Chamber Calls for `Modernization’ of SEC Disclosure Rules

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By Michael Greene

Corporate representatives and others Jan. 31 asked the Trump administration and the new Congress to overhaul the system under which public companies report to the Securities and Exchange Commission.

From conflict minerals to pay ratio, activists have co-opted the federal securities laws and stretched the SEC to “politicize corporate America at every turn,” Rep. Sean Duffy (R-Wis.) said at a panel sponsored by the U.S. Chamber of Commerce.

Companies also are required to disclose information that isn’t material to reasonable investors, Chamber representatives said. The current regulatory regime may be a factor leading to the decline in the number of U.S.-listed companies, conference speakers said.

Recommendations

At the event, the Chamber released a new report recommending that:

  •  the SEC should steer clear of special interest disclosure
  •  policymakers should avoid mandating disclosures outside the SEC’s expertise
  •  policymakers should be sensitive to lack of investor interest
  •  the SEC should apply rigorous economic analysis before mandating any new disclosures

“The public company disclosure regime is emphatically the wrong means for trying to address geopolitical issues, advancing a particular social policy, or pushing other policy objectives that are extraneous to the SEC’s mission,” the paper said.

It’s not within the SEC’s mission or expertise to solve every real or perceived social or political problem, David Hirschmann, president and chief executive officer of the Chamber’s Center for Capital Markets Competitiveness, said at the event.

In order to have credibility in the eyes of the public, the SEC must maintain its historical status as the independent market regulator that isn’t subject to the whims of whatever administration happens to be in power, he said.

To contact the reporter on this story: Michael Greene in Washington at mGreene@bna.com

To contact the editor responsible for this story: Yin Wilczek at ywilczek@bna.com

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