Canceling mandatory quarterly earnings disclosure for U.S. stocks? Trump may really succeed

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The Trump administration is once again pushing for a major reform that could reshape information disclosure rules in the U.S. capital markets, and this time, the chances of success are much higher than in his first term.

According to a Monday article by Jiemian, on the 16th, Trump proposed a new idea: instead of requiring companies to release financial reports quarterly, change it to every six months. In a Truth Social post, Trump indicated that this idea would require approval from the U.S. Securities and Exchange Commission (SEC) and would save money, allowing management to focus on running the company properly.

An SEC spokesperson said on Monday night that the agency is prioritizing the proposal. Although investor groups may continue to voice opposition, some analysts predict that by 2027, the SEC may shift toward a European-style semiannual reporting system. They also point out that many large companies may still choose to maintain the current quarterly reporting pace.

This proposal is not new. During Trump's first term, then SEC Chairman Jay Clayton solicited public comment on a similar call, but the initiative was ultimately shelved due to a crowded agenda and the impact of the COVID-19 pandemic. Now, the environment is completely different.

"New SEC" Under White House Leadership

The core reason this reform is moving forward is that the White House is exerting more direct influence over the agendas of independent agencies like the SEC. According to Washington insiders and analysts, the current SEC Chairman, Paul Atkins, is a Republican who believes in free markets and has long criticized cumbersome corporate regulation; he is working closely with the White House.

Differing from convention, the current White House has reviewed the SEC's regulatory agenda and has already directed policy direction on major issues such as cryptocurrency policy and SEC staffing cuts. The broad agenda the SEC released this month includes a project planned for next April aimed at "streamlining corporate disclosures," creating a potential path for starting the public consultation process.

James Angel, a financial regulation expert at Georgetown University's McDonough School of Business, pointed out:

"The Trump 2.0 administration is very different from 1.0. The 2.0 version is bolder than 1.0, so we may actually see action."

He mentioned the SEC's earlier friendly stance towards the cryptocurrency industry and believes that "the opportunity is much greater this time." In addition, analysts believe that Paul Atkins faces a friendlier Congress and a court system inclined toward conservatives, and he has more time to complete the typically long rulemaking process.

Business Community Support and Investor Divisions

For a long time, large business groups including the U.S. Chamber of Commerce and the Business Roundtable have been pushing to streamline corporate reporting rules. Bill Hulse, Senior Vice President of the U.S. Chamber of Commerce, said in a statement:

"Modernizing disclosure helps reduce costly and burdensome compliance requirements, while allowing investors to more easily focus on key information."

However, views among investors are divided. An anonymous executive of a Washington industry organization said that the White House’s strong interest in SEC activities increased the likelihood of the rule becoming reality, but also pointed out that some investors may oppose the change.

Andrew Horowitz, an investment advisor in Fort Lauderdale, Florida, warned:

"The idea of getting investors to focus on long-term rather than three-month data sounds good. However, this may cause greater volatility during earnings season, as the coverage period of potential results will be longer."

The Council of Institutional Investors—an influential group representing employee benefit funds and retirement savers—said its position has not changed since 2019, when it opposed the potential change on the grounds that quarterly disclosures are a “necessary guide” for investment decisions.

Will the "European Model" Become a Reality?

Despite resistance, analysts believe the outlook for reform is becoming clearer. Brian Gardner, Stifel’s chief Washington policy strategist, predicted in a report on Tuesday that the SEC could issue a regulatory proposal as early as this year.

Analysts forecast that the U.S. market may eventually shift to mandatory semiannual reports under the "European model," but the new rules may not completely eliminate quarterly reporting. Many large corporations, considering investor relations and market expectations, are highly likely to voluntarily continue releasing quarterly results.

It is worth noting that some investors who advocate for greater long-term sustainability action from corporations have expressed cautious support for the idea. White House spokesperson Taylor Rogers said in a statement that the administration is working with other government departments to achieve "America's great long-term revival."

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