Huizenga, Barr Introduce Materiality Bill to Rein in SEC Rulemaking, Promote Capital Investment & Economic Growth
Washington, December 2, 2022
Today, Congressman Bill Huizenga (R-MI), Ranking Member of the Investor Protection, Entrepreneurship, and Capital Markets Subcommittee and Congressman Andy Barr (R-KY), Ranking Member of Subcommittee on National Security, International Development, and Monetary Policy introduced the Mandatory Materiality Requirement Act of 2022.
The Mandatory Materiality Requirement Act of 2022 would amend both the Securities Act of 1933 and the Securities Exchange Act of 1934 by inserting statutory language directly into both acts to require that when imposing a disclosure obligation, the SEC must determine that “there is a substantial likelihood that a reasonable investor of the issuer would consider the information disclosed to the Commission under the requirement to be important with respect to an investment decision regarding the issuer.” The Mandatory Materiality Requirement Act of 2022 mirrors legislation that has been introduced in the Senate by Senator Mike Rounds (R-SD).
“American job creators are under constant assault from the heavy-handed regulatory approach of the Securities and Exchange Commission (SEC) under Gary Gensler,” said Congressman Bill Huizenga (R-MI), the lead Republican on the House Financial Services Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets. “Nowhere is this more evident than the SEC’s clear desire to massively expand disclosure requirements. Such an expansion would not only damage our economy, it would negatively impact small businesses and make it more difficult for 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 continue to do so. 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 materiality standard is the investor-driven backbone of our capital markets. Immaterial reporting requirements like those outlined in the Securities and Exchange Commission’s climate-related disclosure proposed rule place an undue burden on companies and small business, discriminatorily choke off energy companies’ access to capital, and threaten American energy security,” said Congressman Andy Barr (R-KY), the lead Republican on the House Financial Services Subcommittee on National Security, Monetary Policy, and International Development. “I am proud to be an original cosponsor of the Mandatory Materiality Requirement Act in the House to ensure that the SEC is sticking to its statutory mandate and commend Representative Huizenga and Senator Rounds for helping to lead the charge against woke climate policy in our financial markets and institutions.”