SEC comment letters trends in three charts: fewer releases and longer delays
What the data shows about oversight shifts and why dissemination lags matter for investors.
In August 2025, the SEC’s Office of Inspector General (OIG) released a report on the Division of Corporation Finance’s Disclosure Review Program (DRP), which oversees reviews of public company filings. While the report acknowledged that the DRP continues to meet statutory oversight requirements, it highlighted vulnerabilities tied to staffing levels. With the program operating at under 300 employees and experiencing roughly 10% attrition, the OIG warned that reduced headcount poses risks to retaining institutional knowledge and to the program’s ability to keep pace with emerging disclosure issues, such as crypto assets and increased nonpublic company registration submissions.
Comment letters are important to investors because they flag disclosure deficiencies that are material to understanding a company’s business trends and accounting practices, and making an informed investment decision. According to the report, materiality to investors is the key determination in the decision to issue comments following the review:
“When deciding whether to issue a comment letter, DRP staff assess whether additional information or clarification would (1) be material to understanding the company’s circumstances, and (2) have a material impact on an investment decision. When staff determine that a company’s registration or offering statement is materially noncompliant, they may defer further review and issue a “significant deficiencies letter.”
The OIG report is forward-looking, warning that lower staffing levels in the Division of Corporation Finance’s Disclosure Review Program could impair its ability to sustain effective oversight. At the same time, the data on SEC comment activity shows a notable shift that may or may not be linked to those staffing pressures.
Specifically, the number of comment letters with the closing letters publicly released on EDGAR between January and August 2025 fell sharply compared to prior years. Closing letters are generally issued following the completion of 10-K and 20-F reviews. However, reviews of proxy filings, such as Form DEF14A, also receive a closing letter confirming that the SEC has no further comments.
Figure 1 – SEC Comment Letters Released on EDGAR between January and August, 2023-2025
Data Source: Audit Analytics SEC comment letters database, analysis by Deep Quarry.
Earlier this year, I cautioned that the sharp drop in SEC reviews observed in early 2025 could foreshadow an even steeper full-year decline.
The warning turned out to be predictive: the drop in the number of conversations released was especially prominent in May and June, with 19 and 2 conversations released, respectively. Although activity picked up again in August, such a sharp decline is unusual.
The decline in the number of SEC comment letters released could reflect fewer reviews being performed, a similar level of reviews but fewer issues deemed material enough to warrant comments, or simply delays in the public release of letters on EDGAR.
It is difficult to attribute the decline in released comment letters to a specific cause because both the total number of reviews conducted and the SEC staff’s materiality judgments about whether to issue comments are unobservable.
What is observable, however, are delays in making completed reviews public through EDGAR. SEC guidance suggests that comment letters should be released about 20 business days after a review is completed, which translates to roughly 30 calendar days on average. The delay can be measured by constructing a dissemination lag metric, defined as the number of days between the closing letter and the date the comment letters are posted.
The chart below reflects the average dissemination lag of the closing letters publicly released on EDGAR between January and August of 2023, 2024, and 2025.
Figure 2 - Dissemination Lag of Closing Letters Released on EDGAR between January and August 2023-2025
Data Source: Audit Analytics SEC Comment Letters Database, analysis by Deep Quarry.
Except for March 2023, when the average dissemination lag for the letters released during the month spiked to 59 days, the dissemination time in 2023 and 2024 remained firmly in the 30-day ballpark. The uptick in March 2023 appears to be attributed to a cluster of SEC reviews of proxy DEF14 filings, which requested information on the company's board's leadership structure and the board’s role in administering risk oversight function (examples of comments issued to NVIDIA and Verizon are available here and here). If we include only 10-K and 20-F letters, the average dissemination lag would be around 33 days - that is, the spike would disappear.
However, we see a sharp increase in the dissemination lag in the spring and summer of 2025, from 28 days in April 2025 to 100 days in August 2025. Put it differently: the letters that were released in August would generally be expected to be posted on EDGAR in June, mitigating the sharp drop we observed in Figure 1.
Looking at the average numbers may introduce noise in small samples because a handful of outliers could drive the results. To address this concern, I examined a percentage of SEC reviews that were released late.
Based on my analysis, all but two reviews released on EDGAR in June, July, and August 2025 had a dissemination lag of more than 40 days. For comparison, only two SEC reviews released between June and August of 2024 were released with a lag of more than 40 days. Thus, the data suggests that the 2025 delay in the expected timing of releasing the SEC comments to the general public is driven by a change in the release practices and not by a small number of hiccups in the dissemination process.
Notably, in 2012, the SEC shortened the expected release time of the comment letters from 45 to 20 days, citing transparency considerations:
“Since the inception of the program, the stated goal has been to release the correspondence "no earlier than 45 days after the review of the disclosure filing is complete." To further enhance the transparency of the filing review process, beginning January 1, 2012, the staff will release filing review correspondence no earlier than 20 business days following the completion of a filing review.”
The extreme dissemination lag seen in 2025—stretching to 100 days in August—undermines the very transparency the SEC sought to enhance when it reduced the release window from 45 days to 20 business days back in 2012. By delaying the posting of comment letters far beyond the expected 30-calendar-day benchmark, investors are left with less timely access to information that can highlight material disclosure issues and affect investment decisions.
The skewness of the dissemination process is especially apparent in the sample of SEC comments on the IPO filings. In contrast to 10-Ks and 20-Fs that are required to be reviewed at least once every three years, the SEC generally examines all initial public offerings, and comments are issued in most, if not all, reviews of the S-1 prospectuses. As far as I understand, IPO comment letters are generally released on EDGAR about 30 days after the IPO date.
Academic research finds that SEC comment letters on IPO filings – especially revenue recognition comments - are incrementally informative, and this information is not fully priced in at the time of the IPO. From Lowry, Michaely, and Volkova, 2020, “Information Revelation Through Regulatory Process: Interactions Between the SEC and Companies Ahead of the IPO”, Review of Financial Studies (the quote is from the SSRN version of the paper):
“Our findings indicate that while the market incorporates the information embedded in most topics of SEC concerns, concerns related to revenue recognition represent a notable exception. More extensive concerns on this topic are associated with significantly lower abnormal returns in the days surrounding release of the SEC letters, an effect that is concentrated among companies with greater investor downloads of these letters.”
I obtained a sample of 61 IPOs filed between January and August 2025 using an S-1 prospectus. For 44 of those IPOs, the comment letters were already available on EDGAR, and for 15 of them – or about 30% - the comment letters were released with a dissemination lag of more than 40 days. Of the 17 IPOs for which comment letters are not yet available, in 7 instances – or approximately 40% - the IPO date was more than 40 days ago, suggesting that these comment letters are likely to be released late. Overall, at least 36% of the S-1 comment letter threads (22 out of 61) for the January – August 2025 IPOs are likely to be released late.
Figure 3 – SEC IPO Comment Letters Dissemination Lag
Data Source: Audit Analytics IPO dataset, EDGAR, analysis by Deep Quarry.
Examples of delayed dissemination include comment letters for several high-profile IPOs, such as Circle Internet Group, Inc. (Ticker: CRCL) and CoreWeave, Inc. (Ticker: CRWV), released 49 and 48 days after the IPO, respectively. For Chime Financial, Inc. (Ticker: CHYM), which went public on June 12, 2025, the comment letters were not yet available as of September 3, 2025 – more than 80 days after the IPO date.
To summarize, the trends in SEC comment letter activity are nuanced, and the sharp dip observed in May through July 2025 is unlikely to be fully explained by a lower number of Corp Fin reviews. While it is impossible to directly observe the number of reviews conducted or the SEC staff’s materiality judgments in issuing comments, the data on dissemination lags offers an important clue. Comment letters that would normally be expected to appear on EDGAR within about 30 calendar days of a review’s completion were instead being released with delays of 40 days or more. This suggests that at least part of the May–July decline reflects a shift in release practices rather than a collapse in review activity.
The distinction between the reasons behind the decline in the number of reviews released is important. While a longer dissemination lag reduces the timeliness of the incremental information available to investors, the responses to SEC comments are often incorporated into future regular filings such as 10-Ks and 10-Qs, enhancing the information set available to investors. In contrast, a lower number of reviews would suggest a lower general oversight and monitoring activities – that is, fewer accounting errors caught and less extensive disclosure enhancements made.
For questions and data inquiries please contact olga@deepquarry.com.
Disclaimer: This newsletter is intended for educational purposes and does not provide accounting, legal, tax, or investment advice. Please contact your own advisors and do your own research. The views expressed in this newsletter are personal views of the authors based on their interpretation of publicly available information.
Olga, great insightful analysis on the SEC’s Disclosure Review Program. The OIG’s report and your data on 2025 comment letter delays, especially for IPOs like Chime Financial, highlight concerning transparency issues for investors. Seems these delays could signal broader challenges in regulatory oversight.