SEC Fulfills Trump Request, Seeks Comment on Quarterly Reporting

(Bloomberg) -- The Securities and Exchange Commission is starting a review of how often U.S. public companies report financial results, heeding President Donald Trump’s call for the agency to consider letting businesses open their books less frequently.

The SEC’s move to seek public comment on the quarterly reporting process, announced in a statement Tuesday, further heats up a long simmering debate over corporate disclosures. Trump said in an August tweet that moving to semi-annual reports would save companies money and increase flexibility.

Commissioners voted to pose more than three dozen questions about the current process, which some groups have said fuels a misguided obsession with short-term benchmarks.

The SEC said it wants information on how it can “reduce administrative and other burdens on reporting companies associated with quarterly reporting while maintaining or enhancing appropriate investor protection.”

Commissioners asked for opinions on the scope and timing of quarterly reports and how it can reduce unnecessary duplication in disclosures. They also requested feedback on whether the agency should allow flexibility for how often companies report and how corporate decision-making is affected by the current requirements.

In announcing the move, SEC Chairman Jay Clayton said there was debate about the effects of requiring quarterly reporting. In October, Clayton said that while he was pleased Trump had raised the issue, he didn’t expect that “quarterly reporting is going to change for our top names anytime soon.”

While outgoing Democratic SEC Commissioner Kara Stein voted to seek public comment on the questions, she also expressed doubt over whether any changes were needed.

“I have not had one investor come into me in five and a half years and say they wanted less disclosure or that they in particular thought we should be changing our quarterly reporting,” Stein said in an interview.

To contact the reporter on this story: Ben Bain in Washington at bbain2@bloomberg.net

To contact the editors responsible for this story: Jesse Westbrook at jwestbrook1@bloomberg.net, Gregory Mott

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