Trump asks SEC to consider switch to half-year corporate filings

NEW YORK/WASHINGTON (Reuters) - U.S. President Donald Trump on Friday said meetings with corporate executives had 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.

Half-yearly reporting would mark a huge change in U.S. disclosure requirements and put it in line with European Union and United Kingdom rules. By tweeting that the switch would give companies more flexibility and reduce costs, Trump waded into a long-running debate on how often public companies should report.

Investors have mostly argued for more transparency, while some executives say too-frequent reporting creates an unhealthy focus on short-term targets. The SEC is an independent commission-led agency, and the president cannot force it to implement rule changes.

On Twitter, Trump said that one executive had suggested the change as a way to boost business, but did not name the individual or the company.

“I’d like to see twice, but we’re going to see,” Trump later said to reporters outside the White House, when asked about his tweet about changing SEC reporting requirements. He said outgoing PepsiCo Inc (PEP.O) CEO Indra Nooyi had brought it up to him. PepsiCo was not immediately available to comment.

Trump recently hosted a number of company leaders while on vacation at his private golf club in Bedminster, New Jersey, including the heads of Apple Inc (AAPL.O), Fiat Chrysler Automobiles NV (FCHA.MI), Boeing Co (BA.N), FedEx Corp (FDX.N), and Honeywell International Inc (HON.N).

Any move to scrap quarterly filings would have to be voted on by the SEC’s sitting commissioners, who are political appointees.

While capital market rules are not traditionally a partisan issue, such a major rule change would likely meet opposition from the agency’s two Democratic-leaning commissioners, Robert Jackson and Kara Stein who have generally advocated for strong corporate governance.

The SEC declined to comment. The Commissioners’ offices did not immediately respond to a request for comment.

Under Trump appointee chairman Jay Clayton, the SEC has taken steps to relax rules for issuers, including allowing firms going public to file information confidentially, and is currently discussing relaxing some other compliance rules.

But scrapping quarterly reporting is not currently on the SEC’s near-term agenda, according to public records.

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

But executives and other investors said Trump’s argument made sense because it would cut costs of compiling and filing results and remove short-term distractions for those running companies.

Tesla Inc (TSLA.O) Chief Executive Elon Musk stunned investors last week by announcing a plan to take the electric carmaker private, a move he says would benefit shareholders by removing short-term pressures associated with being a public company.

“I do believe it will help upper management ... We start preparing three weeks in advance every quarter, essentially taking almost a third of executives’ time each quarter,” said Bryan Sheffield, chief executive of shale oil producer Parsley Energy Inc (PE.N).