U.S. Senator Katie Britt (R-Alabama) joined Sen. Mike Rounds (R-South Dakota) and eight of their Senate colleagues in reintroducing legislation to only allow the U.S. Securities and Exchange Commission (SEC) to impose future disclosure requirements on publicly traded companies if the information is important for investors’ decisions.
“If this Administration continues to try and enforce its radical Green New Deal policies on every corner of America, this reckless, partisan overreach is going to result in fewer American jobs, higher inflation, and more competitive advantages for foreign competitors in the marketplace,” said Sen. Britt. “American companies should not be held hostage by unelected bureaucrats. I’m proud to support this commonsense legislation that would uphold fiscal sanity and free-market values in our economy.”
“The heavy hand of government is hampering the growth of our businesses and economy,” said Sen. Rounds. “This legislation would seek to depoliticize the SEC by preventing the agency from requiring reporting of unnecessary information and instead focus on protecting investors, maintaining fair and efficient markets and facilitating capital formation.”
In March 2022, the SEC issued a rule requiring any public company to disclose its direct and indirect greenhouse gas emissions, including reporting by downstream suppliers like farmers and ranchers, even if that information is not relevant to investors. This rule would potentially limit access to capital, discourage new companies from going public and result in onerous reporting requirements that will be borne by farmers and small businesses.
The Mandatory Materiality Requirement Act would refocus future SEC disclosure requirements on what is important: the information investors need to make smart investment decisions. Specifically, it would amend both the Securities Act of 1933 and the Securities Exchange Act of 1934 by inserting statutory language directly into both acts saying an “issuer is only required to disclose information in response to disclosure obligation adopted by the Commission to the extent the issuer has determined that such information is important with respect to a voting or investment decision regarding such issuer.”
Sens. Britt and Rounds were joined by Sens. Thom Tillis (R-North Carolina), Bill Hagerty (R-Tennessee), Cynthia Lummis (R-Wyoming), Steve Daines (R-Montana), Chuck Grassley (R-Iowa), John Boozman (R-Arkansas), Kevin Cramer (R-North Dakota), and Dan Sullivan (R-Alaska) in introducing this legislation.
SEC chair Gary Gensler advanced the SEC rule. Gensler has advocated for the SEC to consider climate-related and social issues in its regulatory policy since he took office in 2021. Gensler said climate reporting rules are a concern for investors and fit in with a tradition of disclosure requirements dating back to the Great Depression.
Katie Britt was elected to the Senate in 2022.
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