WASHINGTON The top Republican at the U.S. Securities and Exchange Commission on Tuesday took the first step toward scaling back the controversial "conflict minerals" rule, which requires companies to trace whether their products contain minerals from a war-torn part of Africa.
In his first major action since becoming acting SEC chair earlier this month, Michael Piwowar announced he has directed agency staff to reconsider how companies should comply with the rule and whether "additional relief" from its requirements is necessary.
Piwowar's action comes just one day after President Donald Trump signed an executive order that aims to slash government regulations.
The White House has said the order does not apply to independent agencies like the SEC. However, independent agencies often try to voluntarily follow the spirit of such orders.
The conflict minerals rule requires manufacturers, from Apple Inc to General Electric Co, to tell investors if their products contain certain minerals from the war-torn Democratic Republic of the Congo.
It is one of several SEC disclosure rules required by the 2010 Dodd-Frank law that Republicans and business groups have long sought to repeal, saying they force companies to furnish politically charged information that is irrelevant to making investment decisions.
Another disclosure rule hated by many companies that was also in Dodd-Frank is the "resource extraction" rule, which forces oil and gas companies to disclose payments to foreign governments.
Republicans in the U.S. House of Representatives are slated to vote on a measure to repeal the resource extraction rule on Wednesday.
In that case, Republicans are seeking to repeal it under the Congressional Review Act, which allows Congress to stop recently adopted regulations through a simple majority vote.
The conflict minerals rule cannot be repealed through the Congressional Review Act because the law can only be applied to rules adopted since the end of May.
However, SEC staff can issue interpretive guidance to scale back its requirements or, in a more aggressive move, staff can choose not to enforce it.
Piwowar said the SEC will solicit comments from the public on whether SEC staff should update its guidance on compliance.
The Dodd-Frank law also contains language which would let Trump order the SEC to temporarily suspend the conflict minerals rule for two years if it might harm national security.
Piwowar did not ask the president to take such a step. However, he did raise some national security concerns posed by the rule, and said it has done nothing to help the humanitarian crisis in Africa.
(Reporting by Sarah N. Lynch; Editing by Sandra Maler and Lisa Shumaker)