The following Letter Type H, or variations thereof, was submitted by individuals or entities.

Letter Type H:

Vanessa A. Countryman, Secretary
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090

Re: Proposed Amendments to Exchange Act Rules 13a-13 and 15d-13 — Optional Semi-annual Reporting in Lieu of Quarterly Reports on Form 10-Q [File No. S7-XX-XX]

Dear Ms. Countryman:

I am writing to express my strong opposition to the Commission’s proposal to permit companies to file semiannual reports on new Form 10-S in lieu of quarterly reports on Form 10-Q, as well as the accompanying changes to simplify Regulation S-X regarding the age of financial statements. While the Commission’s intent may be to reduce the compliance burden and curb "short-termism" in corporate governance, the proposed rules present structural risks that outweigh these hypothetical benefits.

Decreasing the frequency of mandatory disclosures will degrade market efficiency, severely harm retail investors, increase capital costs, and create a highly fragmented reporting environment. I urge the Commission to withdraw this proposal based on the following critical technical grounds.

1. Severe Degradation of Market Efficiency and Pricing Accuracy

The modern U.S. public market relies heavily on a continuous flow of highly standardized, periodic financial data. Extending the reporting window from 90 days to 180 days fundamentally breaks this continuity..

Delayed Price Discovery: Quarterly reporting ensures that asset prices dynamically reflect reality. Forcing investors to wait six months for updated, structured financial statement data will lead to massive informational gaps.
Earnings-Release Volatility Spikes: Instead of minor, incremental price corrections every 90 days, markets will experience massive, destabilizing price swings when data is finally released on Form 10-S..

Ineffectiveness of Form 8-K as a Substitute: Proponents may suggest that material event disclosures via Form 8-K will fill the gaps. However, Form 8-K lacks the comprehensive structure, balance sheet data, and mandatory MD&A (Management's Discussion and Analysis) overview that investors require to model long-term corporate health.

2. Heightened Informational Asymmetry and Harm to Retail Investors

The elimination of mandatory Form 10-Q filings does not stop information from being generated; it simply restricts who has access to it.
Institutional Disadvantage for Retail Investors: Large institutional investors have the capital and clout to schedule direct meetings with corporate executives, leverage alternative data streams (e.g., satellite imagery, credit card tracking), and use private channels to evaluate a company mid-year. Retail investors do not have this access. They rely heavily on the democratic nature of EDGAR-filed Form 10-Qs to level the playing field.
The Regulation FD Loophole: While Regulation FD prevents selective disclosure of material non-public information, executives interacting with institutional analysts will inevitably drop "mosaic" pieces of information that build a clearer picture for sophisticated firms, leaving retail investors completely in the dark.

3. The Proliferation of Non-GAAP and Unchecked Earnings Releases

If companies are not required to file a structured, SEC-reviewed Form 10-Q, they will not stop communicating with the market. Instead, they will shift toward highly customized, unregulated channels.

Rise of Fragmented PR Guidance: Issuers will likely substitute Form 10-Q with voluntary, unstructured press releases packed with bespoke, non-GAAP metrics designed to frame performance in the most flattering light possible.
Weakened Internal Controls over Financial Reporting (ICFR): Under Sarbanes-Oxley Section 404, management must evaluate material changes to internal controls on a quarterly basis. Moving to a semiannual cadence relaxes this discipline, allowing financial irregularities, accounting errors, or structural control weaknesses to persist unchecked for twice as long.

4.. Unintended Increase in the Cost of Capital

A foundational tenet of corporate finance is that higher information risk demands a higher risk premium.
The Lemon Problem: When corporate transparency decreases, investors naturally assume the worst regarding unstated data. This heightened uncertainty will cause investors to discount stock values and demand higher yields on debt issuances.
A Net Loss for Cost Savings: Any compliance cost savings derived from skipping two Form 10-Q filings per year will be utterly wiped out by the increased cost of capital driven by the market's information-risk premium.

5. Market Fragmentation and "Negative Signaling"

Because the proposal makes Form 10-S optional rather than mandatory, it creates a dual-track market ecosystem that will confuse participants.
A Two-Tiered Market: High-quality, transparent companies will likely continue filing Form 10-Qs voluntarily to maintain investor trust. Conversely, companies facing financial distress, transitioning business models, or seeking to obscure poor performance will eagerly opt into Form 10-S.
The Signaling Trap: Opting into Form 10-S will immediately be viewed by the market as a negative signal (i.e., "the company has something to hide"), triggering an immediate adverse market reaction for any firm attempting to utilize the new rule.

6. Opposition to Relaxing Regulation S-X Financial Statement Age Rules

The proposal to relax Regulation S-X rules regarding the age of financial statements in registration statements poses an unnecessary threat to capital-formation integrity. Allowing companies to market securities using financial statements that are up to 180 days old means investors in public offerings will be risking capital on completely stale data—especially in fast-moving tech, biotech, or highly cyclical sectors.

Conclusion

The quarterly reporting framework under the Securities Exchange Act of 1934 has been a cornerstone of the integrity of the U.S. capital markets for over half a century. Short-termism is a cultural and corporate governance issue driven by executive compensation structures and market trading dynamics; it cannot be cured by blinding investors.

The creation of Form 10-S will diminish corporate accountability, punish everyday retail investors, and inject systematic opacity into the market. I strongly urge the Commission to reject these amendments and retain the mandatory quarterly reporting framework on Form 10-Q.