Yesterday the Securities and Exchange Commission proposed a series of new rules to implement sections of the Dodd-Frank Act addressing:
- mine safety; and
- payments made to governments in connection with resource extraction.
The proposed rules on disclosure of payments made to governments by companies involved in resource extraction would add a new Section 13(q) to the Securities Exchange Act of 1934. Section 13(q) would require companies to disclosure information related to the type and total amount of payments made to the U.S. and foreign governments in connection with projects related to the commercial development of oil, natural gas or minerals.
The disclosure would be made in a company’s annual report and “payments” would include taxes, royalties, fees, including licensing fees, production entitlements, bonuses and other material benefits. A company would be required to break down payment information according to the:
- total amount of payments, by category;
- currency used to make the payments;
- financial period in which the payments were made;
- business segment of the company that made the payments;
- government that received the payments; and
- project to which the payments relate.
The Commission’s release defines a number of other terms used throughout the proposed rule, including: “resource extraction issuer”, “commercial development of oil, natural gas, or minerals” and “foreign government”, and is specifically seeking comments on whether smaller reporting companies and foreign private issuers should be:
- all together exempt from the proposed rules;
- subject to scaled disclosure requirements, or
- subject to a period of delayed implementation.
Comments are due by January 31, 2011.
[…] Act addressing:conflict minerals;mine safety; andpayments made to governments in connection with resource extraction.The proposed rules on conflict minerals would add a new Section 13(p) to the Securities Exchange […]