End quarterly reports from public companies? The Trump administration wants it to happen, but lawmakers are all over the map.
President Donald Trump declared on social media last week it was time to kibosh quarterly reporting requirements, a view he’s espoused in the past. Securities and Exchange Commission Chair Paul Atkins has already said the agency will propose a rulemaking along these lines.
This is one of those ideas that’s been out there for a while. Now that it’s on the verge of reality, we surveyed some members of the House Financial Services Committee.
The reaction was mixed – not strictly surprising, given where the business community is on the issue.
The good: Most Republicans appear fine with the shift. Rep. Roger Williams (R-Texas), who also heads the House Committee on Small Business, hailed the potential boost to productivity. Williams also dismissed worries that investors could lose valuable or timely corporate data.
“I think what you do is, you take a lot of productivity away from a lot of companies when they have to meet deadlines,” the Texas Republican said.
Here’s a good place to point out that ending this SEC requirement wouldn’t immediately translate to the end of all quarterly reports. Plenty of companies could continue to publish that data if they wanted.
The meh: Other pro-business lawmakers were more ambivalent. That includes Rep. Ann Wagner (R-Mo.), who chairs the House Financial Services Subcommittee on Capital Markets.
“We’re still taking a look,” Wagner told us last week. “We’re just going to get some input about some of the repercussions and maybe the effects on the market and such.”
Wagner is sympathetic to the red-tape-cutting argument, but she stressed wanting to understand the broader implications.
“Instead of focusing on earnings and their customers and performance, they’re always staring down the neck of another reporting period,” Wagner said. “It’s a good idea. We just have to see what all the knock-on effects would be.”
Likewise, some Democrats are cautiously optimistic.
“If we’re going to dispense of quarterly reporting, we need to ensure there is some measure of transparency that would supplant it that is sufficient to provide our markets with the confidence that they have enjoyed for decades,” Rep. Sam Liccardo (D-Calif.) said.
The ugly: Rep. Jim Himes (D-Conn.), a former investment banker with Goldman Sachs, said the move away from quarterly reporting was “a terrible idea.”
“Less data means more risk. More risk means a risk premium, and that means less valuable assets,” Himes said.
