Trump has proposed exempting companies from reporting every quarter. What are the risks and benefits?

US President Donald Trump proposed to exempt public companies from reporting every quarter in favor of publishing data every six months. In his opinion, this would reduce costs and give businesses more freedom. Opinions on Wall Street are divided on this issue, Bloomberg writes: some analysts say that this will increase volatility and risks for investors, while others believe that the measure will be a step towards the "deregulation" promised by Trump.

In a post on Truth Social on Sept. 15, President Donald Trump rekindled a long-running debate over how often public companies should report to investors. He proposed scrapping the current format of publishing results every three months and moving to a semi-annual cycle. Trump said such a move would "save money and allow company executives to focus on effective management."

The U.S. Securities and Exchange Commission told CNBC that it will study the president's initiative. "At President Trump's request, Chairman [Paul] Atkins and the SEC will prioritize consideration of this proposal to eliminate unnecessary regulatory burdens on companies," a commission spokesperson said.

According to TD Cowen analyst Jarett Sayberg, the probability that the SEC will actually start reforming the reporting rules is about 60%. However, on Wall Street there are also more reserved assessments: some analysts doubt the possibility of such changes, while others point to the risks of reduced transparency and increased volatility.

- Jarett Seiberg, managing director at TD Cowen: "This could be an easy opportunity for SEC Chairman Paul Atkins to present the president with a political victory. It also fits in with his deregulatory agenda. Therefore, we believe the likelihood of a switch from quarterly to semi-annual reporting has increased: it is no longer an unlikely but a very real scenario, although not guaranteed. It will take at least half a year to develop the proposal and collect the economic justifications required to pass the forensic examination".

- Irene Tankel, chief U.S. equity strategist at BCA Research: "As a strategist, I get valuable signals from quarterly reports and calls. But today, it has become more of a 'guess the forecast' game than a source of analytical information. With nearly 80% of companies 'outperforming' expectations every quarter, confidence in forecasts is eroding and the desire to meet short-term goals is hindering decision-making. The high cost of reporting also contributes to a decline in the number of companies willing to go public. While I value transparency and data, less frequent reporting may end up being more useful to corporate America."

- Sarah Bianchi, senior managing director at Evercore ISI: "Trump will likely not actively press the SEC in the near term, which will give Atkins room to launch the normal process [of reviewing changes to the filing rules]. <...> Serious scrutiny will begin if, at the end of the [rule review] process, Atkins and other commissioners decide that a different approach is needed."

- Jonathan Golub, chief equity strategist at Seaport Research Partners: "Capital markets and the economy as a whole become more efficient when there is more information and it is available. Wall Street's job is to allocate capital to where it will yield the highest returns, and we are all better able to do that when data is open and regular. The market will reward those who report more frequently and transparently."

- Ed Mills, Washington policy analyst at Raymond James: "Quarterly reporting is unlikely to disappear, after all, it's mandated by the 1934 Exchange Act. I don't see Congress being willing to eliminate this requirement. <...> However, changes are possible in the details of what exactly is disclosed in the quarterly report. The SEC has room to maneuver here: perhaps the requirements will become more flexible for smaller companies."

- Samir Samana, head of global equities and real assets at Wells Fargo Investment Institute: "The less frequently reports are released, the greater the uncertainty, and that has an immediate impact on volatility when the reports do come out. In investing, the more information and the higher the frequency of data updates, the better, and the less and less frequent the worse."

- Kim Forrest, Chief Investment Officer at Bokeh Capital Partners: " For portfolio managers, this is a negative: the two moments a year when companies not only disclose important information but also engage in a dialog with investors are gone. It is during public Q&A that we learn things that cannot be understood from press releases. Without these sessions, it will be much more difficult for investors to assess a company's prospects."

- Michael Kantrowitz, chief investment strategist at Piper Sandler & Co.: "All I can say to that is: Amen! And the Fed, too, should have acted "progressively and proactively" rather than in panic reaction mode - together this could reduce stock market volatility and short-term thinking. This is unlikely to happen, but one can dream. On the other hand, certain categories of investors and traders need volatility".

- Brian Nick, head of portfolio strategy at Newedge Wealth: "The goal is clear - to shift the focus to long-term planning. But the result will be increased market uncertainty and lower company valuations as the frequency of new information becomes less frequent. Stock fluctuations during reporting seasons could become sharper, as "misses" will be larger. The S&P 500 Index may begin to resemble the Russell 2000 in volatility and uncertainty. But that could be good news for active management - portfolio managers will have a better chance to stand out."

- Matt Maley, chief market strategist at Miller Tabak + Co. says: "Less transparency means fewer opportunities for investors. But it also gives companies a break and a chance to focus on strategy. It's a two-way stick. It will increase the value of quality analysis on Wall Street. But for options traders, this reform is a disadvantage: it's in the reporting sessions where they make most of their profits."

- Dan Niles, founder of Niles Investment Management ( via CNBC): "In the technology sector, where things are changing so rapidly, I'm very reluctant to invest in black boxes. A winner yesterday <...> may not be a winner today."

The current format of reporting every quarter was established by the SEC in 1970 as part of a long-term effort to increase transparency among companies after the 1929 stock market crash, Bloomberg writes.

This isn't the first time Trump has spoken out on the issue. Back in 2018, he tweeted that he discussed six-month reporting with "some of the top business leaders in the world" and found it to be more flexible and cost-effective. However, the initiative went nowhere last time.

This article was AI-translated and verified by a human editor