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Dodd-Frank

Resource Extraction Issuers: Small Entity Compliance Guide

by   |   November 15, 2012

The SEC has released a Small Entity Compliance Guide relating to the recently adopted rules relating to new disclosures required of “resource extraction issuers.”  Compliance Guides like this one are required by 1996 legislation aimed at reducing regulatory compliance burdens for small businesses by explaining federal agency rules in plain language.

The Compliance Guide provides a good overview of new Rule 13q-1 and Form SD, which require resource extraction issuers to disclose “certain payments made to a foreign government or the Federal Government for the purpose of the commercial development of oil, natural gas, or minerals.”  You can check out some of our prior coverage of Rule 13q-1 here.

The rule applies to issuers who are required to file annual reports with the SEC and are engaged in the commercial development of oil, natural gas, or minerals, which includes the activities of exploration, extraction, processing, export, or license acquisition for any of the foregoing.  However, the rule is not meant to apply to activities that are “ancillary or preparatory” to commercial development.

The Compliance Guide provides a good overview of the definition of a number of key terms in the rule, as well as the scope, content, and means of making the required disclosure. Rule 13q-1 will require resource extraction issuers to make disclosures by filing new Form SD on EDGAR no later than 150 days after the end of the issuer’s fiscal year.  The first round of Form SD filings must be made in the fall of 2013, for fiscal years ending after September 30, 2013.

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