Hello fellow investors,
Throughout our history, our company has stepped forward when important regulatory decisions affect individual investors. It’s time to dust off our bully pulpit and do it again.
A proposal is now on the table to allow companies to elect to reduce the number of public-company reports from four times a year to just two. We think that’s a mistake!
At its heart, investing is ownership. When you own a piece of a business, you deserve regular, transparent communication from that business. Reducing reporting requirements weakens the connection between companies and their owners.
Some argue that fewer reports would reduce costs. Maybe. Although in an age of AI and increasingly efficient disclosure tools, even that point is debatable. Others argue it would ease the pressure to manage quarter to quarter. But short-termism comes from how people react to information, not from the information itself. Taking the reports away doesn't make anyone more patient. It just makes everyone less informed.
What isn’t debatable is that less information rarely creates better-informed owners.
Imagine owning a business and getting updates from your managers only twice a year. It would still run every day. You'd just know far less about how it was doing. That's effectively what's being proposed here. Companies will continue operating every day. Products will be launched. Customers will be won and lost. Strategies will succeed and fail. Yet under this proposal, owners would receive only half as many official updates about the businesses they own.
Less transparency doesn’t eliminate uncertainty. It increases it. And when information finally does arrive, the surprises are likely to be bigger, the reactions sharper, and the volatility greater. Right?
Back in 2000, the SEC opened a public comment period on a proposal called Regulation Fair Disclosure (Reg FD). Fools showed up in force. Our community submitted roughly 65% of all comment letters! The rule ultimately passed, and SEC Chair Arthur Levitt later visited Fool HQ to thank us. He directly credited the Fool Community as the critical force behind the outcome.
Twenty-six years ago, Fools helped win greater transparency for individual investors. Now we have an opportunity to help preserve it.
Comment now on the proposed Semiannual Reporting rule at SEC.gov.
In the “Affiliation Name” box, mention The Motley Fool Community. This signals to the SEC that your comment is part of a coordinated, informed community of individual investors. And please keep your comment respectful. These are public, official filings, and a thoughtful voice is the most persuasive one.
