U.S. Reps. Bill Huizenga (R-MI) and Andy Barr (R-KY) on June 15 introduced legislation that would amend securities law to require that when issuers disclose information to the Securities and Exchange Commission (SEC) that such information only be material to an issuer’s voting or investment decisions.
“The desire to massively expand the authority, scope, and reach of the Securities and Exchange Commission under Gary Gensler is unacceptable,” Rep. Huizenga 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.”
Rep. Huizenga sponsored the Mandatory Materiality Requirement Act, H.R. 4168, with lead original cosponsor Rep. Barr to amend both the Securities Act of 1933 and the Securities Exchange Act of 1934 by inserting the new statutory language into both acts, according to a bill summary provided by the lawmakers. Companion legislation has been introduced by U.S. Sen. Mike Rounds (R-SD) in his chamber.
Rep. Barr pointed out that the foundation of America’s capital markets lies in the materiality standard driven by investors, and the SEC’s proposed rule on climate-related disclosure imposes unnecessary obligations on companies and small businesses that could unfairly restrict energy companies’ access to capital.
“As an original cosponsor of the Mandatory Materiality Requirement Act in the House, I take pride in upholding the SEC’s statutory mandate,” said Rep. Barr. “I commend Rep. Huizenga and Sen. Rounds for their leadership in opposing the inclusion of partisan climate policy in our financial markets and institutions.”
“The SEC has a long, established history of using the materiality standard when proposing new disclosure requirements, and it should not deviate from it,” said Rep. Huizenga. “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.”