keeping markets competitive with Europe.

 

“President Trump realises that whether it’s the UK, [or] it is the US, our public markets are atrophying, and this might be one way to bring back and cut costs for public companies without harming investors,” Bessent told CNBC on Tuesday.

 

Trump’s push is similar to a 2018 Wall Street Journal op-ed by JPMorgan CEO Jamie Dimon and Berkshire Hathaway’s Warren Buffett, who argued that quarterly earnings guidance fosters damaging short-termism.

 

Concerns over transparency

 

Investor groups, including the Council of Institutional Investors, warn that less frequent reporting could reduce transparency, slow decision-making, and create opportunities for companies to hide bad news.

 

“Our capital markets are the gold standard in the world for their efficiency and transparency,” said Jill Fisch, a securities law professor at the University of Pennsylvania. “I don’t know that we want to be emulating markets that people view as less attractive.”

 

Some investors also argue that the higher valuation of US equities compared to Europe is partly due to stricter reporting standards.     

 

What might change in practice

 

Experts say even if the SEC adopts Trump’s proposal, many companies may continue reporting quarterly to meet investor expectations, Reuters reported.

 

“Overwhelmingly the practice would stay just as it is,” said University of Chicago law professor M Todd Henderson. “That companies’ behaviours are wildly distorted by short-termism is certainly true in some cases but it’s not a system-wide phenomenon.”

 

Fewer public companies, more scrutiny

 

The debate comes as the number of publicly listed US companies has shrunk from more than 7,000 in 1996 to fewer than 4,000 in 2020, CNBC reported. Rising compliance costs and intense investor scrutiny are among the reasons some firms prefer to stay private.

 

By advocating semiannual reporting, Trump hopes to reverse that trend and ease regulatory pressures, bringing the US closer to practices seen in Europe and Hong Kong.