Tell the SEC: Individual Investors Deserve More Information, Not Less

At the start of the century, The Motley Fool community helped change federal securities law.

When the SEC proposed Regulation Fair Disclosure (Reg FD) – requiring companies to stop feeding material information to Wall Street analysts before sharing it with the general public, including everyday investors like us Fools – institutional money fought back hard. The big firms liked the arrangement just fine. Individual investors needed a champion.

The Motley Fool mobilized its community. The SEC received the largest volume of public comment letters it had seen to that point. Sixty-five percent of those letters came from Fools. SEC Chairman Arthur Levitt personally visited Fool HQ afterward. Reg FD passed. Chairman Levitt later said, "Two-thirds of our letters came from Fools. Without them, Reg FD would not have happened."

We have the opportunity to do it again.

What the SEC Is Proposing Today – and Why It's the Wrong Answer

The SEC has proposed allowing public companies to abandon quarterly reporting in favor of semiannual disclosures. You can read the agency's press release here. And while the SEC presents this as an optional, flexible change – companies can still choose to report quarterly if they wish – that flexibility comes at a real cost to individual investors.

When you own a stock, you are a legitimate part-owner of that business. Quarterly reports are how your company shares the full picture with you: where the money is coming from and where it's going; what's working and what's not. You get the financial statements, the management discussion of what happened and why, the trends in revenue and earnings, Q&A with analysts – four times a year. That cadence is more than bureaucratic box-checking, we believe. It's the mechanism by which ordinary investors stay informed about the businesses they own.

Cut that to twice a year and you've doubled the information gap between insiders and everyone else, which almost certainly would lead to more volatility when results finally do arrive (the market will have spent six months guessing instead of three).

Put plainly: This is the opposite direction from Reg FD. Where Reg FD said more information, more fairly shared, this proposal says less information, less often. That feels like a step backward for the individual investor.

Some quarterly reporting critics argue that more frequent reports don't necessarily mean more useful information. That may be true of raw data dumps. But quarterly filings are standardized, certified, and directly comparable across companies and time periods in ways that episodic disclosures simply aren't. There's a meaningful difference between a company voluntarily flagging something in an 8-K and a company being required to show you the full financial picture on a regular schedule. In fact, companies are directly required to report material trends in the "Management's Discussion and Analysis" section of each quarterly filing through Regulation SK, Item 303. This has benefited shareholders immensely in understanding positive and negative trends in the businesses they own, but it's the frequent, quarterly cadence that both illuminates the trends and gives the regulation its teeth.

While much of the public discussion will likely center on the frequency of insight into companies' operations, quarterly reporting also opens an invaluable window into their fiscal health. The quarterly balance sheet snapshot displays the resources of healthy businesses, and it provides a critically important view of those in distress. With fewer checks on the solvency and liquidity of struggling organizations, shareholders in many cases will almost certainly be left holding the bag.

What the Research Actually Shows

The theory behind this proposal is that executives chase quarterly targets because they're required to report quarterly. Remove the quarterly report, remove the pressure. It sounds logical. But that theory has also been tested in the real world – and it doesn't hold up.

A CFA Institute Research & Policy Center study examined the U.K.'s decade-long experiment with mandatory quarterly reporting, required starting in 2007 and then dropped in 2014. Researchers tracked company investment levels – capital expenditures, R&D spending, property and equipment – before and after each regulatory change. What they found was that reporting frequency had no material impact on corporate investment behavior. Companies that stopped reporting quarterly results didn't invest more in the long term. Companies that started reporting quarterly results didn't invest less.

What quarterly reporting did affect was the quality of information available to individual investors, including more analyst coverage, more accurate earnings forecasts, and a richer information environment for everyone trying to evaluate a business.

The CFA Institute researchers were direct about the policy implication: If regulators want companies to think longer-term, changing reporting cadence is the wrong lever. The real drivers of short-termism are executive compensation structures, incentive misalignment throughout the investment chain, and governance failures... none of which are addressed by cutting quarterly disclosures in half.

Shivaram Rajgopal, a professor of accounting and auditing at Columbia Business School and one of the authors of the CFA Institute study, pulled no punches in a recent interview with Fortune: "This is a solution looking for a problem. Myopia over three months, the intended target, will simply be myopia over six months. What exactly have we accomplished?"

The SEC's proposal, in other words, accepts the cost (less information for investors) without delivering the benefit (more long-term thinking from management).

This Is What The Motley Fool Was Built For

David Gardner, co-founder of The Motley Fool, put it simply: "I strongly agree that this is a bad move for individual investors – it creates opacity and undermines trust." That's the Foolish house view. We think it's the right one.

Since our founding in 1993, The Motley Fool has always stood up for the individual investor – the average person saving for retirement, putting kids through college, building wealth one stock at a time. That person deserves the same access to company information that the big institutions have. They deserve transparency, not less of it. They deserve a market where the playing field tilts toward them, not away.

We're encouraged by a kinship with the self-directed individual investors from Reddit's 18 million-strong WallStreetBets community, who wrote a wonderful comment letter to the SEC in protest of the new rule:

The proposal rests on the theory that quarterly reporting causes short-termism among corporate managers. Whatever the merits of that argument as applied to the C-suite, it has the relationship to retail investors exactly backwards. Quarterly reports are the single most important leveling mechanism between retail and institutional investors in U.S. equity markets. Institutional investors have expert networks, channel checks, alternative data, satellite imagery of retailer parking lots, credit card panel data, and direct management access through conferences and one-on-one meetings that cost more than most of our portfolios. We have the 10-Q.

The SEC's public comment window is now open through July 6, 2026 – roughly another month. We are calling on you today, Fool, to seize this chance to make your voice heard. When we band together, we're no longer mere individual investors with a muted voice.

How to Make Your Comment Count

We strongly encourage you to submit a public comment at the following link:

CLICK HERE TO SUBMIT A PUBLIC COMMENT ON S7-2026-15

A few notes on the process:

• You'll be asked to put in your name, email address, and telephone number. The other fields, including your mailing address, are optional.
• In the box that says "Affiliation Name," be sure to write "The Motley Fool Community" (important note: do NOT click the box that says "I am submitting on behalf of a third party").
• Once you hit "Submit," you'll have the chance to review your comment and confirm you're not a robot.
• Submitting a public comment creates a searchable online record of your name and comment, so please be respectful and be sure your comment doesn't say anything obscene or offensive!

When you write your comment, here are a few key points to make:

• Quarterly reporting protects individual investors. Semiannual reporting doubles the information gap between insiders and ordinary shareholders. That gap is where volatility, uncertainty, and mistrust grow.
• The short-termism diagnosis doesn't justify this remedy. Research from the CFA Institute, which studied this exact maneuver in the U.K. market, shows that reporting frequency has no measurable effect on corporate investment behavior. The SEC is accepting a real cost – less transparency for individual investors – for a benefit that the evidence says simply won't materialize.
• The companies most likely to opt out are the ones where oversight matters most. Smaller, less-covered businesses operate with less scrutiny. Reducing their reporting requirements makes them harder to monitor, not easier to own.
• This is the wrong direction. Reg FD moved toward a more level playing field. This proposal moves away from it.
• What, exactly, is the problem? As the WallStreetBets comment letter put it: "The companies we trade are not being held back from greatness by the obligation to file four reports a year. ... The entire S&P 500 files a 10-Q every quarter, and the S&P 500 is at an all-time high. If quarterly reporting is crushing American capitalism, American capitalism is hiding it well."

To reiterate one thing: Please also mention The Motley Fool Community by name in the "Affiliation Name" box. We believe that signal matters – because it tells the SEC that this response represents a coordinated, informed community of individual investors.

CLICK HERE TO SUBMIT A PUBLIC COMMENT ON S7-2026-15

The SEC's public comment window is open until July 6, 2026. When it came time to fight for Reg FD and stand up for individual investors back in 2000, Fools showed up and changed the outcome. The SEC counted our letters and changed the law. This market, your market, our market was built on the belief that every investor deserves access to the same information at the same time. That belief is what's on the line. Let's show up, together, as a community, one more time. #Savethe10Q!

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