The National Association of Manufacturers (NAM) is pleased that the House will soon be voting on H.J. Res. 41, a resolution providing for congressional disapproval under the Congressional Review Act of a Securities and Exchange Commission (SEC) rule relating to the disclosure of payments by resource extraction issuers (the Section 1504 rule). The existing SEC extraction issuers rule, as finalized, subjects manufacturers to reporting requirements that are overly burdensome and is an impediment to manufacturing growth in the global economy.
The disclosures that public companies must file with the SEC are lengthy and burdensome, often overwhelming both issuers and their shareholders. In many cases, required disclosures are confusing and duplicative as well as extremely costly for public companies to comply. For example, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act) added numerous additional disclosure requirements that add to the reporting burden for public companies without producing a comparable benefit for shareholders.
Section 1504 of the Dodd-Frank Act requires resource extraction issuers to disclose public payments made to the U.S. federal government or foreign governments for the commercial development of oil, natural gas or minerals. The SEC finalized its Section 1504 rule on June 27, 2016. Unfortunately, this rule adds hundreds of millions of dollars to manufacturers’ compliance and reporting costs at a time when the regulatory burden is already significant. Furthermore, since the rule only applies to companies listed with the SEC, it creates an uneven playing field and a potential competitive advantage for companies that do not have to file such reports with the SEC.
By supporting H.J. Res. 41 to disapprove of the Section 1504 rule, Congress will be taking a step toward eliminating unnecessary and unworkable reporting and disclosure requirements. The NAM looks forward to working with Congress and the SEC on alternative plans to promote transparency without adding to manufacturers’ cost burden or hindering growth.
Before joining the NAM, Crooks served as senior manager of government affairs for Financial Executives International, where she advocated on behalf of the association’s membership of senior-level business executives on tax, corporate treasury, pension and benefit issues. Previously, she worked as a legislative assistant to Rep. Michael Castle (R-DE), a senior member of the House Committee on Financial Services. Christina handled financial services issues for the Congressman during consideration of the Dodd-Frank Act, and also worked on small business and judiciary issues. Christina earned a B.A. in Political Science from the University of Delaware and a M.A. in Political Science from American University.
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