SEC proposal to weaken quarterly reporting faces investor opposition

Investors are expressing strong opposition to a proposal by the Securities and Exchange Commission (SEC) that would allow publicly traded companies to reduce the frequency of their financial reporting. The proposal, supported by President Donald Trump and SEC Chairman Paul Atkins, suggests that companies could opt to stop filing mandatory quarterly Form 10-Q reports, instead providing comprehensive financial disclosures only twice a year.

Proponents argue that moving to semiannual reporting would reduce regulatory costs and allow corporate executives to focus on long-term management rather than short-term quarterly results. However, critics and major Wall Street firms warn that the change could create an information gap, leaving ordinary shareholders with less transparency regarding the companies they own.

The nonprofit financial reform organization Better Markets reported that more than 225,000 public comments were submitted regarding the rule, marking the largest response for a rulemaking proceeding in the SEC’s 92-year history. According to the group, approximately 99% of those comments opposed the plan to allow companies to report financial results only twice a year.