Trump Begins De-Regulation At Exactly the Wrong Spot
President Donald Trump suggested Monday on Truth Social that companies should stop filing quarterly earnings reports and instead move to a semiannual schedule. Trump’s call to replace quarterly earnings reports with semiannual filings revives a debate that also surfaced during his first term.
I presume Trump wants to be a deregulator and free marketeer here, but he is going at it exactly wrong. The best free market approach to capital markets is to make sure investors have information to make quality decisions about their investments. Then, you can clear out all of the other underbrush of regulation and quasi-parental oversight of markets and leave decisions to individual responsibility. The first, lightest touch regulation is for corporate financial transparency. Its not the first regulation you would eliminate, its the last one you hang on to.
In addition, six month waits for corporate numbers is way too long. It can take as much as 60 days after the reporting period is over for results to be released, so that problems that start occurring in January would not come out of the closet until August or even September. Enron finally blew up when the chickens finally came home to roost in its third quarter 10-Q. Were they allowed to put this off for 3 more months the damage could only have been worse.
Of course, if the government changes this rule it does not mean that exchanges such as the NYSE and NASDAQ will change their rule to match. It is still very possible that absent a federal 10-Q requirement the exchanges would still require such reporting.