Sherman Introduces the Pandemic Disclosure Act

Washington, D.C. – Congressman Brad Sherman (D-Sherman Oaks), who is also Chair of the House Financial Services Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets, introduced legislation which directs the SEC to put in place new rules to require public companies to disclose their risks and exposures to pandemics at the outset of any new outbreak. This bill, the Pandemic Disclosure Act, contains disclosure requirements which would only be triggered when the World Health Organization declares that a health event has become a pandemic. Under the bill, companies are also required to disclose the steps they are taking to mitigate these risks.

"Since the outbreak of this crisis we have seen historic declines in stock markets," said Congressman Sherman. "Investors deserve to know which companies are most exposed to the risks of a pandemic. Not only will this help protect investors but also improve the efficiency of our capital markets."

This legislation builds on the advisory statement issued in response to the coronavirus by SEC Chairman Clayton earlier this month. In his statement, Chairman Clayton indicated that companies' "assessment of, and plans for addressing, material risks to their business and operations resulting from the coronavirus" in addition to "how companies plan and respond to the events as they unfold can be material to an investment decision."

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