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AFPM files comments to US Securities Exchange Commission

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Hydrocarbon Engineering,

The American Fuel & Petrochemical Manufacturers (AFPM) filed comments to the US Securities Exchange Commission’s (SEC) Concept Release on Business and Financial Disclosure Required by Regulation S-K. AFPM’s comments focus on the SEC’s consideration of whether to mandate requirements specifically for environmental, social, and governance (ESG) disclosure, particularly in relation to climate change.

“We think it would be a mistake to politicise decades of settled legal precedent and regulation by mandating reporting of speculative environmental or social issue information in SEC filings. The existing requirements are adequate for addressing the issues that are fundamental for financial investors and securities markets and mandating the disclosure of immaterial, speculative matters, would not be in shareholders’ best interest. Requiring a company to disclose social and environmental matters that are not material or sufficiently certain would effectively force companies to support social and environmental policy agendas that lie outside the SEC’s authority,” said AFPM President Chet Thompson.

The Concept Release explores whether Regulation S-K remains a sound structure for ensuring adequate business and financial disclosures to investors. Additionally, it asks whether parts of the regulation have become unnecessary and whether additional disclosures are needed to support the integrity of securities markets, build investor confidence in these markets, and support capital formation in the market.

“AFPM believes it is important to maintain the integrity of the nation’s longstanding corporate disclosure laws, which have enjoyed bipartisan consensus, regardless of the political party leading the SEC. We hope the SEC carefully considers the implications of changing mandatory reporting requirements, particularly in relation to social and environmental issues. Any changes to Regulation S-K should focus on maximising shareholder benefits and should not risk more than 80 years of federal laws, regulations, and court decisions governing corporate disclosure. We support keeping non-material information separate from what is material and relevant to a company’s financial profile.”

Adapted from press release by Rosalie Starling

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