SEC Announces HCM Rules in April

The White House released the 2022 Regulatory Agenda this week, which outlines upcoming regulations to be proposed or finalized by agencies (such as the SEC) in the coming months. Of particular note were the following.

Federal Trade Commission 

• Immediate: Ban on Non-Competes. As you may be aware, the FTC proposed a broad, blanket ban on non-compete agreements that if finalized would make them unlawful for all employees and independent contractors. Comments are due in 60 days – see related story for details.

Securities & Exchange Commission

• April: Proposed Human Capital Metrics. According to the SEC’s agenda, proposed human capital metrics rules are now scheduled for this spring. Although the calendar says April, it is likely that the rules could be proposed anytime between April and October. However, as we learned last year, the dates on these agendas are subject to change, so further delay is possible.
  
  
• April: Final Climate Rules. The SEC is also likely to issue final climate change disclosure rules by spring, with or without the controversial “Scope 3” reporting requirement. The Chair is under considerable pressure to get this rule done in some form.
  
  
• October: Board Diversity. The SEC has scheduled a proposed regulation requiring enhanced disclosure on board diversity for the fall. No details are given, but it is likely the SEC would pursue a rule requiring companies to annually disclose the voluntarily self-identified gender, race, ethnicity, and veteran status of their board directors and nominees. It is possible the SEC would expand this to Section 16 officers, or even that the proposal would include a “comply-or-explain” provision requiring companies to have at least one diverse board member or explain why they don’t.

Other items on the agenda included rules on stock buyback disclosure and cybersecurity risk.