Remarks by Commissioner Uyeda on Reducing Public-Company Reporting Requirements
Mark T. Uyeda, a Commissioner of the U.S. Securities and Exchange Commission, delivered these remarks focusing on reducing public-company reporting requirements. The speech highlights the importance of transparency and efficiency in the regulatory framework, particularly in the context of quarterly reporting obligations.
Uyeda begins by emphasizing the SEC's commitment to fostering strong capital markets, which are vital for economic growth, job creation, and innovation. He underscores the role of law in protecting investors and maintaining fair, orderly, and efficient markets. The Commission's efforts to encourage more companies to go public and facilitate investment in private markets are also discussed.
The core of the speech revolves around the idea of reconsidering periodic reporting requirements. Uyeda argues that quarterly reporting imposes significant burdens on public companies, leading to increased costs and a focus on short-term accounting performance rather than long-term value creation. He highlights the SEC's previous requests for public comment on quarterly reporting, aiming to promote efficiency and reduce unnecessary duplication in disclosure.
Uyeda provides examples of other jurisdictions that have shifted to semiannual reporting, such as the U.K. and the European Union, without negative impacts on capital markets. He suggests that companies could still report earnings and other information on a quarterly basis using Form 8-K, even if they adopt a semiannual reporting schedule. This approach would provide more flexibility and align reporting periods with the needs of shareholders, business cycles, and securities analyst coverage.
The speech also touches on the need for transparency in the regulatory framework. Uyeda criticizes the SEC's reliance on secret internal writings and codes, arguing that the rulebook should be clear and openly stated. He highlights the importance of transparency in shareholder proposals and the Commission's decision to articulate policies regarding mandatory arbitration provisions.
Lastly, Uyeda addresses the issue of unaccountable and concentrated proxy voting power, emphasizing the need for market participants to comply with statutory and SEC requirements when acting in a coordinated manner. He discusses the implications of coordinated proxy voting on compliance with reporting requirements under the Securities Exchange Act.
