WASHINGTON (Reuters) - Two business groups urged the U.S. Securities and Exchange Commission on Friday not to reinstate a Web tool aimed at helping investors identify companies with investments in countries the United States designates as "sponsors of terrorism."

"This is the kind of thing that prompts companies to go somewhere else," said William Reinsch, president of the National Foreign Trade Council, which represents major U.S. corporations.

The SEC is seeking comment about whether to reinstate some kind of mechanism that would make it easier for investors to find out if a company has any business in or with countries that are designated by the U.S. government as "state sponsors of terrorism."

In July, the agency suspended its Web site search tool after heavy criticism from lawmakers and business groups who called the tool unfair and said it portrayed firms in a misleading and negative light. At the time, the SEC said it would revamp the tool so it would more accurately reflect a company's activities in the countries.

The online tool had allowed visitors to the SEC's Web site to search for companies whose annual reports contain references to business related to Sudan, Syria, North Korea, Iran and Cuba.

"Sensitive judgments have to be made and the SEC is the wrong place to be doing it," said Todd Malan, president of the Organization for International Investment, which represents foreign companies.

Both the National Foreign Trade Council and the international investment group are urging the SEC not to do anything. "We're sort of saying: It ain't broke, so why fix it," Reinsch told reporters.

The SEC set a January 22 deadline for investor groups, companies and individuals to offer comments and suggestions.

(Reporting by Rachelle Younglai; Editing by Tim Dobbyn)
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