Regulators can conduct studies of their own volition, or will do so at the request of Congress, the president, or the public.
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.
In a tweet early Friday, Trump said that after speaking with "some of the world's top business leaders", he's asked the U.S. Securities and Exchange Commission to determine whether shifting to a six-month reporting regimen would make more sense. That would allow greater flexibility & save money.
"I'd like to see twice, but we're going to see", Trump later told reporters when asked about his tweet.More news: Who is Omarosa? And why is she causing such a stir?
The agency could make such a change without US Congress passing legislation but that doesn't mean it will, said David Martin, an attorney who previously ran the agency unit that oversees corporate filings. Using Bloomberg data that looks at 10-day volatility in single stocks since 2010, price swings during the four reporting periods are roughly 10 per cent higher than in the rest of the year.
The SEC has been reluctant to make changes in quarterly reporting, which has always been a cornerstone of United States capital markets.
One criticism is that if companies are striving to report profit gains every quarter, they are more likely to buy back shares and cut costs than invest in their businesses. "In the end, all companies have to balance short-term and long-term performance".More news: Arsenal players must pass ball to Mesut Özil more, says Unai Emery
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. "It's a lot of work to report every three months", said Charles M. Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware. "Earnings manipulation can take place whether quarterly or every six months". That was the argument made by Jamie Dimon, the chief executive of JPMorgan Chase, and investor Warren E. Buffett in a widely shared op-ed published by the Wall Street Journal in June.
However, they said, their view on the harm caused by corporate "short-termism" shouldn't be interpreted as opposition to quarterly and annual reporting.
On the other hand, a study by experts at Duke University's Fuqua School of Business and City University of London, England, found that frequent financial reporting in itself creates short-sightedness that pushes companies to stress immediate results at the expense of longer-term investments.
Half-yearly reporting would mark a huge change in US disclosure requirements and put them in line with European Union and United Kingdom rules.More news: Napoli to land Arsenal's David Ospina ahead of Besiktas