An article in Bloomberg last month discusses the potential repercussions of changing the corporate earnings reporting requirement from four times a year to two (as contemplated in one of President Trump’s August tweets).

Although supporters of the president’s idea say moving to a biannual reporting requirement would free up U.S. CEOs to focus more on the big picture and give flexibility to small companies, critics say such a switch, “might reduce transparency for the investing public.” The article cites research by the CFA Institute of the U.K. showing that switching to biannual reporting “failed to eliminate short-term thinking,” and that most companies continue to report quarterly even when they’re not required to.

The article quotes Liz Young, senior investment strategist at BNY Mellon Investment Management: “An efficient market trades on fundamentals, and if we have less fundamental data, that would be tricky.” Senior lecturer at MIT Sloan School of Management said moving to 6-month reporting could “make it more tempting to trade on inside information because there would be such a long time between legitimate disclosures.”

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