118 HR 4790 IH: GUARDRAIL Act of 2023
U.S. House of Representatives
2023-07-20
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EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.Short title; Table of contents(a)This Act may be cited as the Guiding Uniform and Responsible Disclosure Requirements and Information Limits Act of 2023
or the GUARDRAIL Act of 2023
.(b)The table of contents for this Act is as follows:Sec. 1. Short title; Table of contents.Title I—Mandatory Materiality RequirementSec. 101. Limitation on disclosure requirements.Title II—SEC justification of non-material disclosure mandatesSec. 201. SEC justification of non-material disclosure mandates.Title III—Public Company Advisory CommitteeSec. 301. Public Company Advisory Committee.Title IV—Protecting U.S. Business SovereigntySec. 401. Study on detrimental impact of the Directive on Corporate Sustainability Due Diligence and Corporate Sustainability Reporting Directive.<enum>I</enum><header>Mandatory Materiality Requirement</header><section id="H85EC47D076BA47489471B1C44B92F742"><enum>101.</enum><header>Limitation on disclosure requirements</header><subsection id="HCE997B92462C469D82D9E217FEB1F5F7"><enum>(a)</enum><header>Securities Act of 1933</header><text>Section 2(b) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(b)</external-xref>) is amended—</text><paragraph id="HB020EFCCE875456F90715497A7591A1C"><enum>(1)</enum><text>in the subsection heading, by inserting <quote><header-in-text level="subsection" style="OLC">; Limitation on Disclosure Requirements</header-in-text></quote> after <quote><header-in-text level="subsection" style="OLC">Formation</header-in-text></quote>;</text></paragraph><paragraph id="H638B477DF5A744E6A907F5C8BD4CD255"><enum>(2)</enum><text>by striking <quote>Whenever</quote> and inserting the following:</text><quoted-block id="H7EFAAFD53CC247BC8ABB1EB4352040E1" style="OLC"><paragraph id="H471BB4E1660848A39976357B39F98A47"><enum>(1)</enum><header>In general</header><text>Whenever</text></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph id="H249D3EBC26F54090B8B28C0833D8979A"><enum>(3)</enum><text>by adding at the end the following:</text><quoted-block style="OLC" id="H3025B092A0CF4770933A344891C5A37C" display-inline="no-display-inline"><paragraph id="HBBC2CF2A11BF41F4957471AD21AA026F"><enum>(2)</enum><header>Limitation</header><subparagraph id="HC2B84C447CA147019AA2FF7653E91E43"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Whenever pursuant to this title the Commission is engaged in rulemaking regarding disclosure obligations of issuers, the Commission shall expressly provide that an issuer is only required to disclose information in response to such disclosure obligations to the extent the issuer has determined that such information is material with respect to a voting or investment decision regarding the securities of such issuer.</text></subparagraph><subparagraph id="HB380B703807549B8A1E74005DB789D29"><enum>(B)</enum><header>Applicability</header><text display-inline="yes-display-inline">Subparagraph (A) shall not apply with respect to the removal of any disclosure requirement with respect to an issuer.</text></subparagraph><subparagraph id="H0DCF4864AD444B9AB030ADE9B6DA5E54"><enum>(C)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">For the purposes of this paragraph, information is considered material with respect to a voting or investment decision regarding the securities of an issuer if there is a substantial likelihood that a reasonable investor would view the failure to disclose that information as having significantly altered the total mix of information made available to the investor.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="H81DE97D3D05B42ACB73207AD28EBEB88"><enum>(b)</enum><header>Securities Exchange Act of 1934</header><text>Section 3(f) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(f)</external-xref>) is amended—</text><paragraph id="HAE2D2F6E411E4398944996AE045E9977"><enum>(1)</enum><text>in the subsection heading, by inserting <quote><header-in-text level="subsection" style="OLC">; Limitation on Disclosure Requirements</header-in-text></quote> after <quote><header-in-text level="subsection" style="OLC">Formation</header-in-text></quote>;</text></paragraph><paragraph id="H1ED40A5484C64E099026C598DC35450C"><enum>(2)</enum><text>by striking <quote>Whenever</quote> and inserting the following:</text><quoted-block id="H95FF000A441F4D64AA1DBFD081A7F0A7" style="OLC"><paragraph id="HFFE3C03B6C0C4B189EA2CCF718F09C40"><enum>(1)</enum><header>In general</header><text>Whenever</text></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph id="H70FE43B3BB0A4AF6BB2BC5E0BF5786CA"><enum>(3)</enum><text>by adding at the end the following:</text><quoted-block style="OLC" id="HE210DDFC90494435BE6EB0D8A839A4C6" display-inline="no-display-inline"><paragraph id="H2DB52125013140A09AD85EC0D357DCDE"><enum>(2)</enum><header>Limitation</header><subparagraph id="H4E75DBEC0F7848098A208688974905ED"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Whenever pursuant to this title the Commission is engaged in rulemaking regarding disclosure obligations of issuers, the Commission shall expressly provide that an issuer is only required to disclose information in response to such disclosure obligations to the extent the issuer has determined that such information is material with respect to a voting or investment decision regarding the securities of such issuer.</text></subparagraph><subparagraph id="H265F05423C974F6BB93FA6190650E324"><enum>(B)</enum><header>Applicability</header><text display-inline="yes-display-inline">Subparagraph (A) shall not apply with respect to the removal of any disclosure requirement with respect to an issuer.</text></subparagraph><subparagraph id="H74D7212947E94F0DB34A5DBE867A570A"><enum>(C)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">For the purposes of this paragraph, information is considered material with respect to a voting or investment decision regarding the securities of an issuer if there is a substantial likelihood that a reasonable investor would view the failure to disclose that information as having significantly altered the total mix of information made available to the investor.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section><enum>II</enum><header>SEC justification of non-material disclosure mandates</header><section id="H13A593C6C6A64B3187AA4FE24F2680F9" section-type="subsequent-section"><enum>201.</enum><header>SEC justification of non-material disclosure mandates</header><text display-inline="no-display-inline">Section 23 of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78w">15 U.S.C. 78w</external-xref>) is amended by adding at the end the following:</text><quoted-block style="OLC" id="H1C05D83464E24A3F9723EB0AD8590365" display-inline="no-display-inline"><subsection id="H33481E2130764C3CA63D6CB99D658DB2"><enum>(e)</enum><header>Non-Material disclosure mandates</header><paragraph id="H2FD9B23AD70E4FBC9BB9403A40A78755"><enum>(1)</enum><header>Disclosure</header><text>The Commission shall maintain a list on the website of the Commission that contains—</text><subparagraph id="H3728463ABF9A4A4FAADB3008D1EBA36E"><enum>(A)</enum><text>each mandate under the Federal securities laws and regulations that requires the disclosure of non-material information; and</text></subparagraph><subparagraph id="H477ADC314CAF4033A092359B151404B3"><enum>(B)</enum><text>for each such disclosure mandate, an explanation of why the mandate is required.</text></subparagraph></paragraph><paragraph id="H2E40C38B34D3406E8E0F626DBF2B9EE6"><enum>(2)</enum><header>Study and report</header><text display-inline="yes-display-inline">The Commission shall, every 5 years, issue a report to the Congress justifying each disclosure contained on the list required under paragraph (1).</text></paragraph><paragraph id="H5571BF1EF665491E93EB6CE38C96F9C9"><enum>(3)</enum><header>No private liability for failing to make a non-material disclosure</header><text display-inline="yes-display-inline">A person who fails to disclose non-material information required to be disclosed under the Federal securities laws or regulations shall not be liable for such failure in any private action.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section><enum>III</enum><header>Public Company Advisory Committee</header><section id="HD7F5794F973A449BB0C99FC8DD87E6F8"><enum>301.</enum><header>Public Company Advisory Committee</header><text display-inline="no-display-inline">The Securities Exchange Act of 1934 is amended by inserting after section 40 (<external-xref legal-doc="usc" parsable-cite="usc/15/78qq">15 U.S.C. 78qq</external-xref>) the following: </text><quoted-block style="OLC" id="H9E6930CB07224649A02A73962D5E26B1" display-inline="no-display-inline"><section id="HDBE7618966854F318E6FEE36CE59A3D6"><enum>40A.</enum><header>Public Company Advisory Committee</header><subsection id="HC83322F2719E4B0FAD1E4ABAB9734372"><enum>(a)</enum><header>Establishment and purpose</header><paragraph id="H3A7B991C2A404A63B854B100D4AEC948"><enum>(1)</enum><header>Establishment</header><text>There is established within the Commission the Public Company Advisory Committee (referred to in this section as the ‘Committee’). </text></paragraph><paragraph id="H5674808842E341EEADF1BB4845940481"><enum>(2)</enum><header>Purpose</header><text>The Committee shall—</text><subparagraph id="H932EA07285BB4258AC18E7F04464E9DB"><enum>(A)</enum><text>provide the Commission with advice on its rules, regulations, and policies with regard to its mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation, as they relate to the following:</text><clause id="HDB07EEF0A698418FBF7A6DC52E84CEF5"><enum>(i)</enum><text>“existing and emerging regulatory priorities of the Commission; </text></clause><clause id="HA318BFA7BE3249909A0BFD504FE1DD50"><enum>(ii)</enum><text>issues relating to the public reporting and corporate governance of public companies; </text></clause><clause id="H7BAB59A8C279444FB8548BB0B8F6AF26"><enum>(iii)</enum><text>issues relating to the proxy process for shareholder meetings held by public companies; </text></clause><clause id="HE024FACFB84B4E139A53FB01B5B28B02"><enum>(iv)</enum><text>issues relating to trading in the securities of public companies; and </text></clause><clause id="HA95B3DC2D8F14E2E9352C35F87235A26"><enum>(v)</enum><text>issues relating to capital formation; and </text></clause></subparagraph><subparagraph id="H464FC82241E24F77900F28597B80C45E"><enum>(B)</enum><text>submit to the Commission such findings and recommendations as the Committee determines are appropriate, including recommendations for proposed regulatory and legislative changes.</text></subparagraph></paragraph></subsection><subsection id="H2F9737B8651F4E32B865F1F334850FED"><enum>(b)</enum><header>Membership</header><paragraph id="HAC02A9323482480880F6A2A40DB24E4C"><enum>(1)</enum><header>In general</header><text>The membership of the Committee shall be not fewer than 10, and not more than 20, members appointed by the Commission from among individuals who—</text><subparagraph id="H46F134E27C95440788F7E120754518A1"><enum>(A)</enum><text>are officers, directors, or senior officials of public companies registered with the Commission under the Securities Act or 1933 and this Act, except for those public companies that own asset management, fixed income, investment advisory, broker-dealer, or proxy services businesses;</text></subparagraph><subparagraph id="H4BF8A24A4BC64A0EB5CCE0B99817FBFE"><enum>(B)</enum><text>are executives or other individuals with senior managerial responsibility in business, professional, trade, and industry associations that represent the interests of such public companies; and </text></subparagraph><subparagraph id="H14380FAB5980419495781E0C57C47734"><enum>(C)</enum><text>are professional advisers and service providers to such public companies (including attorneys, accountants, investment bankers, and financial advisers).</text></subparagraph></paragraph><paragraph id="H7EE09450473D47E499D582C233969842"><enum>(2)</enum><header>Qualifications</header><text> At least 50 percent of the Committee membership shall be drawn from individuals who would qualify for membership under paragraph (1)(A). </text></paragraph><paragraph id="H52867ACDF87E4B0188159B0103704AC8"><enum>(3)</enum><header>Term</header><text>Each member of the Committee appointed under paragraph (1) shall serve for a term of four years. Vacancies among the members, whether caused by the resignation, death, removal, expiration of a term, or otherwise, will be filled consistent with the Commission’s procedures then in effect. </text></paragraph><paragraph id="HCDDBFCA09C134248B62586BA3AABF201"><enum>(4)</enum><header>Staggered terms</header><text>The members of the Committee shall serve staggered terms, with one-third of the initial members of the Committee each serving for 1, 2, or 3 years. </text></paragraph><paragraph id="H932EC4BD2E3A4F679E4FAC1959F55C4B"><enum>(5)</enum><header>Members not on other advisory committees</header><text>Public companies and other organizations that are currently represented on any other Commission Advisory Committee are not eligible to have representatives also serve on the Public Company Advisory Committee.</text></paragraph><paragraph id="H6DA91336BFEF479AB9C2306FFD074239"><enum>(6)</enum><header>Members not Commission employees</header><text> Members appointed under paragraph (1) shall not be considered to be employees or agents of the Commission solely because of membership on the Committee.</text></paragraph></subsection><subsection id="HDB5941758C3E4D37893B878D2F7C09A1"><enum>(c)</enum><header>Chair; Vice Chair; Secretary; Assistant Secretary</header><paragraph id="H5AAE5FC589E64FBAA42FF1BD2E3EE410"><enum>(1)</enum><header>In general</header><text>The members of the Committee shall elect, from among the members of the Committee—</text><subparagraph id="HCAC5B176FA364C9FA6F4F54CE8D921A3"><enum>(A)</enum><text>a Chair; </text></subparagraph><subparagraph id="H6C3814300C6B4FB5A51D93A4D117E0F4"><enum>(B)</enum><text>a Vice Chair; </text></subparagraph><subparagraph id="H39EFC0F7BEFD449C8D252EDED00DFAF4"><enum>(C)</enum><text>a Secretary; and </text></subparagraph><subparagraph id="HD43B351D503A43B2B8C6FB189570C7FA"><enum>(D)</enum><text>an Assistant Secretary. </text></subparagraph></paragraph><paragraph id="H42FF3705EC194DEAA13F06861D3F2937"><enum>(2)</enum><header>Term</header><text>Each member elected under paragraph (1) shall serve for a term of two years in the capacity the member was elected under paragraph (1).</text></paragraph><paragraph id="H1AD3C0AA1858472E9BF0F75BB85E4D21"><enum>(3)</enum><header>Subcommittees</header><text>The Chair may create subcommittees that hold public or non-public meetings and provide recommendations to the full Committee.</text></paragraph></subsection><subsection id="H190A493B80F649368CE616B50A8A5BBA"><enum>(d)</enum><header>Meetings</header><paragraph id="H11D33D81EA784C2F9B8FDC3A5FC8B71E"><enum>(1)</enum><header>Frequency of meetings</header><text>The Committee shall meet—</text><subparagraph id="H4B8BC489606345D69F800836726DAF31"><enum>(A)</enum><text>not less frequently than twice annually, at the call of the chair of the Committee; and </text></subparagraph><subparagraph id="HC0670F3B08B8415488C9CE5B34F7F07F"><enum>(B)</enum><text>from time to time, at the call of the Commission.</text></subparagraph></paragraph><paragraph id="H1123AB7B58FB4E908F3E4FFBA5F26631"><enum>(2)</enum><header>Notice</header><text>The Chair of the Committee shall give the members of the Committee written notice of each meeting, not later than two weeks before the date of the meeting.</text></paragraph></subsection><subsection id="HD1BECE74EF3947D597BD3736B4E40BB9"><enum>(e)</enum><header>Compensation and travel expenses</header><text>Each member of the Committee who is not a full-time employee of the United States shall—</text><paragraph id="H33D311BF1E874F199A4E9F35EE32A382"><enum>(1)</enum><text>be entitled to receive compensation at a rate not to exceed the daily equivalent of the annual rate of basic pay in effect for a position at level V of the Executive Schedule under section 5316 of title 5, United States Code, for each day during which the members is engaged in the actual performance of the duties of the Committee; and </text></paragraph><paragraph id="HB8B0606A172C43588E395C70243C7ADD"><enum>(2)</enum><text>while away from the home or regular place of business of the member in the performance of services for the Committee, be allowed travel expenses, including per diem in lieu of subsistence, in the same manner as persons employed intermittently in the Government service are allowed expenses under section 5703(b) of title 5, United States Code. </text></paragraph></subsection><subsection id="H81CC329FF50C4F01B7BBDAA2E620F987"><enum>(f)</enum><header>Staff</header><text>The Commission shall make available to the Committee such staff as the chairman of the Committee determines are necessary to carry out this section. </text></subsection><subsection id="H53F7B39C5A1A45CB89D6CD83677888CF"><enum>(g)</enum><header>Review by Commission</header><text>The Commission shall—</text><paragraph id="H45C0E44D52A044D7B56C3016EB7A066A"><enum>(1)</enum><text>review the findings and recommendations of the Committee; and </text></paragraph><paragraph id="H9356F27E2B814C99B1D0783EC8100747"><enum>(2)</enum><text>each time the Committee submits a finding or recommendation to the Commission, promptly issue a public statement— </text><subparagraph id="H4ADA69A68FBD4351B17D3B88A3287C74"><enum>(A)</enum><text>assessing the finding or recommendation of the Committee; and </text></subparagraph><subparagraph id="H948DCDC310D04F33812CB4A871E4AC3C"><enum>(B)</enum><text>disclosing the action, if any, the Commission intends to take with respect to the finding or recommendation.</text></subparagraph></paragraph></subsection><subsection id="H67EAC5FC1E0E40BEA9E05BC74D1B0945"><enum>(h)</enum><header>Committee findings</header><text>Nothing in this section shall require the Commission to agree to or act upon any finding or recommendation of the Committee.</text></subsection><subsection id="H77FEF8C1E3524EE887B0DC5BFFADE9FE"><enum>(i)</enum><header>Nonapplicability of FACA</header><text display-inline="yes-display-inline">Chapter 10 of part I of title 5, United States Code, shall not apply to the Committee and its activities.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section><enum>IV</enum><header>Protecting U.S. Business Sovereignty</header><section id="H2A1F5B473D294A2584A2269A89F36517"><enum>401.</enum><header>Study on detrimental impact of the Directive on Corporate Sustainability Due Diligence and Corporate Sustainability Reporting Directive</header><subsection id="H4ABDE4CEBB0A49CAA6A07FFA5D1A02EC"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">The Securities and Exchange Commission shall conduct a study to examine and evaluate—</text><paragraph id="HC60A56F74F464D48B2C60F9B69F45B69"><enum>(1)</enum><text>the detrimental impact and potential detrimental impact of each of the Directives on—</text><subparagraph id="HFCC9D8A6381642FF8C2E8F1227A4A441"><enum>(A)</enum><text>United States companies, consumers, and investors; and</text></subparagraph><subparagraph id="H4C7D4B6B00A64202923FC09F36EF519E"><enum>(B)</enum><text>the economy of the United States;</text></subparagraph></paragraph><paragraph id="H6469BFE076F54420ABEC6A5B99C934FF"><enum>(2)</enum><text>the extent to which each of the Directives aligns with international conventions and declarations on human rights and environmental obligations; and</text></paragraph><paragraph id="H070DDE67A75E42FAB5F4AA7A75B8A199"><enum>(3)</enum><text>the legal basis for the extraterritorial reach of each of the Directives.</text></paragraph></subsection><subsection id="H1C745369659F40FAB23B9BF00F1FD89B"><enum>(b)</enum><header>Report</header><text display-inline="yes-display-inline">Not later than 1 year after the date of the enactment of this Act, the Securities and Exchange Commission shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate, the Committee on Financial Services of the House of Representatives, the Secretary of State, the Secretary of Commerce, and the United States Trade Representative a report that includes—</text><paragraph id="H47D4B847FE8D456FA5707978F6B8B6A8"><enum>(1)</enum><text>the results of the study conducted under this section; and</text></paragraph><paragraph id="H2E32D0EF24204CF2BAF67D5F0DAA7CA2"><enum>(2)</enum><text>recommendations for policymakers and relevant stakeholders on potential mitigating measures, alternative approaches, or modifications to each of the Directives that would address any concerns identified in the study.</text></paragraph></subsection><subsection id="H9C92F555647B4A4C9E230D3A21714AA1"><enum>(c)</enum><header>Access to information</header><text display-inline="yes-display-inline">The Securities and Exchange Commission may request from private entities such relevant data and information as the Securities and Exchange Commission determines necessary to carry out the study required under this section and such private entities shall provide such requested data and information to the Securities and Exchange Commission.</text></subsection><subsection id="H66486F51711846F0939B7D8DD0EDA665"><enum>(d)</enum><header>Directives defined</header><text>In this section the term <term>Directives</term> means—</text><paragraph id="H2ED34866616840F59DF7212B032A0595"><enum>(1)</enum><text>the proposed directive entitled <quote>Corporate Sustainability Due Diligence</quote> adopted by the European Commission on February 23, 2022; and</text></paragraph><paragraph id="HEF1A165172A64F459A0A61499934EE48"><enum>(2)</enum><text>the Corporate Sustainability Reporting Directive of the European Commission effective January 5, 2023. </text></paragraph></subsection></section>