SEC Adopts Final Rules on Payment Disclosure by Resource Extraction Issuers | Practical Law

SEC Adopts Final Rules on Payment Disclosure by Resource Extraction Issuers | Practical Law

The SEC issued final rules implementing disclosure requirements under the Dodd-Frank Act relating to payments made by resource extraction issuers to US or foreign governments.

SEC Adopts Final Rules on Payment Disclosure by Resource Extraction Issuers

Practical Law Legal Update 7-521-0513 (Approx. 3 pages)

SEC Adopts Final Rules on Payment Disclosure by Resource Extraction Issuers

by PLC Corporate & Securities
Published on 22 Aug 2012 • USA (National/Federal)
The SEC issued final rules implementing disclosure requirements under the Dodd-Frank Act relating to payments made by resource extraction issuers to US or foreign governments.
On August 22, 2012, the SEC announced that it had adopted final rules implementing disclosure requirements for resource extraction issuers set out in Section 1504 of the Dodd-Frank Act.
The rules require a company to disclose payments made to governments if it:
  • Must file an annual report with the SEC.
  • Is engaged in the commercial development of oil, natural gas or minerals. This includes exploration, extraction, processing and exporting activities or acquiring a license for any of these activities
The company must disclose any payment that is:
  • Made to further the commercial development of oil, natural gas or minerals.
  • Not de minimis, which means any payment or series of related payments that equals or exceeds $100,000 during the most recent fiscal year.
  • Within the types of payments specified in the rules, including taxes, royalties, fees, dividends and infrastructure improvements.
The company must disclose information about these payments in a new report, Form SD. The information that must be disclosed includes:
  • The governments that received payments and the country of each government. The term "government" includes governmental agencies and companies owned by the government. This covers the US federal government and foreign governments.
  • The projects for which payments were made.
  • Type and total amount of payments made to each government.
  • Type and total amount of payments made for each applicable project.
  • Total amount of payments for each category of payment.
This information must be presented in XBRL format as an exhibit to the Form SD and can be unaudited. A resource extraction issuer must file a Form SD within 150 days after the end of its fiscal year.
Companies must begin reporting resource extraction payments for fiscal years ending after September 30, 2013. For their first report, companies with fiscal years that started before September 30, 2013 can disclose only those payments made between October 1, 2013 and the end of their fiscal year.