NYSE chief says fewer earnings reports should not come at cost of transparency
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New York Stock Exchange president Lynn Martin. Photo: Michael Nagle/Bloomberg via Getty Images
New York Stock Exchange president Lynn Martin cautioned on Monday that President Trump's push for fewer corporate earnings reports should not come at the cost of transparency, she told Axios at an event in New York City.
Why it matters: Martin said company releases should not be prescriptive but rather a choice depending on the needs of each firm and its shareholders.
What she's saying: "As long as there's transparency, I think that could be one of the solutions," Martin said. "However, I do think it's multifaceted, and all gets back to the challenge of how do we get more companies public in this market."
- About 10,000 private companies aren't going public, she said, adding "that is really what President Trump and (Securities and Exchange Commission chair Paul Atkins) are getting at."
- "There isn't a silver bullet," she said.
Zoom in: Martin teased out an idea of varying regulatory regimes.
- Perhaps companies that just had their IPOs need different requirements than companies that have been public for 100 years, she said.
- She said she has been speaking with Atkins "since the beginning of the year" about how regulatory measures could be amended to encourage firms to go public without decreasing transparency.
Zoom out: Trump made a similar proposal in 2018. Back then, however, the SEC was unable to cement any shifts before his term ended.
- The CEO of Nasdaq, rival to NYSE, posted last week on LinkedIn supporting Trump's newest proposal after it was announced.
Between the lines: Fewer corporate earnings could encourage more firms to go public sooner because quarterly reports can be costly and stressful.
- Executives who are focused on longer-term planning may be deterred by the idea of four earnings calls every year.
Yes, but: Quarterly disclosures allow regular equal access to financial information for all investors, from institutional firms to retail traders.
- "We want (all shareholders) to succeed, but they need to be equipped to succeed in the public markets, and that's our job to give them the tools," Martin said.
What we're watching: How quickly the SEC pursues this change.
- Atkins said he's prioritizing the administration's request.
The bottom line: "Transparency is the hallmark of what makes our capital markets, the greatest markets in the world, so we don't want to take away from that pure transparency around how the business is operating," Martin said.
