Published: Sun, August 19, 2018
Markets | By Otis Pena

It will be tough for Trump’s SEC to overhaul reporting rules

It will be tough for Trump’s SEC to overhaul reporting rules

He said outgoing PepsiCo Inc Chief Executive Indra Nooyi had brought it up to him.

Some investors on Friday said quarterly disclosures were essential to making informed investment decisions and supported richer USA valuations, and that shares could become more volatile if companies report only twice yearly.

The SEC consists of five commissioners appointed by the president, although there now are only four in place, three named by Trump. The Commissioners' offices did not immediately respond to a request for comment.

"The president has highlighted a key consideration for American companies and, importantly, American investors and their families - encouraging long-term investment in our country", Clayton said. "[This is especially true] for companies in the consumer space - a lot can happen in six months". "So we're looking at that very, very seriously", Trump said as he was boarding Marine One on the White House lawn Friday morning.

Under Clayton, a Trump appointee, the SEC has taken steps to relax rules for issuers, including allowing firms going public to file information confidentially, and is now discussing easing other compliance rules.

The law that created the SEC requires public reports, but the agency has some leeway to interpret the law in setting regulations.

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Doing away with quarterly reports would help corporations save money.

Public companies must report their sales, profits and the state of the company's balance sheet every quarter. "She said, two times a year reporting, not quarterly".

Business groups including the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association and exchange operator Nasdaq have been lobbying hard over the past year for lawmakers and the SEC to relax listing rules, warning that the decline in listings hurts jobs and pension funds.

Earlier this year, Berkshire Hathaway Inc.'s Warren Buffett and JPMorgan Chase & Co.'s Jamie Dimon urged companies to stop issuing quarterly earnings guidance.

While it's hard to determine what will come of Trump's tweet and charge to the SEC, if such a change were to occur, Wedbush Securities analyst Christopher Svezia said there could be positives for both investors and companies.

The commander in chief's sentiments stirred up an ongoing debate, which has seen leaders of publicly traded firms, on one side, complain of the pressures - stoked by quarterly earnings releases and conferences calls - to meet short-term goals at the expense of long-term stability. Putting together quarterly reports is also a huge cost for public companies, requiring resources to be directed at reporting rather than producing goods and services for the market.

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