SEC Commissioner Urges Reassessment of Public Company Reporting and Proxy Rules

SEC Commissioner Mark T. Uyeda recommended several regulatory actions to make it less onerous to be a public company and encourage more businesses to go, and stay, public. He advocated for reconsidering the frequency of periodic reporting, increasing the transparency of the SEC's rules, and examining the concentrated power of proxy advisory firms.

In remarks at the 2025 Institute for Corporate Counsel, Mr. Uyeda questioned the utility of the current quarterly reporting regime, specifically the requirement to file Form 10-Q. He argued that the significant costs and burdens of preparing these reports—including certifications under Sections 302 and 906 of the Sarbanes-Oxley Act—may not offer a corresponding benefit to investors, particularly when earnings releases and Form 8-K filings often provide more timely information. He suggested that shifting to a semi-annual reporting cadence would align the U.S. with major markets like the UK and EU, reduce short-termism, and encourage more companies to enter and remain in the public markets.

Mr. Uyeda emphasized the need for regulatory transparency, asserting that SEC rules and policies must be explicitly stated rather than based on unwritten staff practices or internal analyses. He cited the Commission’s recent Policy Statement regarding mandatory arbitration provisions as a positive step toward clarifying policy where a de facto ban previously existed. He contended that the Commission should avoid using the "public interest" standard under Section 8(a) ("Taking effect of registration statements and amendments thereto") of the Securities Act as a tool for subjective merit review, arguing that such an approach contradicts Congressional intent.

Finally, Mr. Uyeda raised concerns regarding the concentrated power of proxy advisors and the practice of "robo-voting." He warned that funds and asset managers that coordinate their votes based on proxy advisors' recommendations may effectively be acting as a "group" under SEA Sections 13(d)(3) ("Periodical and other reports") and 13(g)(3). Mr. Uyeda argued that if such aggregated voting power exceeds 5%, these entities should be subject to reporting requirements, including the filing of a Schedule 13D, to ensure compliance with federal securities laws.