SEC Clarifies Conflict Mineral Disclosure Rules: What You Need to Know

“Payments made to majority-owned government transportation services to supply people or materials to an extractive job site are considered ancillary or preparatory and not subject to disclosure.” (Holland & Knight)

Late last month, the Securities and Exchange Commission published a set of Frequently Asked Questions on the agency’s conflict mineral and resource extraction disclosure requirements.

From lawyers and law firms on JD Supra, here’s what you need to know:

SEC Issues FAQs On Conflict Minerals Rules (Leonard, Street and Deinard):

“The SEC has issued twelve frequently asked questions, or FAQs, on the conflict minerals rules. Although few in number, you could almost hear the cheers at law firms throughout the world as the staff offered mostly common sense advice on some often-debated questions.” Read on>>

SEC Answers Frequently Asked Questions About Conflict Minerals Disclosure — Finally (Perkins Coie):

“Note that these FAQs are not rules, regulations or statements of the Commission. Further, the Commission has neither approved nor disapproved the FAQs.” Read on>>

SEC Staff Issues Guidance on Conflict Minerals (Shearman & Sterling LLP):

“For the upcoming first reporting deadline of May 31, 2014 for the 2013 calendar year, and in the likely absence of further SEC Staff guidance, each issuer will ultimately need to make judgments on how best to comply with the Conflict Minerals Rules based on its specific facts and circumstances and in consultation with its advisors and relevant industry association. Accordingly, we would urge all SEC reporting issuers to proceed apace with their conflict minerals compliance programs and due diligence inquiries to satisfy this new reporting obligation.” Read on>>

SEC Provides FAQs on Conflict Minerals Rules (King & Spalding):

“Given the expanding list of interpretive questions that have developed since the rules were adopted, and this limited release of FAQs, it may be possible that additional guidance will be forthcoming from the Division of Corporation Finance. However, at this time, issuers and their counsel are still left to apply a significant amount of judgment to an issuer’s facts and circumstances under the SEC’s final conflict minerals rules. Nevertheless, these FAQs could provide welcome relief to many issuers, including service providers like airlines, and consumer product manufacturers concerned with the makeup of their product’s packaging or containers.” Read on>>

SEC Staff Provides Guidance on Conflict Mineral and Resource Extraction Disclosure Requirements (Morrison & Foerster LLP):

“As a reminder, the new reporting requirements under the Conflict Minerals Rule are now in effect for the calendar year ending December 31, 2013, and any required disclosures must be included in a report on Form SD filed by May 31, 2014. Disclosures required under the Resource Extraction Rule must be included in a report on Form SD filed within 150 days after the conclusion of any fiscal year ending after September 30, 2013.” Read on>>

SEC Issues FAQs on Conflict Minerals and Resource Extraction (Holland & Knight LLP):

“Disclosure of the use of conflict minerals is required under Exchange Act Section 13(p), SEC Rule 13p-1 and Item 1.01 of Form SD. Disclosure of certain payments made by resource extraction issuers to foreign governments or the U.S. government is required by Exchange Act Section 13(q), SEC Rule 13q-1 and Item 2.01 of Form SD.” Read on>>

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