U.S. President Donald Trump on Friday said meetings with corporate executives prompted him to ask the U.S. Securities and Exchange Commission (SEC) to study letting public companies file financial reports every six months instead of every quarter.
While Trump nominated SEC Chairman Jay Clayton as the agency's head, as well as two of its three commissioners (one additional Trump nominee is pending before the U.S. Senate), he does not oversee its work.
"That would allow greater flexibility & save money", Trump said in a tweet.
The SEC enjoys some level of distance from the White House because it's an independent agency.
"I asked [the leaders] what it is that would make business (jobs) even better in the U.S.", Trump tweeted.
The President has highlighted a key consideration for American companies and, importantly, American investors and their families - encouraging long-term investment in our country.
Half-yearly reporting would mark a huge change in US disclosure requirements and put it in line with European Union and United Kingdom rules.
Last fall it laid out a blueprint for changes to capital market rules in a U.S. Treasury report, but did not advocate scrapping quarterly reporting. "So we're looking at that very, very seriously", Trump said as he was boarding Marine One on the White House lawn Friday morning.
It "also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term", Musk said.
Still, Van Sinderen cautions, six months can be a long time for smaller companies - particularly those shouldering hard challenges - and can lead to other issues should those two reports differ drastically.
It would be a "major move to provide less information" at a time when investors' access to information has "already been dramatically reduced", Bove said. "[This is especially true] for companies in the consumer space - a lot can happen in six months". Japan, though, moved in the opposite direction, gradually forcing companies to shift from semi-annual to quarterly reporting during the 2000s.
Scrapping the quarterly requirement "is a solution in search of a problem", said Charles Elson, a professor and director of the University of Delaware's Weinberg Center for Corporate Governance.
In a joint letter published in The Wall Street Journal in June, JPMorgan CEO Jamie Dimon and the Berkshire Hathaway boss Warren Buffett argued against the practice of quarterly financial forecasting, saying it led to "short-termism" within companies.
He said when companies report only twice a year, the reaction in markets to their results is typically more volatile than the reaction to quarterly results.
In theory, this information helps investors make informed decisions about the future success of a company.