(Reuters) — Three trade groups on Monday asked a U.S. appeals court to stop the Securities and Exchange Commission from implementing a new rule requiring companies to determine if their products contain “conflict minerals” from a war torn region in Africa.
The filing, by the National Association of Manufacturers, the U.S. Chamber of Commerce and the Business Roundtable, marks a last-ditch effort by the groups to put the rule on hold before it goes into effect on June 2.
The SEC's conflict minerals rule stems from a provision in the 2010 Dodd-Frank Wall Street reform law that requires publicly traded manufacturers to disclose to investors whether any tantalum, tin, gold or tungsten used in their products may have originated from the conflict-ridden Democratic Republic of Congo.
In April, the U.S. Appeals Court for the District of Columbia Circuit struck down a provision of the rule that forces companies to tell investors whether their products are not “conflict free” on the grounds it violates free speech.
However, the court left the rest of the rule largely intact.
Last week, top SEC officials said they planned to press ahead with requiring companies to comply with provisions that were not deemed unconstitutional.
In guidance released to companies, the SEC said it expects them to still conduct the required due diligence to determine the origin of the minerals and file any required reports with the commission.
However, companies will not be required to declare whether their products are conflict-free or not, and certain audit requirements will also be waived.
In an emergency request with the court, however, the three groups argued that “the current rule makes little sense” without the “compelled disclosure” and that the SEC should have issued notice and comment before proceeding to implement the rule.
“Because of the agency's decision to enforce a tremendously costly rule that no longer achieves the statute's goals and that will likely be vacated, appellants respectfully seek a temporary stay of the rule until the district court's decision on remand regarding the appropriate remedy,” they wrote.
The three groups asked the court to weigh in on their request by May 26.
They announced their plans to seek the stay last week, and at that time, an SEC spokesman declined to comment on the request.