SEC Proposes Rules to Implement the “Resource Payments” Disclosure Requirements of the Dodd-Frank Act: Proposed Rules Would Require Disclosures Regarding Payments Made to Governments for Commercial Development of Natural Resources

Sullivan & Cromwell LLP - January 6, 2011

The SEC has proposed rules under the Securities Exchange Act that would implement the “resource payments” disclosure provisions of Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The proposed rules would require an issuer to include in its Form 10-K, Form 20-F or Form 40-F annual reports detailed information relating to payments made during the covered fiscal year by the issuer or any controlled entity to a foreign government (including subnational governments and government-owned companies) or the U.S. federal government for the purpose of the commercial development of oil, natural gas or minerals. It is expected that an issuer will be required to begin furnishing these disclosures for its first fiscal year ending on or after April 15, 2012.

In many respects, the proposed rules provide only limited elaboration on the underlying statutory provisions. The SEC has requested comments on all aspects of the proposals. Comments are due no later than January 31, 2011.