Trump drew inspiration from the long-term business philosophy of Chinese companies and urged the SEC to replace quarterly reports with semi-annual reports.

On September 15, U.S. President Trump posted on Truth Social, suggesting that publicly traded companies should not have to submit quarterly reports, but instead switch to semi-annual reports. Subsequently, the U.S. Securities and Exchange Commission (SEC) responded that it has begun evaluating this proposal. Trump believes this can reduce the burden on businesses and help operators focus on long-term development. However, market analysts and some investors are concerned that the transparency of information may decline, which could be detrimental to investment decisions.

Trump cited China's long-term management philosophy and called for the cancellation of quarterly reports in favor of semi-annual reports.

Trump stated that if the SEC approves, companies should no longer be forced to submit "quarterly reports" in the future, but instead switch to "semi-annual reports." He added that this would save costs and allow operators more time to focus on business operations.

Then he referenced Chinese cases, pointing out:

"China has a long-term vision of 50 to 100 years in business operations, while we only look at quarters, which is not good!"

In fact, Trump proposed similar ideas during his first term, but it did not materialize at that time.

The SEC chairman immediately responded, initiating the review process.

The SEC also stated later that day to CNBC that, at the request of President Trump, SEC Chairman Paul Atkins has made the case a priority and will begin to review whether unnecessary regulatory burdens can be reduced.

According to current regulations, publicly traded companies in the United States must disclose financial reports quarterly, but financial forecasts are voluntary. If changed to semi-annual reports, it only requires the majority agreement of the SEC commissioners, without the need for congressional legislation. Sarah Bianchi, a policy analyst at the U.S. investment bank Evercore ISI, pointed out that if the promotion goes smoothly, the entire process could be completed in just 6 to 12 months.

( Note: Financial forecast refers to a company's proactive estimation of its operational or profit performance for a certain period in the future, such as revenue, profit, or gross margin for the next quarter or the entire year, etc. )

Industry leaders call for the cancellation of quarterly financial forecasts and quarterly reports.

In a 2018 editorial in The Wall Street Journal, (Warren Buffett) and JPMorgan (CEO Jamie Dimon called for companies to eliminate quarterly financial forecasts, but not quarterly reports. The two stated:

"In our experience, quarterly financial forecasts often lead companies to become overly focused on short-term profits, sacrificing long-term strategy, growth, and sustainability."

The Norwegian Sovereign Fund and the US exchange LTSE have also proposed to switch to semi-annual reports to help companies focus on long-term goals.

There are still industry insiders who support quarterly reports, which can provide real-time insights into the status of companies.

Art Hogan, Chief Market Strategist at American wealth management firm B. Riley Wealth Management, expressed a different view on this, stating that investors should receive more information, not less, and emphasized that quarterly reports help the market to grasp the company's status in real time.

Hogan further pointed out that there are significant structural differences between the US and European markets, and they cannot be directly compared to the semi-annual reporting system of the UK or the EU.

Comparison of International Systems and Subsequent Observations

According to the current state of international financial reporting standards:

China: Listed companies are required to submit quarterly, semi-annual, and annual financial reports, with regulations stricter than those in the United States.

Hong Kong: Only need a semi-annual report.

UK and EU: Require submission of semi-annual reports, but companies may voluntarily publish financial reports.

As of now, SEC Chairman Atkins has not publicly commented, and the White House has refused to provide further commentary. The outside world continues to pay attention to whether this proposal can move from discussion to actual implementation.

In this article, Trump draws on the long-term management philosophy of Chinese companies, calling on the SEC: to cancel quarterly reports and switch to semi-annual reports. First appeared in Chain News ABMedia.