U.S. Reps. Bill Huizenga (R-MI) and Andy Barr (R-KY) introduction legislation this week in the House that amends the securities laws to put parameters around disclosures.
Their bill, the Mandatory Materiality Requirement Act, amends both the Securities Act of 1933 and the Securities Exchange Act of 1934 by inserting certain statutory language directly into both acts. The amended language says the “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.”
“The desire to massively expand the authority, scope, and reach of the Securities and Exchange Commission under Gary Gensler is unacceptable,” Huizenga, chair of the House Financial Services Oversight and Investigation Subcommittee, said. “This heavy-handed approach to climate-related disclosure will hamper economic growth, create new hurdles for small businesses, and make it more difficult for everyday investors to retire with financial security. The SEC has a long, established history of using the materiality standard when proposing new disclosure requirements and it should not deviate from it. The Mandatory Materiality Requirement Act would codify this standard into law and prohibit the SEC from expanding beyond securities law and the authority granted to it by Congress.”
A similar bill has already been introduced in the Senate by U.S. Sen. Mike Rounds (R-SD).
“The foundation of our capital markets lies in the materiality standard driven by investors. The proposed rule on climate-related disclosure by the Securities and Exchange Commission imposes unnecessary obligations on companies and small businesses, unfairly restricting energy companies’ access to capital and posing a risk to American energy security,” Barr, chair of the House Financial Services Subcommittee on Financial Institutions and Monetary Policy, said. “As an original cosponsor of the Mandatory Materiality Requirement Act in the House, I take pride in upholding the SEC’s statutory mandate. I commend Representative Huizenga and Senator Rounds for their leadership in opposing the inclusion of partisan climate policy in our financial markets and institutions.”