Letter from six senators challenges authority of Acting SEC Chair on conflict minerals no-action position

by Cydney Posner

It’s not only the NGOs that have expressed their dismay at the no-action position taken by Corp Fin and Acting SEC Chair Michael Piwowar with regard to compliance by companies with the conflict minerals rule. In this April 26 letter, six U.S. Senators express their doubt about the “legal basis” for the Acting Chair’s “unilateral move” to halt enforcement of the rule. Continue reading

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GAO issues annual report showing only slight progress in disclosures on conflict minerals

by Cydney Posner

The GAO has recently issued its third annual report on conflict minerals. The GAO is required by Dodd-Frank to report annually on the effectiveness of the SEC’s conflict minerals rule in promoting peace and security in the DRC and adjoining countries  (the “covered countries”) as well as on the rate of sexual violence in war-torn areas of the covered countries. (To read about last year’s report, see this PubCo post.) One sentence in the report says it all: “Our review of companies’ conflict minerals disclosures filed with SEC in 2016 found that, in general, they were similar to disclosures filed in prior years.” In light of the provision in the Financial CHOICE Act of 2017 that would repeal the Dodd-Frank conflict minerals mandate, you have to wonder if this will be the GAO’s last report on the topic?  (See this PubCo post.) Continue reading

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It’s baaaack — the Financial CHOICE Act of 2017

by Cydney Posner

A draft of the Financial CHOICE Act of 2017 (fka version 2.0), a bill to create hope and opportunity for investors, consumers, and entrepreneurs — a masterpiece of acronyming — has just been released (and weighs in at 593 pages).   The bill, sponsored by Jeb Hensarling, Chair of the House Financial Services Committee, was framed as a Republican proposal to reform the financial regulatory system and relieve the affliction of Dodd-Frank. In addition to taking aim at much of Dodd-Frank, among other things, the bill places a heavier burden on regulators and proxy advisory firms generally, eliminates a lot of studies and repeals or eases a number of regulations. A hearing in the House has been scheduled for this week. The bill never made much progress when it was originally introduced last year (as version 1.0), but with Congress and the Presidency now in Republican hands, its chances of survival in some form are immensely greater.  Of course, the Senate Dems could filibuster — assuming, that is, that the legislative filibuster survives that long — the Senate version of the bill, or threaten to do so, which could lead to some negotiation.

While the vast majority of provisions in the draft bill relate to the banking provisions of Dodd-Frank and the Consumer Financial Protection Bureau, some are related to new requirements for agency rulemaking, capital formation, compensation and corporate governance matters, and other matters of interest. Selected provisions are summarized below: Continue reading

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Shareholder proposal process in the crosshairs

by Cydney Posner

According to this report in Bloomberg BNA,  the plans for changing the shareholder proposal process in the Financial CHOICE Act 2.0 are quite dramatic and could effectively curtail the process, if that is, the current version of the provision ever makes it into law.   Continue reading

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Senate hearing on conflict minerals law reveals common theme

by Cydney Posner

On April 5, just prior to the release of  Corp Fin’s Updated Statement on conflict minerals, the Senate Subcommittee on Africa and Global Health Policy held a hearing on the effects on the Democratic Republic of the Congo of Section 1502 of Dodd-Frank and the SEC’s related conflict minerals rule, examining the approach taken in the rule and its achievements.  The hearing comes as Congress considers whether and how to revise Section 1502.  While the witnesses were divided in their views of the value of Section 1502, surprisingly, there was something of a common theme — that the illicit trade in conflict minerals is more a symptom of the problem in the DRC region, not at the root, and that addressing the trade issue alone will not suffice.  Continue reading

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Responses to Corp Fin’s Updated Statement on Conflict Minerals

by Cydney Posner

A number of NGOs have issued statements emphatically rejecting Corp Fin’s  Updated Statement on the Effect of the Court of Appeals Decision on the Conflict Minerals Rule and the Acting Chair’s separate Statement on conflict minerals (see this PubCo post) and calling for companies to disregard them and file their conflict minerals reports as usual. How will companies respond? Continue reading

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