On November 15, 2017, the House Financial Services Committee (the "Committee") approved two pieces of legislation that would repeal the conflict minerals and mine safety and health disclosure requirements promulgated under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"):
- H.R. 42481 would amend the Securities Exchange Act of 1934 (the "Exchange Act") to repeal Section 13(p), which directed the Securities and Exchange Commission ("SEC") to adopt its conflict minerals disclosure rules and related certification and audit requirements.2
- H.R. 42893 would repeal Section 1503 of the Dodd-Frank Act, which requires detailed disclosures about mine safety and health in quarterly and annual reports filed with the SEC.4
The conflict minerals rule has faced numerous legal challenges over the years and, after a final judgment by the U.S. District Court that certain aspects of the requirements violate the First Amendment of the U.S. Constitution, the SEC is now charged with resolving open issues concerning implementation of the rule. Recently, the conflict minerals rule has faced additional scrutiny from the SEC, which has indicated that, until regulatory uncertainties are resolved, it would not recommend enforcement action for failure to comply with certain of the rule’s audit and disclosure requirements. While companies subject to the conflict minerals and the mine safety disclosure rules are eager for additional clarity, the passage of these bills should not impact companies’ current compliance plans, as even if the bills are passed, there is no guarantee that they will be enacted into law in the short term or at all.
1 Available here.
2 For additional information on the conflict minerals rules, see our prior alerts, available at Conflict Minerals Update - SEC Releases Guidance Following District Court Decision, SEC Issues Guidance Confirming that the Conflict Minerals Rules Remain (Largely) Unchanged, DC Circuit Court of Appeals Upholds Conflict Minerals Disclosure Rules, But Strikes Down Requirement That Companies Label Their Products, US District Court Upholds SEC Conflict Minerals Disclosure Rules, SEC Issues Guidance on Conflict Minerals Rule and SEC Adopts Conflict Minerals Rules and Resource Extraction Payments Rules.
3 Available here.
4 For additional information on the mine safety reporting requirements, see our prior alert, available at SEC Adopts Final Rules on Mine Safety Reporting Requirements
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