SEC Sets Final Rules For Energy Companies To Disclose Payments To Governments

(RTTNews) - The energy companies are required to disclose payments made to governments for the commercial development of oil, natural gas or minerals, according to rules adopted by the Securities and Exchange Commission.

Mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the new rules aim to promote greater transparency about payments related to resource extraction.

As per the revised rules, if an issuer engages in the commercial development of oil, natural gas, or minerals as exploration, extraction, processing, and export, the person needs to disclose payments made to the U.S. federal government or a foreign government, and is also required to file annual reports with the Commission under the Securities Exchange Act.

The issuer must also disclose payments made by a subsidiary or entity controlled by the issuer.

Resource extraction issuers are required to comply with the rules starting with their fiscal year ending no earlier than September 30, 2018. The required disclosure will be filed with the Commission annually on Form SD, no later than 150 days after the end of its fiscal year.

SEC Chairman Mary Jo White stated that she is pleased the agency completed the final rules, which will provide enhanced transparency to further the statutory goal.

The rules were adopted three years after a federal judge discarded an earlier version of the measure. They were initially adopted by the Commission on August 22, 2012, but it was subsequently vacated by the U.S. District Court for the District of Columbia.

Since then, the European Union and Canada have adopted transparency initiatives similar to the rules the Commission previously adopted.