r/WallStreetBets strongly opposes the SEC’s decision to weaken quarterly reporting.

The Securities and Exchange Commission legally issued last week loosened quarterly reporting standards for publicly traded companies. So far, the public comments that have been made to the financial manager about the proposal are very negative. But very good opposition was presented yesterday by the popular subreddit, WallStreetBets.

The community of “almost 18 million traders on Reddit” argued in the letter that financial statements – called 10-Q filings – “are one of the most important means of communication between traders and sellers in the US markets.”

“Organizational sellers have professional networks, video checks, other data, satellite images of retail parking lots, credit card group data, and access to direct management through meetings and public meetings that cost more than most of our portfolios. We have a 10-Q,” the letter reads.

Although the SEC does not eliminate 10-Qs, the regulatory process indicates that companies will be able to choose each year if they want to provide an annual report with three quarterly reports (as is the case now) or one annual report and one half year. The change in governance is particularly relevant as SpaceX – which is expected to share a never-before-seen IPO with retail investors – and a host of other leading and advanced AI and technology startups begin pursuing IPOs.

WallStreetBets says that this will not only reduce the amount of real-time visibility into the financials of a publicly traded company – also referred to by the Commission and in this letter as “issuers” – but that this will quickly damage the wallets of retail investors:

The Commission’s release talks about reducing costs for donors. We would like to know what the Committee thinks is the price for a wholesaler to be responsible for six months without a single approval from the company. The answer is not zero. The answer is the spread between what they know and what we know, multiplied by every fraction we have during the gap. Someone will take over that spread. We have an idea of ​​who won’t be.

The SEC has supported its proposal by saying that annual reporting would reduce the cost burden and time associated with filing a quarterly 10-Q. It said the move would help the company focus on long-term growth against Wall Street’s quarterly beat.

WallStreetBets thinks the following assumptions are valid:

We also want to register, respectfully, our opposition to the idea that providing quarterly reports is a burden that the Commission can raise to help companies focus on the long term. The companies we do business with are not backing down from greatness because of the obligation to submit four annual reports. Apple files a 10-Q every quarter and has a net worth of nine hundred billion dollars. Nvidia files 10-Q every quarter and is worth more than the GDP of most G20 countries. The entire S&P 500 dials a 10-Q every quarter, and the S&P 500 is at an all-time high. If the quarterly reports are a breakdown of American capitalism, American capitalism is hiding well. We have looked.

The trading subreddit is not alone. The SEC’s arguments have been clearly rejected by more than 120 people in the first week of the 60-day public comment period. The group includes a number of brokers, some of whom posted anonymously, as well as certified financial experts, hedge fund managers, and even one. former SEC attorney (who, to be fair, also used the opportunity to promote his book).

This change of power has even affected all sides of the political spectrum. One prominent economist wrote that “(a)fter years of fighting ideologically driven rules that reveal political bias, I do not expect a Republican-led committee to grant the right to have gifts that hinder market transparency and regulate the sector against day traders.”

Even the (few) people who have commented on the rule have some caveats, such as pointing out that companies release monthly income statements and accounting statements instead of detailed reports of any kind.

The public comment period is open until early July, and law professor Ann Lipton (who started lighting fixtures WallStreetBets Review on Bluesky) he recently saidThe big financial companies don’t have to try anymore.

But so far, no one has protested as strongly as the WallStreetBets group, which has been protesting. murmurs since the GameStop craze five years ago. It also quoted this history in its letter, with a surprising twist:

Some of us are very good at this and some of us, in technology security law, are terrible at this. Most of us learned how hard the 10-Q was, meaning we bought a stock, saw it drop 40% in earnings, and then read the notes to find out why. It’s a stupid system of behavior and we agree. But that’s the whole way a generation of salespeople taught themselves to read financial statements, and the Commission now wants to cut that way in half.