Trump backs CEOs, proposes easing corporate reporting rules

FILE PHOTO: The seal of the U.S. Securities and Exchange Commission hangs on the wall at SEC headquarters in Washington, U.S., June 24, 2011. REUTERS/Jonathan Ernst/File Photo

NEW YORK/WASHINGTON (Reuters) – 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.

Half-yearly reporting would mark a huge change in U.S. disclosure requirements and put them 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 companies should report.

“I’d like to see twice, but we’re going to see,” Trump later told reporters when asked about his tweet. He said outgoing PepsiCo Inc ( Chief Executive Indra Nooyi had brought it up to him. “Many market participants, as well as the Business Roundtable which we are a part of, have been discussing how to better orient corporations to have a more long-term view,” Nooyi said in a statement emailed to Reuters. “My comments were made in that broader context, and included a suggestion to explore the harmonization of the European system and the U.S. system of financial reporting. In the end, all companies have to balance short-term and long-term performance.” Some investors on Friday said quarterly disclosures are essential for investment decisions and supported richer U.S. stock valuations, and that shares could become more volatile if companies report 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.The SEC is an independent agency, and the president cannot force it to implement rule changes. Any move to scrap quarterly filings would have to be voted on by the SEC’s sitting commissioners, who are political appointees. “It’s cockamamie idea. For starters, what’s the difference between six and three months? … Either way we’re talking about a very short-term period,” Yardeni added.