On January 31, the acting Securities and Exchange Commission Chairman, Michael Piwowar, issued a statement announcing that he directed the staff of the SEC to reconsider the rule on conflict minerals, including the agency’s 2014 guidance on such rule. As discussed in the August 24, 2012 edition of the Corporate & Financial Weekly Digest, the rule on conflict minerals, which was mandated by Section 1502 of the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), implemented disclosure and reporting requirements regarding the use by issuers of conflict minerals from the Democratic Republic of the Congo and adjoining countries. Acting Chairman Piwowar commented that the disclosure requirements led to a de facto boycott of minerals from portions of Africa, as well as prohibitively high costs to legitimate mining operators, forcing them to close their mining operations. Comments on reconsideration of the rule and the 2014 guidance are being solicited for 45 days following the announcement.
The statement by Chairman Piwowar follows recent legislative action calling for review of the resource extraction rule, required by Section 1504 of Dodd-Frank. Specifically, Senator Inhofe and Representative Huizenga filed a joint Congressional Review Act Resolution relating to the SEC’s final rule requiring disclosure of certain payments made by resource extraction issuers. The joint resolution, if passed, would provide for congressional disapproval of the resource extraction rule.
These statements and actions appear to be consistent with President Trump’s focus on “cutting regulations massively for small business and for large business,” as reflected in the Executive Order he signed on January 30, directing that for every new federal regulation adopted, an executive department or agency must identify two existing regulations to eliminate. It should be noted, however, that this Executive Order does not apply to the SEC and other independent regulatory agencies.
The press release on President Trump’s Executive Order is available here.
The SEC’s statement on conflict minerals is available here.
More information on the joint resolution is available here.