SEC comment letter industry insights and trends
On the Radar: SEC Comment Letter Considerations
This issue of On the Radar contains SEC comment letter considerations, including an update on SEC’s priorities; a summary of comment letter trends related to the top 10 topics of frequent comment; and future SEC disclosure priorities.
Overview on SEC comment letter considerations
The global business landscape continues to evolve at a rapid pace. After years of increasing interest rates and inflation, these trends have begun to moderate. However, other factors such as global trade tensions and the transformative effects of generative artificial intelligence (AI) are dominating headlines and influencing world markets. At the same time, with the change of presidential administration, the SEC is charting a new course for rulemaking and priorities. The SEC’s current regulatory agenda (the “RegFlex Agenda”), which is part of the Spring 2025 Unified Agenda of Regulatory and Deregulatory Actions issued by the Office of Management and Budget’s Office of Information and Regulatory Affairs, provides insights into where the SEC might focus. The agenda’s areas of focus include facilitating capital formation and reducing compliance burden, establishing a comprehensive regulatory framework for crypto assets, and revisiting actions of the prior administration.
To help the SEC meet its responsibilities under the Sarbanes-Oxley Act, the SEC’s Division of Corporation Finance (the “Division”) continues to selectively review documents filed by registrants under the Securities Act of 1933 and the Securities Exchange Act of 1934. Under the Division’s filing review process, the Division performs some level of review of each registrant at least once every three years and may issue comments to such registrants.
The analysis herein summarizes the comments the Division issued during its reviews of periodic filings of public companies.
Top 10 topics in reviews
The table below summarizes comment letter trends by topic in the 12-month period ended July 31, 2025 (“review year 2025” or the “current year”).
The topics that constitute the current year’s top 10 list are largely consistent with the prior year’s list. However, the topics of debt, EPS, and signatures, exhibits, and agreements have joined the top 10 list, while the topics of income taxes (ranked 15th in the current year), internal control over financial reporting (ranked 11th in the current year), and fair value (ranked 13th in the current year) have dropped out of the top 10. The volume of reviews with a comment on MD&A as a percentage of all reviews with comment letters has continued to increase, whereas the volume of reviews with a comment on non-GAAP measures as a percentage of all reviews with comment letters decreased slightly. These two topics are still the two most significant sources of SEC comments by a wide margin since the SEC staff remains laser-focused on them. Given the SEC staff’s focus on ensuring that disclosures provide decision-useful information from management’s perspective, we expect the volume of comments on MD&A to remain high. While segment reporting remained in 3rd place, the volume of reviews with a comment on this topic increased from 16 percent of all reviews with comment letters to 23 percent of all such reviews, with the increase largely attributable to the staff’s comments on the implementation of the new disclosures required by ASU 2023-07, including significant segment expense disclosures. We also observed an increased number of comments related to signatures, exhibits, and agreements, which rose from 16th place in review year 2024 to 7th place in review year 2025 because of an increase in comments related to potentially missing or incorrect exhibits and certifications. In addition, both debt and EPS moved up into the top 10 list this year, indicating an increase in SEC comments related to the accounting for and disclosure of financial instruments.
A number of the aforementioned trends are likely to continue in years to come since comment letter topics have been largely consistent year over year. While it is difficult to predict what new comment letter trends are on the horizon, the SEC staff has historically focused on emerging issues such as macroeconomic issues as well as new accounting standards and regulations. Accordingly, we might expect a focus on AI and global trade issues as well as new income tax disclosures that go into effect this year. It remains to be seen how the recent change in SEC leadership and the corresponding changes in the SEC’s priorities will affect the Division’s filing reviews and resulting comment letters, if at all.
Long-term review trends
The charts below show, for each of the review years 2021 through 2025, (1) the number of reviews with comment letters and (2) the total number of SEC comment letters issued.
As the charts above illustrate, while there was a notable increase in the number of reviews with comment letters and the number of comment letters issued on Forms 10-K and 10-Q from the beginning of review year 2021 through the end of review year 2023, the trend started to reverse in review year 2024, with a decrease in (1) review year 2024 (8 percent year-over-year decrease in both the number of reviews with comment letters and the number of comment letters issued) and (2) review year 2025 (11 percent year-over-year decrease in the number of reviews with comment letters, 10 percent year-over-year decrease in the number of comment letters issued). This overall trend is most likely attributable to capital markets activity. Throughout calendar years 2020 and 2021, the volume of traditional initial public offerings (IPOs) and special-purpose acquisition company (SPAC) transactions reached record levels, with more than 800 companies going public during this time frame. During that period, SEC staff most likely focused on registration statements for IPOs and SPAC transactions and reduced discretionary reviews of annual reports. In 2022, the capital markets slowed, but the earlier activity led to an increase in the number of Forms 10-K filed by public companies, which are subject to recurring SEC staff review. With more public companies subject to review and lower levels of capital markets activity, we saw elevated levels of comment letters in review years 2023 and 2024, although the number of comment letters declined in review year 2024 from its peak in review year 2023. In review year 2025, we observed a more significant year-over-year decrease that is most likely attributable to increased capital markets activity as well as to ongoing changes to staffing levels at the SEC (similar to changes in staffing levels at other federal agencies). We believe that this reversal may continue into next year and that we may see further changes as the new director of the Division establishes the Division’s priorities for the disclosure review program.
Although the number of reviews with comment letters remains elevated, the vast majority of reviews conducted by the SEC staff do not result in a comment letter. For example, in the SEC’s fiscal year ended September 30, 2024, the SEC staff reviewed approximately 3,400 companies as part of the annual review process. However, only about a quarter of the reviews of those companies resulted in a comment letter.
Priorities on the horizon
Broader SEC priorities often influence comment letter trends. As registrants start to prepare for the 2025 annual reporting cycle, they may find it helpful to consider the following SEC priorities:
Continue your SEC comment letter considerations learning
For a comprehensive discussion of comment letter trends affecting SEC filers, see Deloitte’s Roadmap SEC Comment Letter Considerations, Including Industry Insights.
Endnotes
1 A SPAC is a newly formed company that raises cash in an initial public offering (IPO) and uses that cash, the equity of the SPAC, or both to fund the acquisition of a private operating company.
2 The number of reviews with comment letters in review year 2024 may be subject to change as more comment letters from review year 2024 are posted to EDGAR.
John Wilde
