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Trump’s Proposal to Reduce Reporting Frequency
President Donald Trump has suggested that U.S. companies shift from quarterly to semiannual earnings reports, arguing that the change would allow CEOs to focus on long-term strategies rather than short-term financial metrics. In a Truth Social post, Trump emphasized that current quarterly reporting encourages a narrow focus, potentially stifling sustainable growth.

Treasury Secretary Scott Bessent described the proposal as a potential win for investors and businesses. Speaking in London, he noted that the move could reduce compliance costs for firms while maintaining transparency, helping companies allocate more resources toward growth initiatives.

Reducing Costs and Encouraging Public Listings
The U.S. has seen a sharp decline in publicly listed companies, dropping from over 7,000 in 1996 to fewer than 4,000 by 2020. Many executives cite frequent reporting requirements and heightened regulatory scrutiny as reasons to remain private. Bessent suggested that semiannual reporting could partially reverse this trend by making the U.S. a more appealing destination for companies considering public offerings.

He added that other major markets, including the U.K. and European Union, allow semiannual reporting, with the option for quarterly updates. Some foreign companies already listed in the U.S. under the foreign private issuer framework, such as Spotify and Arm, follow similar practices.

Balancing Investor Protections
Despite the potential benefits, some investor groups remain cautious. The Council of Institutional Investors (CII), which represents pension funds and other large investors, has highlighted that quarterly reports provide regular financial transparency and help protect shareholder interests. Reducing reporting frequency may challenge this safeguard, though many foreign-listed companies voluntarily report quarterly to maintain investor confidence.

Legal experts also suggest that while the shift may not be revolutionary, it could influence decisions for companies considering U.S. listings. Mike Bienenfeld, an SEC compliance lawyer, noted that lower compliance costs could be an added incentive for European firms seeking access to American capital markets.

Global Context and Strategic Implications
Trump has framed the proposal in a global context, contrasting U.S. corporate management with China’s longer-term approach. While some Chinese companies report quarterly, many Hong Kong-listed firms report semiannually. Aligning U.S. practices with international norms could help attract more global businesses, particularly from Europe, where semiannual reporting is common.

Bessent also emphasized the broader implications for market competitiveness, stating that the move could enhance the U.S. as a hub for foreign investment without compromising investor protections.

Looking Ahead
While the proposal remains in the discussion phase, analysts believe it could gradually reshape corporate reporting culture in the U.S., promoting long-term planning and reducing administrative burdens. The potential boost in foreign listings and increased capital inflows could be a welcome development for U.S. markets, reinforcing their position as a global investment destination.

Overall, the shift reflects a growing debate over the balance between transparency, investor protection, and operational flexibility in a rapidly evolving financial landscape.