Washington, D.C. Oct. 05, 2022 (GLOBE NEWSWIRE) — The U.S. Securities and Exchange Commission (SEC) has approved Nasdaq Stock Market LLC’s listing rules, requiring most companies to list on the stock market to meet race, gender and sexual preference quotas and board memberships. A new Video published by the New Civil Liberties Alliance, a nonpartisan, nonprofit civil rights group, explains why Board Diversity Rules lie outside the agency’s regulatory authority. The Securities and Exchange Act does not authorize the SEC to monitor the demographic composition of company boards. NCLA is representing the National Center for Public Policy Research, based in Washington, DC, in its case against the SEC’s unconstitutional and unlawful actions.

The Board Diversity Rules approved by the SEC on August 6, 2021 require most Nasdaq-listed companies to meet the requirement, or explain why they do not meet the requirement, for company boards to include at least one director who identifies as a woman identifies, and at least one director who does so, self-identifies as “Black or African American, Hispanic or Latino, Asian, Native American or Alaskan Native, Hawaiian Native or Pacific Islander, or of two or more racial or ethnic origins” or as LGBTQ+. Companies are also required to report annual diversity statistics on their boards or face severe penalties, including delisting.

In approving the Board Diversity Rules, the SEC did not identify a provision of the Exchange Act that authorizes the SEC to regulate the composition of corporate boards based on race, gender or sexual orientation. The Stock Exchange Act empowers the SEC to regulate securities to ensure honest markets and enforce federal laws that penalize fraud. Congress does not and cannot relinquish its legislative powers to any administrative agency cooperating with a quasi-public exchange to exercise those powers. The rules also impermissibly require companies to be challenged their own integrity by demanding them, at the risk of being de-listed…