On July 2, 2013 the US District Court for the District of Columbia granted a motion for summary judgment vacating the rules adopted by the US Securities and Exchange Commission (the “SEC”) requiring resource extraction issuers to disclose payments made to governments in connection with the commercial development of oil, natural gas and minerals. The SEC has not revealed how it will respond to the ruling, but it remains obligated under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) to promulgate rules requiring disclosure of such payments. In a separate, parallel case, a similar challenge has been brought against the SEC’s conflict mineral disclosure rules, and a ruling in that case is expected shortly. Despite these events, companies subject to the SEC’s resource extraction and conflict mineral rules should not assume the rules will be revised significantly, but should continue to collect and document the information required to be disclosed under the conflict mineral and the now-vacated resource extraction rules pending the final outcome of these cases and potential new rulemaking by the SEC.
Resource Extraction Disclosure Rules Vacated -
The Dodd-Frank Act requires the SEC to promulgate rules requiring certain publicly traded companies to disclose payments made to the US Federal government or foreign governments in connection with the commercial development of oil, natural gas or minerals. On August 22, 2012, the SEC adopted final rules (the “Original Rules”), which required resource extraction issuers to disclose information relating to payments made on or after October 1, 2013. Disclosure of such payments were to be filed with the SEC on a new Form SD within 150 days of an issuer’s fiscal year-end (i.e., before May 31 for calendar year reporting companies).
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