Just when we thought the SEC’s job is to regulate markets and protect investors, we’ve learned it’s all about, ahem, foreign policy.
At least that’s the message in yesterday’s SEC release concerning proposed new rules under Dodd-Frank about the use of conflict minerals from the Democratic Republic of the Congo and adjoining countries.
The SEC said:
Specifically, companies would be required to disclose annually whether they use “conflict minerals” that are “necessary to the functionality or production” of a product that they either manufacture or contract to be manufactured that originate from the Democratic Republic of the Congo or adjoining countries. The conflict minerals are cassiterite, columbite-tantalite, gold, wolframite or their derivatives. These minerals are essential to many products — from jewelry to cell phones to jet engines.
In adopting this statute, Congress expressed its hope that the reporting requirements of the securities laws will help to curb the violence in the eastern Democratic Republic of the Congo,” said SEC Chairman Mary L. Schapiro. “Because expertise about these events does not reside within the SEC, we have drafted these proposed rules carefully to follow the direction of Congress and look forward to the additional insights and perspective from public comments.
Public comments on the proposed rules — which we think there’ll be plenty of — are supposed to reach the SEC by January 31, 2011.
As the reader who alerted us to yesterday’s release said, “Pretty interesting how far things can expand and how the rules will affect disclosure.” Too true.
Our sympathies are with the victims of corruption everywhere. That’s why we’re glad the United States already outlaws fraud and overseas public bribery — through the FCPA and related statutes. The question here is whether it make any sense to burden issuers and the SEC with Congress’ foreign policy concerns du jour? Somehow we doubt it.
The SEC’s December 15, 2010 release 2010-245 can be viewed here.