Potential Benefits for Companies and Investors
U.S. Treasury Secretary Scott Bessent said Trump’s proposal could save companies money without harming investors’ interests. He also noted that changing the reporting schedule could make the United States a more attractive market for foreign firms considering anIPO.
Global Context
Trump pointed out that many countries, including the UK and EU nations, already use semiannual financial reporting, while allowing companies to issue quarterly reports if they choose. He also referenced China, noting that Chinese companies often plan for growth over decades, whereas American firms focus on quarterly results.
Impact on the U.S. Stock Market
The number of publicly listed companies in the U.S. has declined from over 7,000 in 1996 to fewer than 4,000 in 2020. Experts say that moving away from mandatory quarterly reporting could lower barriers for companies hesitant to go public due to costs and regulatory burdens.
Mike Bienenfeld, a lawyer at Linklaters specializing in SEC compliance, stated that while the change might not be revolutionary, it would certainly be an important consideration for firms weighing a U.S. stock market debut.
Cautions from Critics
Not everyone supports abandoning quarterly reporting. Critics argue that regular updates increase transparency and help protect investors’ interests. While semiannual reports could ease corporate management, they might reduce the immediate visibility into a company’s financial health.
Trump’s proposal has sparked debate over balancing long-term strategic planning with the need for ongoing financial oversight. Semiannual reporting could influence company strategies, investor decisions, and the attractiveness of the U.S. market for foreign firms.
