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Trump calls for the end of quarterly earnings. The SEC is looking into it

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  Published in Business and Finance on Tuesday, September 16th 2025 at 8:47 GMT by Seeking Alpha
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Trump Urges End to Quarterly Earnings Reports; SEC Eyeing the Proposal

In a surprising political statement that has sparked a flurry of commentary across the financial press, former President Donald J. Trump has called for the elimination of mandatory quarterly earnings reports for publicly‑listed companies. The proposal, outlined in a brief op‑ed style post on his personal website, was met with an immediate flurry of reaction from investors, regulators, and market‑watchers alike. The U.S. Securities and Exchange Commission (SEC) has acknowledged the comment and said it will review the idea, but has clarified that no action will be taken until further information is gathered.

1. Trump’s Argument

Trump argues that quarterly earnings “create a distorted view of a company’s long‑term health,” and that the pressure to meet short‑term targets can lead to managerial decisions that harm long‑term value. He cites the “earnings‑shock” that can cause volatile market swings, claiming that “the focus on quarterly numbers distracts investors from the fundamentals of a company.” The former president further suggests that the current system encourages companies to “engage in earnings management” and “over‑emphasize short‑term performance.” He states that he would “push for a re‑focus on the annual cycle” so that shareholders can more clearly see how a firm performs over a year’s time.

2. Reactions from Market Commentators

Financial media outlets immediately took up the story. Bloomberg called the call “an odd twist in the long‑standing debate over earnings disclosure.” CNBC reported that “the proposal would likely have a ripple effect on investor sentiment,” while Wall Street Journal expressed concern that “a shift away from quarterly reporting could reduce transparency and increase information asymmetry.” Several analysts have also weighed in, pointing out that a sudden change would be logistically difficult. “The SEC’s current mandate is heavily embedded in the reporting infrastructure of the U.S. markets,” one commentator wrote. “A switch would involve coordination across multiple stakeholders, from auditors to data vendors.”

3. SEC’s Response

In a statement on the SEC’s website, the agency acknowledged that it is “watching the conversation around quarterly earnings and will consider the broader implications for market integrity and investor protection.” The SEC reaffirmed its duty to ensure “accurate and timely information for all investors,” noting that any potential change would have to balance the benefits of transparency against the costs of a regulatory shift. The agency has not indicated any immediate plans to modify the reporting regime but will conduct a “comprehensive review” that includes stakeholder feedback.

4. The “Quarterly Earnings” Context

Quarterly earnings reports have been a staple of U.S. corporate disclosure since the 1980s, designed to keep investors informed of a company’s financial health on a near‑real‑time basis. They provide a benchmark for performance, help investors compare firms, and are a key driver of stock price movements. The current system is enforced by Rule 13E‑3 of the Securities Exchange Act, which requires companies to file a Form 10‑Q within 40 days of each quarter’s end.

The question of whether quarterly reporting is necessary has been debated for decades. Advocates for reducing or eliminating the requirement point to the “earnings‑management” practices that companies may employ to meet short‑term expectations, arguing that these practices can undermine long‑term investment. Critics counter that quarterly reporting fosters market efficiency by providing continuous information, which helps mitigate risks of overvaluation or surprise negative news.

5. Potential Impact on Investors

If the SEC were to adopt Trump’s recommendation, the ramifications for both institutional and retail investors could be significant. On one hand, investors might benefit from a “cleaner, long‑term view” of a company’s performance and potentially avoid the “earnings‑shock” volatility that can lead to large price swings. On the other hand, the lack of frequent disclosures could create windows of uncertainty during which investors must rely on less frequent, annual data. Some risk‑averse investors might view the move as a step back in terms of transparency and market oversight.

6. A Call for Balanced Regulation

The debate over quarterly earnings underscores the broader theme of how best to regulate markets in a way that protects investors without stifling corporate innovation. A “middle‑ground” solution could involve a hybrid reporting system, with a reduced frequency of “full” earnings releases supplemented by “interim” updates that are less prescriptive. Such a compromise could address the concerns about earnings management while still offering investors the transparency they need.

Bottom Line

Donald Trump’s suggestion to scrap quarterly earnings reports has rekindled a longstanding discussion about how best to balance investor transparency with corporate flexibility. While the SEC is taking a cautious approach, the conversation is likely to persist as market participants weigh the benefits and risks of a possible shift in the reporting paradigm. Whether or not any regulatory change comes to fruition, the discussion highlights the evolving nature of financial disclosure standards and their impact on the U.S. capital markets.