The House Appropriations Committee has unanimously passed an amendemnt from Rep. Mark Kirk (R-Ill.) that requires publicly-traded companies doing business in Iran and other terrorist-sponsoring states to inform their investors of those activities and note its risk to shareholders.
The legislation, part of the 2010 Financial Services Appropriations Bill, would require the Securities and Exchange Commission to set up a process to identify the companies.
"By their nature, terror-sponsoring regimes like Iran remain unstable and pose significant risks to investors – and shareholders have a right to know those risks,” said Kirk in a statement.
Kirk’s full press release, which includes the text of his amendment is after the jump:[[READMORE]]
House Appropriations Committee Passes Kirk Amendment Requiring Full Disclosure of Companies Operating in Iran
Amendment requires all publicly-traded companies to tell investors if they operate in nations backing terrorism
WASHINGTON – The House Appropriations Committee late last night unanimously adopted an amendment offered by U.S. Rep. Mark Kirk (R-Ill.) that would force companies doing business in Iran to fully disclose their activities to U.S. investors.
The amendment, attached to the Fiscal Year 2010 Financial Services Appropriations bill, requires the U.S. Securities and Exchange Commission (SEC) to establish a process to identify all publicly-traded companies that operate in terrorist-sponsoring states, and require those companies to inform investors of such activities. The Kirk Amendment also requires disclosures to note the nature of the risk to shareholders based on involvement in higher-risk countries.
“Investors should have the right to know if a publicly-traded company does business with Iran,” said Kirk, co-chair of the bipartisan Iran Working Group and a member of the Financial Services Subcommittee. “Doing business in Iran means doing business with terror-financing banks, designated proliferators like the Islamic Revolutionary Guard Corps and other entities responsible for the murders of American citizens. By their nature, terror-sponsoring regimes like Iran remain unstable and pose significant risks to investors – and shareholders have a right to know those risks.”
Five years ago, Congress authorized the creation of the Office of Global Security Risk at the SEC – an office mandated to ensure companies disclose involvement in terror-sponsoring states and staffed by only three full-time employees. The Office does not submit regular reports to Congress and is not transparent to the public.
The text of the Kirk Amendment appears below:
Amendment to the Financial Services Appropriations Bill, 2010
Offered by Mr. Kirk of Illinois
At the appropriate point in the report, insert the following:
The SEC shall issue such regulations as may be necessary to ensure that all companies sold on U.S. exchanges operating in State Department-designated terrorist-sponsoring states are disclosing such activities to investors;
The SEC’s Office of Global Security Risk within the Division of Corporation Finance shall report within 90 days and every six months thereafter on the steps it has taken to carry out its mandate as established in House Report 108-221, specifically:
(1) establishing a process by which the SEC identifies all companies on U.S. exchanges operating in State Department-designated terrorist-sponsoring states;
(2) ensuring that all companies sold on U.S. exchanges operating in State Department-designated terrorist-sponsoring states are disclosing such activities to investors;
(3) implementing enhanced disclosure requirements based on the asymmetric nature of the risk to corporate share value and reputation stemming from business interests in these higher risk countries;
(4) coordinating with other government agencies to ensure the sharing of relevant information across the Federal government; and
(5) initiating a global dialogue to ensure that foreign corporations whose shares are traded in the United States are properly disclosing their activities in State Department-designated terrorist-sponsoring states to American investors.