CEI leads free-market Coalition Letter applauding SEC Proposal to End Quarterly Reporting Mandate With Semiannual Option

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Dear Chairman Atkins:

As leaders of conservative and free-market organizations interested in reducing red tape that

limits opportunities for middle-class investors and entrepreneurs, we applaud the SEC for this proposed rule to give public companies the option of semi-annual reporting.

We believe that easing the reporting mandate to semiannual from quarterly is long overdue, as

most other countries have moved away from or never implemented requirements for public firms to report to investors this frequently. Thus, the current mandate puts American companies and their shareholders at a competitive disadvantage.

The costs of the quarterly reporting mandate are substantial, and giving companies the

semiannual option would result in significant savings for many firms. As noted in this rule from the SEC’s economic analysis, a company that took advantage of the option to move from

quarterly to semiannual reporting would save on average $198,000 per year. This savings could be used to pursue growth opportunities for the company that could benefit its employees and

shareholders.

As the rule notes, the reduced costs of semiannual reporting “could also be a positive factor in encouraging additional companies to raise capital through registered securities offerings or to become or remain a public company.” It is important to also note that this rule does nothing to change the SEC’s numerous anti-fraud rules and requirements that public companies

immediately disclose material events that could affect financial performance.

This rule is ultimately about advancing investor choice. If investors really like quarterly financial reports, they could find companies that still issue them. But investors who would rather

companies use the cost savings to enhance their bottom line should not be denied the benefits of the semiannual option.

Thank you for your consideration on this important matter.

John Berlau
Director of Finance Policy
Competitive Enterprise Institute

Ashley Baker
Executive Director
The Committee for Justice

Patrick M. Brenner
President & CEO
Southwest Public Policy Institute

Ryan Ellis
President
Center for a Free Economy

Daniel J. Erspamer
CEO
Pelican Institute for Public Policy

Paul J. Gessing
President
Rio Grande Foundation

Phil Kerpen
President
American Commitment

Karen Kerrigan
President & CEO
Small Business & Entrepreneurship Council

George Landrith
President
Frontiers of Freedom

Andrew Langer
President
Institute for Liberty

Ross Marchand
Executive Director
Taxpayers Protection Alliance

Caroline Melear
Fellow, Finance, Insurance, & Trade Program
R Street Institute

Charles Sauer
Founder & President
Market Institute

Tom Schatz
President
Citizens Against Government Waste