More than 200,000 comments — the most the SEC has ever received on a proposal — came in overwhelmingly against the change
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The Securities and Exchange Commission received more than 200,000 public comments on its proposal to eliminate mandatory quarterly earnings reporting, the largest comment volume in the agency's history, according to The Wall Street Journal. The comments were overwhelmingly negative.
The agency is still working to post all the submissions to its website. Despite the volume of opposition, the SEC is likely to proceed with the proposal in some form, the outlet reported, citing people familiar with the matter.
At least 20,000 submissions echoed the wording of an anonymous grassroots campaign organized around opposing any move away from quarterly reporting. An additional roughly 40,000 comments included the identical phrasing that the proposal "prevents investors like me from accessing information about companies; lets companies hide behind closed doors; and allows fraud to fester."
Respondents spanned a wide spectrum, from retirement funds and nonprofits to academics and large corporations. Lori Amann, who identified herself as a public-school teacher, drew a parallel to student grade reporting in her comment opposing the proposal. Emily McFadden, co-founder of the childhood-cancer nonprofit Little Warrior Foundation, wrote that a quarterly update had alerted the group that a potential supplier had suffered a loss that could have disrupted an immunotherapy clinical trial it funded. "Without this information, we would have misplaced donations, and wasted time that kids with cancer don't have," McFadden wrote.
Among the few supportive responses were letters from Exxon Mobil and insurance brokerage Gallagher. In its letter, Exxon argued that switching to semiannual reporting "would result in a reduction of material or timely information available to investors because material quarterly information is disclosed independently" — an outcome it said it does not anticipate. Gallagher recommended "triannual" reporting as an alternative.
When SEC Chairman Paul Atkins formally proposed allowing public companies to file earnings reports twice a year rather than four times in May, he framed the change as a way to give companies and investors flexibility to determine the reporting schedule that best suits their needs. The proposal would be optional — companies could still choose to file quarterly. It would replace three quarterly filings and one annual report with a new semiannual form called the 10-S and an annual report.
President Donald Trump has backed the idea, calling on social media for an end to mandatory quarterly reporting. The quarterly reporting requirement has been in place since 1970. During Trump's first term, the SEC studied a similar shift but did not act on it.
The public comment period closes 60 days after the proposal is published in the Federal Register. According to The Journal, the SEC must now work through the submissions, a process that may result in revisions to the proposed rule's language.
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