The bottom line: Most retail investors have never heard of -- let alone thought deeply about -- a SEC proposal that would cut in half how often public companies are required to disclose their finances. And the public comment window for the proposed rule closes on July 6, 2026.
Encouraging public companies to think long-term is the most common argument to support the SEC's proposal -- but the evidence doesn't support it
The most common reason retail investors surveyed by The Motley Fool give for supporting the SEC's semiannual reporting proposal is that it would encourage companies to focus on long-term strategy over short-term results, cited by 57% of respondents who support the rule. A 2017 CFA Institute Research Foundation study, led by Robert Pozen, Suresh Nallareddy, and Shivaram Rajgopal, tested that argument, using a decade of U.K. market data, and found it doesn't hold up.
- The U.K. required quarterly reporting starting in 2007 and dropped the requirement in 2014, and corporate investment behavior didn't change in either direction. Public companies that stopped reporting quarterly did not increase capital expenditures, R&D, or property and equipment spending, and companies that began reporting quarterly didn't invest less.
- Reporting frequency did impact the information retail investors received. Public companies that reported quarterly earnings attracted more analyst coverage and more accurate earnings forecasts, and when they stopped reporting quarterly, analyst coverage declined.
- Changing reporting cadence doesn't affect the root causes of short-term decision-making among public companies. The actual drivers are executive compensation structures and other incentives that encourage companies to focus on long-term performance, neither of which is addressed by reducing the frequency of public companies' financial disclosures.
The SEC's semiannual reporting proposal comes with an objective cost -- less official financial information for retail investors -- in exchange for a benefit that historically has not materialized.
Even supporters of the SEC's semiannual reporting proposal worry it gives institutional traders an edge
Nearly half (47%) of retail investors surveyed by The Motley Fool are concerned that the SEC's semiannual reporting proposal would give institutional investors an advantage over individual investors, who don't have access to the alternative data, analyst networks, and management contacts that institutional investors do.
- 60% of Gen Z investors say institutional investors would benefit from the proposed rule, compared with 34% of baby boomer investors. The 26-point gap between the youngest and oldest generations is the widest generational spread on any question in the survey.
