Almost nobody wants this SEC change

• The agency has received some 221,000 comments in total — a record number, a person familiar with the agency's operations tells Axios.

Why it matters: Investors say they need quarterly financial reports to understand what companies are doing.

• Institutional investors, former SEC officials and academics also filed objections.

State of play: A simple tally of the comments published on the SEC website as of Monday finds about 169,000 individual comments plus close to 52,000 submitted via petitions and form letters. The deadline for filing comments was July 6, but the agency is still processing responses.

• It's hard to sort through such a deluge, but Tzachi Zach, an accounting professor at Ohio State University's business school, has been using AI to do the work.

By the numbers: More than 99% of the responses oppose the change, according to his tracker.

Zoom out: Government agencies often propose rule changes, but rarely do they strike such a chord with the public. It's even more unusual for the agency to hear from regular investors, as opposed to more institutional voices.

• That's partly because this rule is easy to understand, as opposed to more technical ones, Zach says.
• He also notes that the investing site Motley Fool and advocacy group Better Markets have had successful outreach campaigns urging investors to speak up.

Catch up quick: Since 1970, most public companies have been required to file what's known as a 10-Q, giving investors a look at their financials for the quarter.

• Companies typically report quarterly earnings around the time of the 10-Q, and investors pay close attention — stocks can move sharply on what's disclosed.
• President Trump argued for the switch last year.

Where it stands: The SEC says loosening the requirement — leaving it up to companies as to whether they file quarterly or twice a year — could encourage more long-term thinking and reduce regulatory costs.

• The change could also spur more firms to go public, part of SEC chairman Paul Atkins' push to "make IPOs great again."

The other side: The Chamber of Commerce, the Business Roundtable and Exxon Mobil filed comments supporting the change. They argue that companies already communicate a lot through other channels.

Zoom in: In their comments, U.S. investors, from big asset managers like Vanguard to retail investors, say that these reports are critical to their decision-making.

• Less frequent reporting would be a blow to the transparency that makes U.S. markets favored around the world, they say. And less information would push investors to price the cost of that opacity into valuations.

• Investors also point out that for large companies, the costs of filing a quarterly report are incidental — the SEC estimates about $198,000 annually per company — and that they are doing this work regardless of whether they report it or not.
• "If quarterly reporting is crushing American capitalism, American capitalism is hiding it well," wrote r/wallstreetbets, the stock trading community on Reddit.

Between the lines: Considering the degree of investor opposition, companies may wind up sticking with the quarterly cadence — even if the SEC winds up going through with the change.

• Even in their supportive comments, the Chamber and Roundtable say many companies will still publish quarterly.

Reality check: And companies that choose to report less often would still need to file disclosures after major events.

• "If the factory burns down, they're not supposed to keep it a secret for six months," says Mark Roe, a corporate law professor at Harvard Law School.

What's next: It's not clear when — or if — the rule takes effect. The SEC only has to consider these comments. It can withdraw the rule, leave it pending indefinitely or modify it.

• The negative response is "hard to ignore," says Shivaram Rajgopal, an accounting professor at Columbia Business School who's studied this.