Supporters Happy With SEC Rules Regarding Financial Transparency Law

Two years after it passed Congress, the Securities and Exchange Commission has finally written rules to enforce a financial transparency law that was pushed by a local lawmaker.

Maryland Sen. Ben Cardin was behind a provision in the 2010 Wall Street reform bill that would force oil, gas, and mining companies listed on U.S. stock exchanges to disclose payments they make to host governments where they do business.

The SEC had to write the rules to enforce it, and the longer it took, the more worried supporters became the law would be weakened. Cardin says that didn't end up being the case when the rules came out this week.

"They have not yielded to the pressure of the industry to weaken the regulations," he says.

Cardin expects countries in Europe to now enact similar laws.

"So that the industry's concern about having different rules for U.S. registered countries versus companies registered on other stock exchanges will not be true," he says.

Watchdog groups mostly concurred with Cardin's assessment that the law wasn't weakened. Ian Gary is with Oxfam America, which sued the SEC to get the rules released.

"We never knew it would be such a fight to get the SEC to do its job and follow the Congressional mandate," says Gary.

Paul Bugala, with Calvert Investments, which is based in Bethesda, says the law is good for investors because it gives them more information to base their investments.

"As the world's resource needs increase, companies have to go further and further afield to meet them, and they're going into countries where governance is not as strong as it could be," says Bugala. "And the risks of operating in unstable states increase."

Industry groups argued the law puts American companies at a disadvantage compared to companies that didn't have to follow it.