U.S. — The U.S. Securities and Exchange Commission concluded the public comment period on Monday for its proposed rule to allow semiannual reporting. The proposed rule, announced in May, would permit companies to satisfy interim reporting obligations under federal securities laws with semiannual reports instead of quarterly filings.

As of Tuesday evening, a database created by Ohio State University accounting professor Tzachi Zach showed 8,080 comment letters submitted regarding the proposed rule. Of these, 7,994 opposed the proposal, while 34 supported it, and 52 were conditional. Zach's database also identified 33 public comment letters from individuals in active corporate roles, with 25 opposing the proposal, two supporting it, and six classified as conditional.

"The deadline was yesterday to submit, but there is a lag between the time that the person submits until the time that the SEC puts it in the docket," Zach said. Neil Hansen, Senior Vice President and CFO of ExxonMobil, submitted an 11-page comment letter on June 24 supporting the SEC's proposal. He stated that semiannual reporting would not materially affect ExxonMobil's insider trading policies or blackout periods.

Hansen explained that these policies are tied to quarterly earnings releases, not Form 10-Q filings. "If we elect semiannual reporting, the company would expect to continue providing quarterly financial disclosures through earnings releases furnished on Form 8-K," Hansen said. "We observe that substantially more emphasis is placed on these timelier communications and broader avenues of information." Hansen recommended that semiannual reporting remain optional due to differences among companies in their industries, investor bases, capital needs, and complexity. ExxonMobil also proposed allowing companies to file abbreviated quarterly financial statements via a new Form 8-K item, rather than mandating a full Form 10-Q.

National Bankshares CFO Lora Jones expressed support for the rule. "We are in favor of the proposed rule," Jones said. "The rule will give companies the ability to choose the option appropriate to their shareholders' preference and provide greater ability to manage reporting resources."

Douglas K. Howell, CFO of Arthur J. Gallagher & Co., said his company fully supports reducing reporting frequency. "We fully support the Commission's proposal to reduce reporting frequency; however, the public debate surrounding this issue appears to be limited to only two options: quarterly and semiannual," Howell said. "We believe there is a third alternative that also merits consideration, which may prove satisfactory to investors concerned about a move to semiannual reporting—a 'triannual' reporting framework."