On May 12, the Securities and Exchange Commission (SEC) released the second episode of its podcast, Material Matters, with Chairman Paul S. Atkins hosting Jim Moloney, Director of the Division of Corporation Finance (the Division). Director Moloney, who returned to the SEC after 26 years in private practice, described the current moment as “monumental,” signaling that broad changes are imminent: “This is a time where the rules are going to be updated, they’re going to be changed, and the world is going to change as a result.” The conversation covered the Commission’s rulemaking agenda, proposed shifts in reporting cadence, and efforts to cut through the overwhelming volume of public company disclosure.
The Division of Corporation Finance: Return to Informal Guidance
To start, Director Moloney emphasized that the Division has resumed issuing guidance that market participants depend on: no-action letters, exemptive orders, and a newly rebranded set of interpretive releases now called Corporation Finance Interpretations or CFIs (formerly Compliance and Disclosure Interpretations, or C&DIs). Director Moloney recounted that when he arrived at the SEC late last fall, market participants complained to him about the reduction in informal, staff-level guidance saying “Jim, there haven’t been any no-action letters, there hasn’t been any guidance, what’s going on?” He approached Division staff and learned the directive had come directly from leadership. Now, Maloney has directed the staff to change course. “Our job here is to help the markets understand what the rules are and how to comply with them” he said. Moloney asserted that the Division is now “back in business in the game of transparency.”
Director Moloney’s characterization highlights a longstanding tension in SEC practice: the balance between informal, staff-level guidance—such as no-action letters—and the more formal notice-and-comment rulemaking process. No-action letters provide practical, real-time guidance to market participants navigating complex regulatory questions. That guidance can be especially relevant in times of rapid innovation such as we are seeing today with blockchain technology. But informal guidance can also raise procedural concerns. Critics have noted that no-action letters lack the procedural protections of formal rulemaking, can create de facto safe harbors without public input, and may not offer the same legal certainty or democratic legitimacy as rules adopted through notice-and-comment procedures. Further, no-action letters apply to specific facts and circumstances supplied in a no-action letter request. Third parties may rely on no-action letters only to the extent their facts and circumstances are substantially similar to those described in the underlying request.
Nevertheless, for clients operating in fast-moving markets, the availability of informal guidance channels offers a valuable opportunity to seek regulatory clarity in real time, enabling more confident decision-making even as the formal rulemaking process continues to evolve.
An Ambitious Rulemaking Agenda
The conversation turned to the SEC’s Regulatory Flexibility Agenda, which Director Moloney described as an early list of upcoming rulemaking actions. Published periodically by the Office of Management and Budget, the agenda — which currently includes over 22 items — foreshadows what’s to come across a range of initiatives: simplifying disclosures, revisiting rules on proxy solicitors and shareholder proposals, and addressing climate-related disclosures that have been challenged in court. Director Moloney argued that the Commission cannot afford to stand still: “We simply can’t assume that what was developed 50 years ago, 80 years ago, still holds true today.” He expressed confidence in the team assembled to execute on this agenda, noting they are “lined up pretty much ready to go.”
Semi-Annual Reporting: A Voluntary Shift in Cadence
A centerpiece of the discussion was voluntary semi-annual reporting — a shift that would allow public companies to file one 10-Q and one 10-K annually, rather than the current three-Qs-and-a-K cadence. Proponents have long framed this proposal as freeing management to focus on building the business. Director Moloney stressed that the shift would be voluntary and flexible. Management teams could continue their current quarterly cadence, or adopt semi-annual reporting, though any election would lock in for a full year before a company could switch back. He predicted that large, well-capitalized companies would likely maintain the existing schedule. In contrast, newly public companies and those in certain industries, such as life sciences firms focused on FDA drug trials, might benefit most from the flexibility. This variability, Director Moloney said, is central to the SEC’s goal of revitalizing the IPO market: “We want more diversity in the size, shape of the companies that we have for our investors.
Critics have suggested that quarterly reporting is the greatest leveling mechanism between retail and institutional investors, arguing that a six-month silent period creates substantial information asymmetry between those groups. But Director Moloney stated that companies electing semi-annual reporting would continue to provide interim information through 8-K current reports, earnings calls, and investor updates, asserting “there won’t be a dearth of information.” Chairman Atkins characterized semi-annual reporting as “not a revolutionary concept,” and Director Moloney agreed, noting that it has been used in Europe and was the original US reporting model before ever-increasing demands for “more information, more information, more information.”
A “Spring Cleaning” of Regulation S-K
Perhaps the most consequential discussion centered on the SEC’s planned overhaul of Regulation S-K, the body of rules prescribing mandatory line-item disclosures in registration statements, proxy statements, and periodic reports. Director Moloney described the regulatory accretion vividly: “When I started 30, 40 years ago, they were pretty thin. You could fit them in one book. Now, it’s a five-volume set.” He compared the accumulated disclosure requirements to “30 coats of paint on a banister,” calling for the SEC to put everything on the table and evaluate whether each requirement remains necessary.
Executive compensation disclosure served as Director Moloney’s central illustration, comparing information overload to a cluttered attic and basement. “While well-intentioned at the time, it has grown to the point where there’s so much information, nobody’s looking at it, and you’re actually confused about how much the top insiders are getting paid.” It may be worth noting that SEC disclosure requirements, intended to increase transparency and align pay with performance, have paradoxically spurred further increases in executive compensation through previously unavailable benchmarking. Director Moloney articulated a guiding principle for the reform effort: root disclosure “in materiality, in what I think a reasonable investor would want to see, because otherwise, if everything is material, nothing’s material.”
Risk factor disclosure drew similar scrutiny. Director Moloney described how a disclosure item that did not originally exist in Regulation S-K “evolved to the point where there are 20, 30, 40 pages of risk factors,” and noted that an effort to address the length by requiring an executive summary only added to the problem. Chairman Atkins reinforced the concern about repetitive disclosure, noting that companies disclose risks “in multiple places in their documents very repetitively.” Director Moloney confirmed that he had ended a practice requiring key disclosures to be repeated three times within a single filing.
Materiality Over Volume — and a Caution on AI
Both Chairman Atkins and Director Moloney pushed back against the notion that artificial intelligence can solve the problem of disclosure overload. Director Moloney recounted an anecdote about someone producing three bullet points, using AI to expand them into a 20-page memo, and then using AI again to condense the memo back to three bullet points. “I thought that was very apropos,” he observed, “because AI may be an interesting technology that is evolving [but] simply giving more data, simply collecting data for the sake of collecting data and information, doesn’t necessarily help the investor.” He argued that forcing companies to disclose everything out of litigation fear results in a dynamic where “investors are left on their own to figure out what is really material.” The solution, in Director Moloney’s view, is structural: “If you force the marketplace to focus on what’s material, investors and the markets will be able to focus on what’s material.”
Engaging Market Participants Through the Portal
Director Moloney described the Division’s efforts to solicit focused, practical input from market participants through a public portal. He urged stakeholders to keep submissions short and to identify what companies, investors, and other stakeholders think is most important. The Division plans to systematically process comments and propose what can be cut back or curtailed, emphasizing the goal of getting “back to basics.”
Looking Ahead
The second episode of Material Matters reinforces themes that have defined the SEC’s posture since January 2025: a deliberate pivot away from regulation by enforcement, an increased commitment to providing informal guidance, and a pledge to modernize disclosure requirements that have accumulated over decades. Where the inaugural episode focused on the SEC’s pivot toward a principles-based framework for digital assets, this installment turns to the parallel deregulatory and modernization agenda within the Division. As Director Moloney summarized: “We want to facilitate entrepreneurs in coming forth with their ideas to build these business models. Let the free markets be free.”
Now that the SEC appears to be inviting more informal market commentary and signaling a renewed openness to practical staff engagement, it may be more important than ever for market participants to provide concise, timely responses to SEC requests for comment. With the potential for rulemaking to move more quickly and with staff seeking practical input, there is a real opportunity for companies and other stakeholders to help shape regulatory outcomes that reflect current market realities.
