SEC denies request to delay transparency rule
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U.S. securities regulators denied a request to delay new rules that will require oil, gas and mining companies to disclose payments to foreign governments, after business groups also sued to force changes to the rule.
In an order dated Thursday, the Securities and Exchange Commission said the groups had failed to demonstrate the imminent, irreparable harm that is required to grant a stay.
The denial comes as the SEC and other regulators face a barrage of lawsuits from industry seeking to stop or delay new financial regulation, much of it stemming from the 2010 Dodd-Frank law.
The rule at issue is championed by humanitarian organizations. It aims, in part, to combat corruption abroad by U.S. energy companies. But industry groups have argued the rule is far too costly and would give rivals sensitive business information. The American Petroleum Institute, the Chamber of Commerce and other business groups sued the SEC last month and said the disclosure rule went beyond what was required by the law.
In addition to suing the SEC, the groups separately asked the SEC to stay the effective date of the rule while the court considered their challenge, citing the initial compliance costs and the immediate competitive disadvantage the rule would impose. But initial compliance costs are usually not considered irreparable harm, and competitive disadvantage claims are too speculative, the commission said.
In a statement, API federal relations director Justin Spickard said: We've been working hard to increase transparency for a decade, but this rule could interfere with ongoing efforts by making U.S. firms less competitive against state owned firms in China and Russia that have no interest in transparency.
The court overseeing the challenge to the rule established an expedited schedule for the case and will likely issue a decision by spring 2013, almost one year before the first filings would be due, the SEC said.
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