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(Bloomberg) — Republicans on the Senate Banking Committee urged the Securities and Exchange Commission to reject a proposed rule from Nasdaq Inc. requiring public companies to adopt new racial and gender diversity standards for their boards.

© Bloomberg Sun shines outside of the Nasdaq MarketSite in New York.

The lawmakers say Nasdaq should not use its “quasi-regulatory authority to impose social policies” and that the proposal would cost companies money and discourage closely held firms from going public. Their concerns were laid out in a letter to acting SEC Chair Allison Lee on Friday.

© Bloomberg Monitors display signage outside the Nasdaq MarketSite in the Times Square neighborhood of New York.

The stance is at odds with that of some public companies, including Facebook Inc. and Microsoft Corp., which have urged the SEC to approve Nasdaq’s proposal. The SEC has until this summer to make a preliminary, and possibly binding, decision.

“Our proposal is a market-led solution that should simplify and standardize disclosure requirements to avoid the type of regulatory overreach that the critics fear,” Nasdaq spokesman Joe Christinat said by phone.

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