The Securities and Exchange Commission's proposal to allow companies to report financial results semi-annually instead of quarterly has faced significant backlash. The public comment period, which closed on July 6, garnered a surprising volume of responses, with accounting professor Tzachi Zach's tracker showing more than 36,000 comment letters, and at least 97% to 99% of individually classified comments opposing the change. An additional 60,000 form letters also expressed opposition. This widespread resistance comes from across the investment community, including influential groups and individual investors, who argue that less frequent reporting would strip them of timely data needed for sound investment decisions.
Key industry players and financial professionals have voiced concerns about the transparency and investor protection implications of the proposal. The Investment Adviser Association, CFP Board, and the CFA Institute have warned that semi-annual filings would create information gaps and increase costs for advisors and their clients. A survey of 2,500 CFA charterholders indicated that 62% opposed the change, and 70% were against allowing companies to choose their reporting schedule. They highlighted that quarterly reporting provides a reliable baseline of timely, comparable information, and reducing its frequency could disadvantage retail investors, push markets towards less standardized data, and make fraud harder to detect.
Even the "Big Four" accounting firms (Deloitte, PwC, KPMG, and EY) flagged gaps in the SEC's plan, noting a lack of framework for auditors' roles beyond mandatory SEC filings and potential issues with US accounting standards that revolve around quarterly reporting. Daniel Brinks, a forensic accounting partner at StoneTurn and former senior SEC enforcement accountant, stated that the one-sidedness of the comment file increases the likelihood of a legal challenge if the commission finalizes the rule as written. He also noted that while volume gets the SEC's attention, the legal requirement is to address the substance of comments, suggesting revisions are likely as the proposal faces an "enormous administrative record." The SEC has declined to comment on its timeline, currently leaving the proposal in a "wait-and-see" position.
