House Bill to Repeal SEC Conflict Minerals Reporting Requirement Moves Forward

The House Financial Services Committee on Sept. 13 approved a bill that would repeal the requirement for specialized public companies to disclose information about sources and supply chains of conflict minerals to the Securities and Exchange Commission. The Financial CHOICE Act of 2016 now goes to the full House for consideration. In a summary of the bill (here), the committee says federal officials are using securities laws as a “cudgel” to prod companies to address “extraneous” political, social and environmental matters in periodic filings. SEC’s rule, required through the 2011 Dodd-Frank Wall Street Reform and Consumer Protection Act, requires companies to file a Form SD if they manufacture or contract to have manufactured products that contain conflict minerals necessary to the functionality or production of those products and, as applicable, file a conflict minerals report. Firms that report their products as “DRC [Democratic Republic of the Congo] Conflict Free” are also required to include documentation of independent audits in their SEC disclosures.