SEC Issues Guidance on Conflict Minerals Rule


On May 30, 2013, the staff of the US Securities and Exchange Commission (the “Staff”) Division of Corporation Finance issued guidance in the form of frequently asked questions (“FAQs”) regarding the SEC’s rules requiring issuers to disclose their use of conflict minerals (the “Conflict Minerals Rule”).

While many aspects of the Conflict Minerals Rule remain in need of further clarification, the FAQs provide issuers with some helpful interpretations.

Failure to Timely File a Form SD Does Not Affect Form S-3 Eligibility -

In the FAQs, the Staff provides that an issuer that fails to timely file a Form SD regarding conflict minerals or that fails to comply with resource-extraction disclosure rules will not automatically lose its eligibility to use Form S-3. Eligibility to use Form S-3 is based on a registrant’s timely filing of all materials required under Sections 13(a) or 1(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Disclosing the use of conflict minerals falls under Exchange Act Section 13(p) and resource extraction disclosure falls under Exchange Act Section 13(q). As a result, failure to timely file regarding conflict minerals or to comply with resource-extraction disclosures will not impact an issuer’s eligibility to use Form S-3. In addition, although not expressly stated, we believe that the same guidance should apply with respect to the Form F-3 eligibility of foreign private issuers.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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