Daved blogged last week about an SEC media statement that the agency is prioritizing a proposal to eliminate quarterly reporting requirements. That same day, Bloomberg and others also reported on similar comments from SEC Chair Paul Atkins.

Does the potential demise of 10-Qs mean all quarterly communications – and disclosure lawyer jobs – will go away? It’s way too early to tell, but my crystal ball says: “probably not.” For example, here’s an excerpt from the Bloomberg article about Chair Atkins’ interview:

He noted that many investors get more information from earnings calls rather than the quarterly reports.

So, there would be disclosure issues involved with the earnings call – maybe even more, in the absence of a 10-Q. This Business Insider article speculates on how the change to reporting requirements could affect us “pencil pushers.” The article repeats the point about investor demands for quarterly earnings – and also points out that “less reporting doesn’t mean less work” – so it’s unlikely our field will fade into oblivion and only be relevant 1-2 times per year. On the other hand:

The biggest losers, people said, may be for-hire professionals called in on an ad-hoc basis to help pull quarterly earnings together, including corporate lawyers and auditors.

In response to the SEC’s 2019 request for comment on this issue, the Society for Corporate Governance filed a report showing that the costs associated with lawyers and accountants were among the most common concerns.

The article says that providers of financial data will also need to adapt.

For now, I’m predicting that if the SEC takes action, “less reporting doesn’t mean less work” – but also “there’s probably a way to do this better.” In his blog, Dave cited to letters from the 2019 request for comment on this issue. Those comments gave reasons and ideas for how information and related disclosure issues will continue to flow – even if the framework isn’t exactly the same as what we have right now.

For example, as this recent Cooley memo points out, companies may need to rethink executive compensation disclosures that currently can appear in Form 10-Qs and would otherwise need to be disclosed in a Form 8-K. As Dave mentioned, companies would also need to give serious thought to insider trading and securities offerings issues.

In a nutshell, “private ordering” can be efficient for some – but may create extra headaches for others.

– Liz Dunshee