SEC draws 200,000+ comments opposing its plan to make quarterly earnings reports optional for public companies
SEC draws 200,000+ comments opposing its plan to make quarterly earnings reports optional for public companies.
The Securities and Exchange Commission asked the public to weigh in on its decision to make quarterly reports optional—and boy did they get it.
More than 200,000 comments were submitted to the regulatory agency during the review period. The vast majority of those opposed the policy, saying it would offer investors less information on which to make decisions, which could be financially harmful.
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Despite the clear feedback, however, the SEC is expected to move forward with the proposal, though The Wall Street Journal says the final language could be altered.
While not all of the comments appear to have been posted on the SEC website, more than 169,000 have been.
"Quarterly reporting of publicly traded company financial and regulatory conditions is a lynch pin of the United States public markets and is necessary to ensure transparency for the investing community," reads one comment . "Without these quarterly disclosures the investing public will lack the timely insights upon which we depend to make informed investment decisions. It will make investors captive to the whims of corporate executives and boards who tend to be self-serving stakeholders. This will dramatically increase uncertainty and risk thereby increasing market volatility. This will place tens of millions of investors funds and retirements at greater risk which will increase instability in our civic culture and the need for greater government social support networks."
Another echoes those comments, reading "Quarterly earnings reports holds companies more accountable and we consistently need that mitigate the risk of dramatic changes in the markets. There's enough risk in the markets. We don't need anymore."
The comments came from a wide variety of sources, ranging from members of the general public to academics and nonprofits and retirement funds to corporations, such as Exxon Mobil.
"We do not believe a move to semiannual reporting would result in a reduction of material or timely information available to investors because material quarterly information is disclosed independently," Exxon wrote.
An anonymous grass roots campaign encouraged people to post a pre-written statement pushing for quarterly reports. The Journal says at least 20,000 people echoed that message.
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Donald Trump raised the idea of doing away with quarterly reports during his first term, but never followed-up on it. The idea resurfaced last September when the Long-Term Stock Exchange, an SEC-registered national securities exchange founded by entrepreneur Eric Ries, resurfaced the idea. Trump quickly voiced his support and the proposal gained momentum.
Proponents say it would make reporting less onerous for public companies and note that public companies in Europe have not been required to report quarterly earnings since 2013, while the U.K. did away with the requirement nearly 10 years ago.
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