The following is a guest post from Sandy Peters, senior head of financial reporting policy at CFA Institute. Opinions are the author’s own.
In December, the 2025 AICPA Conference on Current SEC and PCAOB Developments opened with a conversation with the Securities and Exchange Commission’s Chair, Paul Atkins. While he did not address the perennial debate over quarterly versus semiannual reporting, his remarks emphasized disclosures — particularly concerns about so-called “disclosure overload”.
This narrative is not new. In 2013, the CFA Institute challenged the premise of “disclosure overload” in a report titled “Financial Reporting Disclosures: Investor Perspectives on Transparency, Trust and Volume.” At the time, a growing body of commentary asserted that investors were overwhelmed by the volume of corporate disclosures. Notably absent from those discussions was any meaningful consideration of technology.
The 2013 report observed that investors were amid a technological transformation and were not, in fact, complaining about the volume of disclosures. CFA cited, among other examples, Jamie Dimon’s comments at the 2013 World Economic Forum regarding the number of pages in JPMorgan Chase’s 2012 Form 10-K, observing that investors don’t print out such documents but consume them electronically with the assistance of data providers and technology.
At that time, then SEC Chair Mary Jo White echoed the disclosure overload narrative, yet within months of issuing our report, the conversation shifted, from “disclosure overload” to “disclosure simplification” and “disclosure effectiveness.”
Fast forward to 2025. Recent remarks by Chair Atkins and other SEC commissioners have revived the “disclosure overload” narrative — this time against the backdrop of rapid advances in artificial intelligence. Unlike in 2013, the omission of technology from the analysis is no longer merely puzzling; it is deeply incongruous.
Recent press coverage and conference sessions have highlighted the growing use of AI in the preparation of financial information. At the same time, investors are increasingly using AI and large language models to analyze disclosures and inform investment decisions. As both preparers and investors undergo fundamental changes in how information is produced and consumed, it is difficult to reconcile the SEC’s disclosure overload narrative with today’s technological reality.
Risk factors as an example, and why it falls short
At the AICPA conference, Chair Atkins cited the length of the Risk Factors section in Form 10-Ks as evidence of disclosure overload, again pointing to page counts. From an investor’s perspective, this example is unpersuasive.
First, page counts are largely irrelevant. Investors, particularly younger generations, access information through data providers, structured datasets and electronic filings. They do not experience disclosures as stacks of 8.5×11 pages.
Second, investors increasingly use AI-enabled tools to analyze risk factor disclosures rapidly and at scale. These tools allow investors to detect subtle changes over time and to ask critical questions: Why was this risk factor modified? What new risk is management signaling? In this context, volume is not noise; change is information.
Over the past year, the SEC has increasingly suggested that reducing disclosures will lead to an increase in the number of public companies. Yet the Commission has offered no empirical evidence to support this claim or to establish that disclosure requirements are a meaningful driver of the long-term decline in public listings.
Correlation is not causation. To date, the SEC has not demonstrated that increased disclosure requirements have caused companies to remain private or that prior disclosure simplification initiatives materially increased public company formation.
Questions the SEC must answer
Before issuing any concept releases aimed at reducing disclosures, the SEC owes market participants clear, evidence-based answers to several fundamental questions.
Disclosures
- How did the SEC conclude that Regulation S-K produces vast amounts of immaterial information?
- Has the SEC conducted meaningful outreach to investors to support this conclusion, or is the narrative primarily driven by issuer concerns?
- What impact did the SEC’s disclosure simplification initiatives over the past decade have on public company formation?
- Given that much of Regulation S-K is principles-based, how can it be responsible for systemic disclosure of immaterial information?
- How has the SEC assessed whether any cost savings from reduced disclosures outweigh potential increases in the equity risk premium and cost of capital? Does the SEC believe reduced transparency lowers the cost of capital?
Number of public companies
- Has the SEC analyzed whether increases in regulation and disclosure requirements have actually caused the decline in public companies, rather than merely coinciding with it?
- From what starting point is the decline in public companies measured — 1980, 2000 or another period?
- What empirical evidence supports the claim that reducing disclosures will increase the number of public companies?
- What is the “right” number of public companies, and how would the SEC know when disclosures have been reduced sufficiently?
- How has the post-Great Recession search for yield and investors’ willingness to trade transparency and liquidity for perceived higher returns in private markets affected public listings?
- Has the SEC considered the impact of increased market concentration and fewer public companies in the United States and globally?
- Given that some jurisdictions, such as the United Kingdom, EU and Hong Kong SAR — many of which have less onerous disclosure regimes — have experienced similar declines in public listings, how can disclosures alone explain the trend?
Technology
- How has the SEC incorporated issuers’ use of AI into its assessment of disclosure volume and materiality?
- How has the SEC incorporated investors’ use of AI into its disclosure overload narrative?
- How is the SEC’s newly formed AI office contributing to this analysis?
A call for public input
These questions take on added significance following Chair Atkins’s Jan. 13 statement directing the Division of Corporation Finance to conduct a comprehensive review of Regulation S-K, including reconsideration of executive compensation disclosures.
Chair Atkins noted in his statement that since its adoption in 1982, Regulation S-K has served as the SEC’s central repository for disclosure requirements outside the financial statements. And he noted that over four decades, the repository has expanded significantly. Chair Atkins argued that Regulation S-K now elicits both material information and “a plethora of undisputably immaterial information,” invoking Justice Thurgood Marshall’s warning in TSC Industries v. Northway about burying investors in an avalanche of immaterial details.
That concern merits careful examination, but only if grounded in evidence and informed by how modern investors actually process information.
In a statement released ahead of his Feb. 11 testimony before the House Financial Services Committee, and in nearly identical remarks preceding his testimony to the Senate Banking Committee the following day, Chair Atkins again advanced the “disclosure overload” narrative. This time, he asserted, without citing a source, that public companies spend $2.7 billion annually to file their annual reports.
He suggested that these funds could instead be used to create jobs and lower the cost of living for American families, though he did not explain the mechanism by which reduced disclosure spending would achieve those outcomes.
Notably absent from his remarks was any acknowledgment that $2.7 billion represents only approximately 0.002% of America’s $124.3 trillion capital markets — markets he himself described as the deepest and most liquid in the world. Nor did he recognize that it is precisely the disclosure framework he is criticizing as established under the Securities Acts of 1933 and 1934 that helped build the transparency and investor confidence underpinning those U.S. markets — now widely regarded as the envy of the world.
Chair Atkins also brought a prop to the House hearing: Entergy’s 1,000-page Form 10-K. The visual was meant to dramatize the burden of disclosure. Yet Congressman Bill Foster (D-IL) directly challenged the premise, noting that such documents can be analyzed by machines in minutes. He further observed that companies themselves increasingly use AI to prepare disclosures. It was a pointed and effective challenge to the disclosure overload narrative, one to which the Chair offered little substantive response.
Will private markets cannibalize the IPO market?
Ironically, while the SEC seeks to increase IPO activity by reducing disclosures, policymakers are simultaneously seeking to expand retail investor access to private markets through pooled investment vehicles. This raises an uncomfortable question: Will easier access to public market investors by private companies through such retail access ultimately cannibalize the IPO market that the SEC is trying to promote through its disclosure initiatives?
If private companies can access public capital while benefiting from lower-quality accounting standards, limited disclosures and opaque valuation practices, why would they choose to go public at all? Allowing private companies to tap public capital without public market transparency may well reduce — not increase — the incentive to pursue public listings. The SEC should assess the extent to which these initiatives may produce conflicting or offsetting effects.
