As White House Seeks To Reduce Regulatory Burden, MSCI Members Asked To Submit Comments As SEC Reconsiders Conflict Minerals Rule
Last Tuesday, U.S. Securities and Exchange Commission Acting Chairman Michael S. Piwowar announced that he has directed Commission staff to reconsider its regulation governing the sourcing of conflict minerals, and also invited the public to comment on the efficacy of this rule.
Calling the regulation “misguided,” Piwowar explained, “The disclosure requirements have caused a de facto boycott of minerals from portions of Africa, with effects far beyond the Congo-adjacent region.” He also said, “Legitimate mining operators are facing such onerous costs to comply with the rule that they are being put out of business” and argued that it is “unclear that the rule has in fact resulted in any reduction in the power and control of armed gangs or eased the human suffering of many innocent men, women, and children in the Congo and surrounding areas.”
Piwowar noted that “since May 2014, the Commission has partially stayed compliance with the rule, after the U.S. Court of Appeals for the D.C. Circuit found that the rule violated the First Amendment. This partial stay has done little to stem the tide of unintended consequences washing over the Democratic Republic of the Congo and surrounding areas.”
The Metals Service Center Institute strongly opposes the SEC’s conflict minerals regulation and urges its members to contact either the SEC or MSCI to register their comments. The general public can submit comments directly to the SEC using this link. Comments are due on Thursday, March 16.
While the United States is considering rolling back its rule, on January 24 the European Parliament’s Committee on International Trade (INTA) approved the EU’s final conflict minerals regulation. A summary of that regulation can be found here.
The SEC’s announcement came one day after President Donald Trump issued an executive order calling for a general reduction in federal regulations and regulatory costs. President Trump’s order establishes the framework for the President’s “one in-two out” regulatory proposal, which says that, “for every one new regulation issued, at least two prior regulations [must] be identified for elimination.” It also says that “the cost of planned regulations be prudently managed and controlled through a budgeting process.” The order states that for fiscal year 2017 (the current fiscal year) the total incremental cost of all new regulations, including those repealed, shall be no greater than zero, unless required by law or consistent with advice provided by the director of the Office of Management and Budget (OMB). Additionally, the OMB director is directed to issue regulatory cost caps for each agency for each year starting with fiscal year 2018.
MSCI supports efforts to reduce the regulatory burden on manufacturers, the metals supply chain, and consumers. Click here to read the organization’s agenda for regulatory reform.