Acting SEC chair seeks to scale back ‘conflict minerals’ rule

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By Sarah N. Lynch | WASHINGTON

WASHINGTON The top Republican at the U.S.
Securities and Exchange Commission on Tuesday took the first
step toward scaling back the controversial “conflict minerals”
rule, which requires companies to trace whether their products
contain minerals from a war-torn part of Africa.

In his first major action since becoming acting SEC chair
earlier this month, Michael Piwowar announced he has directed
agency staff to reconsider how companies should comply with the
rule and whether “additional relief” from its requirements is
necessary.

Piwowar’s action comes just one day after President Donald
Trump signed an executive order that aims to slash government
regulations.

The White House has said the order does not apply to
independent agencies like the SEC. However, independent agencies
often try to voluntarily follow the spirit of such orders.

The conflict minerals rule requires manufacturers, from
Apple Inc to General Electric Co, to tell
investors if their products contain certain minerals from the
war-torn Democratic Republic of the Congo.

It is one of several SEC disclosure rules required by the
2010 Dodd-Frank law that Republicans and business groups have
long sought to repeal, saying they force companies to furnish
politically charged information that is irrelevant to making
investment decisions.

Another disclosure rule hated by many companies that was
also in Dodd-Frank is the “resource extraction” rule, which
forces oil and gas companies to disclose payments to foreign
governments.

Republicans in the U.S. House of Representatives are slated
to vote on a measure to repeal the resource extraction rule on
Wednesday.

In that case, Republicans are seeking to repeal it under the Congressional Review Act, which allows Congress to stop
recently adopted regulations through a simple majority vote.

The conflict minerals rule cannot be repealed through the
Congressional Review Act because the law can only be applied to
rules adopted since the end of May.

However, SEC staff can issue interpretive guidance to scale
back its requirements or, in a more aggressive move, staff can
choose not to enforce it.

Piwowar said the SEC will solicit comments from the public
on whether SEC staff should update its guidance on compliance.

The Dodd-Frank law also contains language which would let
Trump order the SEC to temporarily suspend the conflict minerals
rule for two years if it might harm national security.

Piwowar did not ask the president to take such a step.
However, he did raise some national security concerns posed by
the rule, and said it has done nothing to help the humanitarian
crisis in Africa.



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