SEC Chairman Paul S. Atkins’ push to streamline public-company regulation and “make IPOs great again” is colliding with one of Wall Street’s deepest structural questions: how much disclosure investors really need.

The agency’s proposal to allow companies to report financial results semiannually instead of quarterly has fueled concern among investment banks, institutional investors, and market advisors, even as many issuers welcome the prospect of a lighter disclosure burden.

Speaking at the Milken Institute Global Conference in Los Angeles, Atkins laid out a broad deregulatory agenda aimed at reducing friction in public markets, simplifying disclosure rules, and encouraging more companies to go public.

A major focus of his remarks was overhauling corporate disclosure requirements under Regulation S-K, which governs much of the narrative disclosure in SEC filings. Atkins described the effort as a “spring cleaning” of decades-old rules that have contributed to increasingly lengthy and complex filings.

He argued that public company reports have become excessively burdensome and difficult for investors to navigate, citing Form 10-K filings that can approach 1,000 pages. The SEC, he said, should refocus disclosure requirements on information that is financially material and genuinely useful to investors.

Atkins also emphasized revitalizing the IPO market, noting that the number of publicly traded companies has declined significantly over recent decades, falling from a mid‑1990s peak of nearly 6,000 to roughly two-thirds of that level today. He framed the effort as part of a broader push to strengthen public markets, improve capital formation, and maintain the competitiveness of US markets globally.

Some market participants are skeptical about the proposed changes.

“I believe that the SEC kind of rushed this through a little bit,” said Edward Best, co-chair of the capital markets practice at Willkie Farr & Gallagher. He argued that regulators need to evaluate the proposal “holistically” because of the interconnected effects on exchanges, auditors, underwriting practices, and investor expectations.

“It was like 250 pages,” Best said of the SEC proposal. “The changes are relatively minor, but the SEC seemed to take 250 pages to explain and justify itself.”

The proposal would allow companies to file formal financial reports twice a year rather than quarterly. Supporters argue the move would save companies time and money while encouraging management teams to focus on longer-term business performance instead of quarter-to-quarter results.

“I think the vast majority of public companies like the idea of less reporting,” Best said. “It’ll save them time, save them money, and arguably allow them to focus on longer-term issues.”

Concerns over market transparency

Institutional investors, however, are far less enthusiastic.

“They want as much information as possible,” Best said.

Advisors warn the proposal could fundamentally alter how investors evaluate companies and potentially weaken confidence in all but the largest public companies over time.

Riveron senior managing director Jeff Bernstein said he does not believe a shift toward semiannual reporting would benefit public markets, especially small and mid-cap stocks, arguing it could weaken fundamental investing, fuel speculative behavior, and accelerate the migration toward passive investing.

“We are already at a point where ETFs have taken over such a large swath of mutual funds, pension funds, etc.,” he said. “Creating consistent superior risk-adjusted returns through single stock investing has become increasingly hard. This is going to make it even harder to make the argument and will push even more interest into ETFs.”

Bernstein said longer gaps between earnings reports could force analysts and investors to seek informational advantages outside of traditional financial disclosures and increase emphasis on corporate announcements that don’t have a clear financial impact.

He also suggested smaller public companies could face credibility issues if they adopt semiannual reporting before large-cap peers.

“Unless Microsoft, Oracle, Salesforce and the other big companies go to semiannual, if you’re a smaller company and say, ‘I’m going to go semiannual before it is commonplace,’ people are going to sell your stock,” he said. “The first instinct will be ‘they are trying to hide something.’”

Underwriters flag structural risks

Significant resistance is emerging from the securities industry itself, particularly investment banks that underwrite debt and equity offerings.

At the center of the concern is the “comfort letter” process, which is a key component of underwriters’ legal due diligence in securities offerings. Comfort letters, issued by external auditors, provide assurance that a company’s financial statements comply with accounting standards and that no major undisclosed financial deterioration has occurred since the last reporting period.

Under current practice, auditors generally cannot issue comfort letters if financial statements are more than 134 days old. That threshold becomes problematic under a semiannual reporting regime.

“If you move to semiannual filings, you’ll exceed that 134-day threshold twice a year,” Best explained. “So now investment banks are asking: how are we going to get comfort letters?”

The issue is not merely theoretical. Large public companies frequently access capital markets to issue debt or equity.

“Most Fortune 500 companies raise debt almost every year, sometimes multiple times a year,” Best noted.

Best is already preparing a formal comment letter to the SEC asking regulators to address those downstream effects before finalizing the proposal.

“Our message is basically: ‘We’re neutral on the proposal itself, but please don’t rush to adopt something until you have figured out how it’s all going to shake out,’” Best said.

Adoption of framework is uncertain

Some market participants said that even if the SEC ultimately permits less frequent reporting, investor expectations and long-established market practices may prevent widespread adoption.

One equity capital markets banker said, “Most folks will keep to the quarter because that’s what investors want. If a company CEO came out and said, ‘I’m only reporting a half year,’ investors may look askance at someone who comes out like that.”

Even companies that favor lighter reporting requirements are uncertain how investors will react if formal disclosures become less frequent.

Legal departments, accountants, and management teams generally support the proposal because it reduces compliance burdens and potentially lowers litigation exposure. But treasury departments responsible for financing corporate operations are more cautious.

“Their concern is: ‘We still need to finance the business,’” Best said. “‘If we go to market with six-month-old financials, will investors still buy our debt or equity?’”

That uncertainty could ultimately determine how widely companies adopt the optional framework.

“Absent strong pushback from investors, most companies probably would adopt semiannual reporting,” Best said. “But if major institutional investors collectively said, ‘We’re not buying securities from companies that don’t provide quarterly financials,’ that could change everything.”

Operational challenges for capital markets

Bankers also warned that the current mechanics of US capital markets are deeply intertwined with quarterly reporting schedules.

A second ECM banker said “the devil’s in the details” because much of the market infrastructure surrounding follow-on offerings and secondary issuances depends on existing reporting conventions.

A longer gap between earnings reports could complicate blackout periods, material nonpublic information restrictions, and the timing of secondary offerings.

With longer periods between reports, “at what point are they able to do something without it seeming like they have material non-public information about their own results?”

Best agreed. “The longer companies go between periodic disclosures, the greater the chance insiders possess material nonpublic information,” he said.

The banker noted that changes would likely matter less for IPOs because issuers in new listings are generally marketed on long-term growth expectations.

The proposal would also require coordination across multiple regulatory systems.

Stock exchanges including the Nasdaq and New York Stock Exchange maintain their own listing standards tied to periodic reporting requirements. Auditor practices are governed by standards overseen by the Public Company Accounting Oversight Board.

“All of these different pieces of the puzzle have to fit together,” Best said. “Don’t implement one part without ensuring all the connected parts are ready too.”

The proposal could also create new litigation risks if investors later argue companies delayed disclosure of deteriorating business conditions.

Public comments are due 60 days from last week’s proposal after which the SEC will review them and determine whether to issue a final rule. Best said he expects the issue to be resolved no later than the end of the year.

Part of a broader SEC realignment

The semiannual reporting debate comes as Atkins pursues a broader reshaping of SEC priorities.

At the Milken event, Atkins said the SEC is shifting enforcement efforts toward significant fraud and market-manipulation cases rather than technical rule violations. He also highlighted efforts to create clearer regulatory boundaries for digital assets through coordination with the Commodity Futures Trading Commission.

Atkins argued that regulatory uncertainty has pushed crypto innovation offshore and said the SEC should support innovation while maintaining investor protections.

He also discussed possible structural changes involving exchange-traded funds, including allowing ETF share classes within mutual funds to create potential tax efficiencies for investors.

Overall, Atkins framed the SEC’s current agenda as an effort to preserve the global dominance of US capital markets by making regulation more flexible, efficient, and innovation-friendly.

Critics, however, warn that reducing disclosure requirements too aggressively could weaken transparency, impair price discovery, and further move markets toward passive investing.

“The SEC is well aware of all these issues,” Best said. “I think everyone will eventually adapt, but there will probably be a couple years of discomfort while markets figure out the new norms.”