As of now, Forms SD and conflict minerals reports are still due on May 31, 2017. With all the discussion, in light of the election results, of rolling back legislation and regulations, through the Financial CHOICE Act and otherwise (see this PubCo post), many are wondering whether they should still plan to file those reports. While there’s no way to be certain, our assessment at this point is that they should.
As you may recall, the Financial CHOICE Act, sponsored by Jeb Hensarling, Chair of the House Financial Services Committee, was framed as a Republican proposal to reform the financial regulatory system necessary to undo the burdens of Dodd-Frank, which were characterized as a distraction from the SEC’s basic statutory responsibilities. The bill took aim at much of Dodd-Frank, including repealing the conflict minerals provision. In an interview with the WSJ on November 11, Hensarling said “that he planned to make the bill… his top priority next year.” Nevertheless, although the bill passed the House this term, it would need to be re-introduced next term. Moreover, no version of the bill was ever introduced in the Senate. To the extent that a Senate version differs substantially from the House version, those differences would need to be resolved in conference committee. And given that there will be only 52 Republican votes in the new Senate, a Senate version of the bill may need to defer to some Dem demands to avoid a filibuster — assuming that a filibuster can be avoided at all.
SideBar: A filibuster could be avoided through the reconciliation process, but to have recourse to that process, the Republicans would need to show that the budgetary impact would be more than incidental. The Affordable Care Act was ultimately passed through reconciliation.
If the bill does pass both houses of Congress, presumably, based on prior statements, the new President would be happy to sign it. And then, the SEC would need to suspend or eliminate the regulations.
Of course, it’s certainly possible that, if the process were expedited, it could all be accomplished before the filing due date. However, after taking into account the volume of other high-priority projects slated to be on the new Congress’s near-term legislative agenda — including the 2017 budget, appropriations bills and repeal of the ACA — our Government Analytics Practice Group thinks that it’s unlikely that the conflict minerals rules would be eliminated prior to the due date. Of course, we will keep you posted.