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SEC Sets Schedule for Rulemaking for New Resource Extraction Rule
Practical Law Legal Update w-000-6336 (Approx. 4 pages)
SEC Sets Schedule for Rulemaking for New Resource Extraction Rule
by Practical Law Corporate & Securities
| Published on 05 Oct 2015 • USA (National/Federal) |
The SEC filed a notice of expedited schedule for promulgating a new resource extraction rule required under the Dodd-Frank Act.
On October 2, 2015, the SEC filed a proposed schedule for adopting a resource extraction rule, as required under Section 13(q) of the Exchange Act, with the US District Court for the District of Massachusetts as mandated under the court's holding in Oxfam America, Inc. v. SEC (No. 14-cv-13648, (D. Mass. Sept. 2, 2015)).
Section 13(q) of the Exchange Act, enacted as part of the Dodd-Frank Act, requires the SEC to adopt rules requiring certain disclosure by reporting companies engaged in commercial development of oil, natural gas or minerals. The SEC had adopted Rule 13q-1, the resource extraction rule, in August 2012, but, soon after, associations of oil, natural gas and mining companies filed suit challenging the final rule on various grounds. In July 2013, the US District Court for the District of Columbia vacated the rule and remanded it to the SEC, ordering the agency to reformulate the rule. On September 18, 2014, following several postponements of an anticipated SEC rulemaking timeline, Oxfam America, Inc. sued the SEC to compel it to implement Section 13(q) of the Exchange Act. On September 2, 2015, the Massachusetts District Court held that the SEC's delay in adopting a final resource extraction rule constitutes unlawful withholding of the rule in violation of the Administrative Procedure Act and ordered the SEC to file with the court an expedited schedule for this rulemaking within 30 days. For more information on the SEC's prior attempts to adopt a resource extraction rule and the September 2015 district court holding, see Legal Updates:
In its notice filed with the Massachusetts District Court, the SEC proposed the following timetable:
- Vote on a proposed rule before the end of 2015.
- Allow members of the public to comment on the proposal for least 45 days after issuing the proposal.
- Vote on a final rule within 270 days of filing the notice, or by June 27, 2016.
In offering this proposed schedule, the SEC noted that this is an extremely expedited timeframe to complete rulemaking on such a contentious matter, given the history of the vacated resource extraction rule and the SEC's ongoing demanding workload.
For more information about Section 13(q) of the Exchange Act and the related rulemaking and litigation, see Practice Note, Summary of the Dodd-Frank Act: SEC Authority and Selected Securities Act and Exchange Act Provisions.