The Republican-led Securities and Exchange Commission is moving quickly to revisit contentious rules put in place by the last regime as part of the Dodd-Frank financial reform law.
In the last several days, the acting SEC Chairman, Michael Piwowar, has twice moved to reconsider rules put in place under Dodd-Frank, as the Wall Street regulator begins its work as an agency run by Republicans.
On Monday, acting SEC Chairman Michael Piwowar announced he wanted to explore if “relief is needed” for a Dodd-Frank rule requiring public companies to disclose exactly how much more money their CEOs make than the average worker.
The rule just took effect at the beginning of 2017, after being finalized in 2015. But Piwowar said some companies are facing “unanticipated compliance difficulties,” and has directed his staff to quickly determine “whether additional guidance or relief may be appropriate.”
Piwowar’s request came days after he directed his staff to similarly reconsider another “misguided” Dodd-Frank rule, which required companies to attempt to determine, and disclose, whether any minerals used in their products come from conflict-torn regions of Africa.
In his request, Piwowar said that some areas of Africa are facing an effective boycott of their products, as companies search for minerals in areas not subject to this requirement. Mining companies in the Democratic Republic of Congo, which is the primary focus of such a rule, are being put of business, Piwowar warned.
“It is also 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,” he added.
The conflict minerals rule had been finalized in 2012, but part of it has been put on hold after a 2014 court ruling that found that the rule violated the First Amendment.
Piwowar took the reins at the SEC on Inauguration Day, and the agency is currently drastically understaffed at the top echelons. Of the five commissioner positions at the agency, just two are filled, by Piwowar and Democrat Kara Stein.
President Trump has nominated Jay Clayton, a securities attorney based in New York, to serve as the next SEC chief, but his nomination has yet to garner consideration by the Senate.
But Piwowar’s first steps indicate that Republicans may be aggressive in revisiting many of the rules put in place after the financial crisis and Dodd-Frank was made law.
On Friday, President Trump signed an executive order directing the Treasury Secretary to work with other regulators to comprehensively review Dodd-Frank requirements, and determine what areas may need to be revisited.
But substantial changes to the law will likely require legislative action. And so far, Republicans have indicated that Dodd-Frank changes will likely linger behind other legislative priorities, such as replacing ObamaCare and overhauling the tax code.