Treasury Wants to Scrap Conflict Minerals, Other Disclosures

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By Andrea Vittorio

The Treasury Department has called for scrapping corporate reporting requirements on conflict minerals, pay ratios, and other topics that were put in place after the financial crisis.

The department, in an Oct. 6 roadmap for loosening regulation of U.S. markets more broadly, said it’s not relevant to investors whether minerals in companies’ products are fueling conflict in Africa or how top executives’ compensation compares with pay for rank-and-file employees.

“Treasury recognizes that the original support for such provisions was well-intentioned,” its report says. “However, federal securities laws are ill-equipped to achieve such policy goals, and the effort to use securities disclosure to advance policy goals distracts from their purpose of providing effective disclosure to investors.”

Getting rid of the disclosure rules that Treasury singled out, and that business groups including the U.S. Chamber of Commerce have come out against, would require congressional action. Legislation that includes their repeal passed the House earlier this year but is considered dead-on-arrival in the Senate.

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“There must be some pretty powerful lobbyists out there to even make this a focus” of Treasury’s recommendations, Lauren Compere, managing director at Boston Common Asset Management, told Bloomberg BNA. Boston Common is part of a group of investors managing close to $5 trillion in assets that defended conflict minerals reporting after the Trump administration first made moves toward rolling it back.

In the absence of action in Congress, the report suggested that the Securities and Exchange Commission tweak its rules to exempt smaller and certain newly public companies from reporting on these topics. The commission is reviewing how it implements its conflict minerals disclosure rule. It has also issued guidance meant to lessen the legwork for companies reporting pay ratios.

Responsibility for such disclosure could be moved from the SEC to “a more appropriate” agency, the Treasury report said, such as the departments of State, Commerce, or Labor. The State Department has launched its own review of how best to support responsible sourcing of conflict minerals, which are used in products ranging from computer chips to jewelry.

Another disclosure item highlighted in Treasury’s report—an anti-corruption measure for oil, natural gas, and mining companies—has already been rescinded.

SEC Chairman Jay Clayton called the report “a valuable framework for discussion” among market participants “that will most certainly benefit the American people.”

“We appreciate Treasury’s willingness to seek the SEC’s input during the drafting process, and we look forward to working alongside other financial regulators and Congress as we pursue our three part mission to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation,” Clayton said in a statement.

To contact the reporter on this story: Andrea Vittorio in Washington at

To contact the editor responsible for this story: Yin Wilczek at

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