Imagine a world where businesses are freed from the shackles of excessive reporting, allowing them to focus on innovation and growth. But here's the catch: the current system might be stifling their potential. Mark T. Uyeda, Commissioner of the U.S. Securities and Exchange Commission (SEC), recently addressed the 2025 Institute for Corporate Counsel, shedding light on this very issue. His remarks, which reflect his personal views and not necessarily those of the SEC, highlight the need to reevaluate public-company reporting requirements.
Uyeda began by acknowledging the importance of law, business, and politics in fostering strong capital markets. However, he emphasized that the SEC's focus should be on encouraging more companies to go public and stay public by reducing the burdens associated with being a public company. And this is where it gets interesting: he proposed reconsidering periodic reporting requirements, specifically the frequency of Form 10-Q filings.
A controversial idea, perhaps, but one that has been gaining traction. President Donald J. Trump, in a 2025 Truth Social post, suggested allowing public companies to report semiannually instead of quarterly, arguing that it would save money and enable managers to focus on running their businesses effectively. Uyeda echoed this sentiment, pointing out that other major capital markets have already shifted their reporting periods to minimize burdens and promote long-term thinking.
The current quarterly reporting system, Uyeda argued, may not be optimal for all companies. Here's the part most people miss: the diversity of business models means that a one-size-fits-all approach to reporting can be inefficient and costly. For instance, companies with multi-year development cycles might find quarterly financial information less relevant than updates on development milestones. Moreover, the preparation of Form 10-Qs is time-consuming and expensive, with potential personal civil and criminal liability under the Sarbanes-Oxley Act.
Uyeda also questioned the marginal informational value of Form 10-Qs, given that important information is often disseminated instantly through other channels. He cited examples from the UK and the European Union, where shifts away from quarterly reporting did not negatively impact corporate investment or investor protection. But here's the real question: should the SEC be open to change, or is maintaining the status quo the best approach?
In addition to reporting requirements, Uyeda addressed the need for transparency in the SEC's rulebook. He criticized the secrecy surrounding certain regulatory analyses, such as those related to shareholder proposals under Rule 14a-8, and advocated for clear and openly stated rules. A bold stance, but one that could lead to a more accountable and understandable regulatory framework.
Finally, Uyeda tackled the issue of unaccountable and concentrated proxy voting power. He emphasized the importance of ensuring that market participants comply with reporting requirements when acting in a coordinated manner, particularly through proxy voting advisory businesses (PVABs). A thought-provoking point: should funds and asset managers be considered a group under the Securities Exchange Act if they engage in 'robo-voting' based on PVAB recommendations?
In conclusion, Uyeda's remarks challenge us to rethink the current public-company reporting landscape. Are we ready to embrace change and foster a more efficient, transparent, and accountable system? The discussion is far from over, and your thoughts could shape the future of corporate governance. What do you think? Is it time to reevaluate reporting requirements, or should we stick to what we know?
