A proposal by the U.S. Securities and Exchange Commission (SEC) to allow companies to choose to file financial reports semiannually drew a large number of public opposition letters during the 60-day comment period that ended Monday.

According to tracking data maintained by Tzachi Zach, an accounting professor at Ohio State University, of the 8,011 letters submitted as of July 3, the vast majority (7,925, or 99%) came from individuals and authors opposing the plan, while 34 expressed support and 52 held "conditional" views. Zach said in an email Tuesday that more letters may have been submitted since then, and the tracker will be updated soon to reflect them.

The tone and scope of the opposition varied. Opponents included anonymous individuals, such as a June 30 email that read: "Keep quarterly reporting, stop taking money from us." Another Reddit community, wallstreetbets, which claims to have 18 million retail investors, said in a letter that the 10-Q report "is the most important balancing mechanism between retail and institutional investors in the U.S. stock market."

Opponents of the move also included financial executives, such as David Bolling Wells, former CFO of Netflix. While acknowledging that there are reasonable arguments for a semiannual reporting cycle, he still said that quarterly reporting is "a fundamental element of democratic capital markets" and urged the SEC to "make decisions that keep U.S. capital markets globally leading by continuing the current model."

An SEC spokesperson declined to comment on the feedback received. However, SEC staff are expected to review the comments as they prepare recommendations on whether to move forward with a final rule.

Although many expect the SEC to continue advancing the proposal, according to Daniel Brinks, a partner at StoneTurn, the reaction has raised questions about whether the commission can move forward without inviting some kind of challenge. Brinks previously served as a senior enforcement accountant at the SEC, specializing in forensic accounting.

"When the proposal first came out, I thought it would definitely pass," Brinks said in an interview with CFO Dive. "The interesting thing is whether they will decide to move forward, and whether that will expose them to a rule challenge. I can't recall another rule with such one-sided comment letters."

This reaction contrasts sharply with the more balanced feedback the SEC received when it sought comments on reporting frequency in 2018. According to Sarah McVay, an accounting professor at the University of Washington's Foster School of Business, only 43% of feedback in 2018 was opposed.

McVay said she was shocked and opposed when the proposal first came out, but given the SEC's current deregulatory stance, she expects the SEC will still finalize the proposal.

"Unfortunately, despite the opposition, it's still likely to pass," she said in the interview. "I hope I'm wrong."

SEC Chairman Paul S. Atkins has said the move is part of his agenda to "make IPOs great again," aimed at reshaping rules governing public companies to encourage companies to go public and stay public, reducing the "rigidity" of SEC rules, as CFO Dive previously reported.

"In the coming months, I expect the Commission to consider a series of proposals that, if adopted, would not only redefine what it means to be a public company but also make going public attractive again," Atkins said in a statement in May.