Paul Atkins, chairman of the Securities and Exchange Commission, said his agency would propose changes to the rules following a call to switch President Donald Trump’s quarterly earnings report to a six-month schedule.
“We welcomed that post by the president and told him about it,” Atkins told CNBC’s “Scoobox” on Friday. “In principle, I think it’s a good way to propose to suggest what our rules are changing now, and then we’ll take that into consideration and then move on.”
Atkins said if the rules change is approved, it will be up to the company to decide whether to switch to six months or stay quarterly.
“For shareholders and public companies, the market can determine what the right cadence is,” he said.
Current regulations require public companies to report revenue quarterly, but are voluntary to provide forecasts. Earlier this week, Trump advocated switching to a six-month schedule, saying “it’s to save money and allow managers to focus on running businesses properly.” The rules could be changed by a majority vote in the SEC, where Republicans currently have a 3-1 vote majority and have a one open seat.
The issue is heavily debated as it is argued by infrequently reported opponents who argue that the lack of transparency is a disadvantage to investors, particularly retail investors who do not have sufficient resources as Wall Street institutions. Supporters say the six-month reporting schedule will free up businesses and focus their businesses in the long term.
Atkins noted that foreign private publishers have already complied with the six-month report. Earlier this year, Norwegian Sovereign Wealth Fund proposed a switch to semi-annual reporting, inferring that extending time frames would allow companies to focus on the long term. The long-term securities trading platform also supports infrequent reporting.
“You must now realize that six-month reports are not strangers to our markets, foreign private publishers are doing that now,” Atkins said. “In the past few years there has been a lot of debate about how this quarterly report highlights the types of short-term thinking.”
