Is the SEC regulating for a pre-AI world? asks the CFA Institute’s Sandy Peters.

That’s in an excellent recent article on cfo.com. Here are some extracts:

• 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”.
• …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.
• …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.

The article provides ample evidence of Atkins’ penchant for sloganeering and lack of intellectual rigour:

• 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. 

As we covered here, Atkins has also been taking shots at the IFRS Foundation, grandiosely suggesting that the existence of the ISSB may dilute the focus on promoting “high-quality accounting standards that are focused solely on driving reliable financial reporting and are not used as a backdoor to achieve political or social agendas,” and basically dismissing the ISSB’s entire agenda as consisting of “specious and speculative issues.” That’s while, if we’re talking about specious and speculative, and returning to the SEC’s capacity to engage with new technologies, leading a near-gutting of SEC oversight over crypto-related issues. So the failure to grapple with the implications of AI is hardly surprising.

In fairness though, the SEC is hardly alone. Canadian regulators often still talk as if investment decisions were conducted largely on the basis of paper documents received in the mail. And as for the IFRS Foundation, well, as I put it here: “for all the merits of the new IFRS 18, you may feel like exclaiming (to adapt a common form of SNL punchline) that 2005 just called and wants its big new idea back (and that’s even if it were effective now, rather than in a couple of years’ time). Set against the sensational volatility of capital markets, the fierce competition for returns and the demographic and environmental and geopolitical and myriad other pressures that work against actually finding them, and the advent of technologies that tear through information and convention like bulldozers in a forest, fussing over the exact construction of a highly-summarized, already several-month-old financial summary may soon come to seem like a barely relevant exercise at best, a delusional one at worst…” We recently covered yet another initiative premised on the supposed importance of certain information being contained in one document rather than another. But of course, financial reporting is hardly the main area in which a failure to grapple with the possibilities of AI might one day (not far from now) prove to be costly…

The opinions expressed are solely those of the author.