In comment letters, investors have hammered the agency for the proposal’s lack of sound reasoning or analysis to support the notion that quarterly reporting dissuades companies from going public or encourages short-term thinking, they said. Semiannual reporting would also make markets less transparent, less efficient and less competitive, they say.
“A proposal of this significance requires compelling evidence that quarterly reporting is responsible for the problems the commission seeks to address, and a reasoned explanation for why the benefits of reducing disclosure frequency outweigh the costs,” stated a letter from hedge fund Citadel. “The proposal provides neither.”
A comment from investment management firm Vanguard said the compliance savings from reducing annual reporting are insignificant compared with the millions companies spend to go public. A change would not meaningfully reduce short-term corporate thinking either, the company said.
Source: ‘Poorly Reasoned’?: SEC’s Semiannual Reporting Proposal Hits Wall of Opposition | Law.com