# Plain Language Summary: Mandatory Materiality Requirement Act of 2022

This bill would change how the Securities and Exchange Commission (SEC) creates rules about what information companies must disclose to investors. Right now, the SEC can require companies to report various types of information, and the agency has fairly broad power to decide what counts as important. This bill would add a new requirement: before the SEC can create a new disclosure rule, it must first prove that the information is actually material—meaning it would genuinely matter to investors making decisions about whether to buy or sell stock in that company.

The bill essentially creates a higher bar for the SEC to clear when creating new disclosure requirements. Instead of the agency deciding on its own that something should be disclosed, it would have to explicitly determine that a reasonable investor would consider the information important enough to change their investment decision. For example, if the SEC wanted to require companies to disclose information about their supply chain risks, it would need to demonstrate that investors would actually care about that information when deciding whether to invest. The bill defines "important" information as anything that would significantly change the total picture of information available to an investor—basically, if leaving it out would be misleading.

This change would primarily affect large public companies and the SEC's regulatory process. Companies might face fewer disclosure requirements going forward, which could mean less paperwork and compliance costs for them. However, investors might receive less information about companies they're considering investing in. The bill does not apply when the SEC is removing or reducing existing disclosure requirements, so current rules would stay in place unless the SEC actively decides to change them. The practical impact depends on how strictly the SEC interprets the new "materiality" standard and how many new disclosure rules the agency tries to create in the future.

Mandatory Materiality Requirement Act of 2022

Huizenga, Bill

Mandatory Materiality Requirement Act of 2022 This bill limits additional disclosure requirements applicable to issuers of securities. Specifically, the Securities and Exchange Commission may only require an additional disclosure if the commission determines that there is a substantial likelihood that a reasonable investor of the issuer would consider the information important with respect to an investment decision.