Holland Reporter

On June 21, 2023, Congressman Bill Huizenga (R-MI), Chairman of the House Financial Services Oversight and Investigation Subcommittee and Congressman Andy Barr (R-KY), Chairman of the House Financial Services Subcommittee on Financial Institutions and Monetary Policy announced the introduction of the Mandatory Materiality Requirement Act.

The Mandatory Materiality Requirement Act amends both the Securities Act of 1933 and the Securities Exchange Act of 1934 by inserting statutory language directly into both acts saying an “issuer is only required to disclose information in response to disclosure obligation adopted by the Commission to the extent the issuer has determined that such information is important with respect to a voting or investment decision regarding such issuer.” The Mandatory Materiality Requirement Act mirrors legislation that has been introduced in the Senate by Senator Mike Rounds (R-SD).

“The desire to massively expand the authority, scope, and reach of the Securities and Exchange Commission under Gary Gensler is unacceptable,” said Congressman Bill Huizenga (R-MI). “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. The SEC has a long, established history of using the materiality standard when proposing new disclosure requirements and it should not deviate from it. 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.”

"The foundation of our capital markets lies in the materiality standard driven by investors. The proposed rule on climate-related disclosure by the Securities and Exchange Commission imposes unnecessary obligations on companies and small businesses, unfairly restricting energy companies' access to capital and posing a risk to American energy security", said Congressman Andy Barr (R-KY). "As an original cosponsor of the Mandatory Materiality Requirement Act in the House, I take pride in upholding the SEC's statutory mandate. I commend Representative Huizenga and Senator Rounds for their leadership in opposing the inclusion of partisan climate policy in our financial markets and institutions."

Text of the Mandatory Materiality Requirement Act is available here.

Original source can be found here.