SEC (Re)adopts Its Resource Extraction Rule, but Will the Legal Battle Continue?


The Securities and Exchange Commission June 27 adopted, for a second time, its long-suffering resource extraction rule.

Will this finally bring to an end the four-year legal battle over the Dodd-Frank-required rule?

It seems unlikely.  The American Petroleum Institute (API), which was behind the lawsuit that killed the original rule, slammed the reproposal in a February comment letter to the commission, foreshadowing additional legal action.

Originally adopted in 2012, the rule was struck down by the D.C. District Court as a result of API’s suit.  Reproposed in 2015 due to a suit filed by Oxfam to speed up the rulemaking, it requires companies to reveal the payments they make to governments as part of their attempts to develop oil, gas and minerals.

The new rule does include exemptions.  For example, disclosure of resource exploration payments can wait a year, and companies acquiring other companies can also delay their reporting for the acquired company.

Companies must comply with the rule for fiscal years ending on or before Sept. 30, 2018, by filing a Form SD. 

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