SEC to vote on conflict minerals, resource payments rules


U.S. securities regulators are set to vote on a rule that will require manufacturers to disclose to investors whether their products contain certain minerals from the war-torn country of the Democratic Republic of the Congo.

The Securities and Exchange Commission is also scheduled to vote on a separate rule that will requires oil, gas and mining companies listed in the United States to disclose payments to foreign governments in an effort to reduce the risks of bribery and corruption.

Both rules were required by the 2010 Dodd-Frank financial regulation overhaul, but the SEC has delayed implementing them amid industry criticism that the rules are too onerous and may reveal sensitive information to rivals, Reuters reports.

The final version of the so-called conflict minerals rule removes an obligation required in previous proposals for manufacturers to be responsible for generic products made by a third party that it puts its own label on.

The rule also provides some leeway for smaller companies, giving them four years instead of two to determine whether the minerals in its products originated in the covered countries or financed or benefited armed groups in those countries.

The resource extraction rule will apply to any payment to further exploration, extraction, processing, and export of oil, natural gas or minerals or the acquisition of a license for related activity, the SEC said.

The new rule would apply to any payment – including a series of related payments – over $100,000, the SEC said.

The payments that need to be disclosed include taxes and royalties, but also dividends and infrastructure improvements, and other types of fees.

Companies would be required to provide information broken down by projects, but the rules give companies flexibility in determining what constitutes a single project.

Companies will be required to report the resource payments information for fiscal years that end after September 30, 2013.

Companies subject to the conflict minerals rule would have until May 31, 2014, to file the first report.