The SEC proposal to allow companies to report financial results semiannually rather than quarterly received more public comments than any other issue in its history. When we launched our "Save the 10-Q" campaign in June, we encouraged Fools to make their voices heard by submitting comments to the SEC. And wow… did Fools deliver.
Ohio State Professor Tzachi Zach, who built a remarkable AI-powered tracker of every letter filed on the proposal, identified thousands of letters traceable to The Motley Fool community, representing roughly 13% of all individual letters filed during our campaign window.
With the comment window closed and the final rule still pending, the analysis coming in paints a mixed picture. A KPMG survey found that 39% of companies plan to make no changes, continuing to file 10-Qs and publish quarterly releases -- which is at least some evidence that investor expectations carry real weight. But another 39% said they'd keep the press releases and ditch the regulatory filings, which we view as a bad outcome.
A 10-Q is vetted, certified, legally accountable, and standard across public companies and reporting periods. A press release is essentially a marketing document. Meanwhile, a Bloomberg analysis of S&P 1500 companies found that semiannual reporting would have obscured bad quarters at more than twice the rate of good ones.
Although opposition to the proposal ran at 99.5%, it's still widely expected to pass. We'll closely monitor the final rule, as well as any potential legal challenges. Whatever the outcome, we're proud of the Foolish community for ensuring that the voice of the individual investor was heard -- respectfully, clearly, and Foolishly.
