Extractive industry payment disclosure rules finalized
Hot Topic | January 2021
Updated: The SEC finalizes rules requiring disclosure of payments to governments by extractive industry companies.
Share
The final rules seek to satisfy a requirement of the Dodd-Frank Act by providing transparency through disclosures of payments to governments by resource extraction issuers, and address concerns from previously overturned rules.
Applicability
Final rule: SEC Release No. 34-90679
- SEC extractive industry issuers (i.e. commercial development of oil, natural gas or minerals) required to file an annual report
Relevant dates
- Effective March 16, 2021
- Compliance is required starting with the fiscal year ending no earlier than March 16, 2023
- Disclosures must be furnished to the SEC no later than 270 days following the end of the most recently completed fiscal year.
Key Impacts
The finalized rules:
- Require public disclosure of payments to governments by companies engaged in the commercial development of oil, natural gas or minerals at the project level.
- Define ‘project level’ and outline required disclosures of payments to any foreign government or the US federal government.
- Define ‘control’ to exclude entities or operations in which an issuer has a proportionate interest.
- Include certain exemptions and relief, including:
- two conditional exemptions for situations in which a foreign law or a pre-existing contract prohibits the required disclosure;
- exemptions for smaller reporting companies and emerging growth companies; and
- relief for issuers that have recently completed their initial public offering or an acquisition.
- Require disclosure by deeming the payment information to be furnished to, but not filed with, the SEC using Form SD; and
- Specify the compliance date to start with the fiscal year ending no earlier than two years after the effective date of the final rules.
Report contents
- Background and impacts
- Key provisions of the rules
- Effective date and transition
Download the document:
Extractive industry payment disclosure rules finalized
Download PDF