Securities and Exchange Commission Sets Schedule for Rulemaking on Revenue Transparency

TransparencyOn October 2, the Securities and Exchange Commission (“SEC”) filed a schedule with the U.S. District Court for the District of Massachusetts providing details as to when the agency will seek to issue a final rule on revenue transparency.

As discussed in previous posts, the SEC originally issued a rule in August 2012 implementing Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 1504 directs the SEC to issue rules requiring extractive sector companies (oil, gas, and mining companies) to disclose their payments to foreign governments, as well as the U.S. federal government.

Th SEC’s original rule was vacated in July 2013 by the U.S. District Court for the District of Columbia after a lawsuit challenging the rule was filed by the American Petroleum Institute and other business groups.

Since the rule was vacated little progress has been made. Frustrated by the long delay, Oxfam America filed suit against the SEC seeking to compel it to issue a new rule. On September 2, a federal judge in Boston ordered the SEC to file, within 30 days, an expedited schedule for releasing a final rule.

In its filing last Friday, the SEC proposed to hold a vote adopting a final rule by June 27, 2016. That deadline anticipates that the SEC will hold a vote on a proposed rule before the end of 2015, with a comment period of at least 45 days. As the SEC observed in its filing, this is an aggressive schedule and does not guarantee that any proposed rule will be supported by a majority of the SEC Commissioners.

Despite such reservations, Oxfam America welcomed the proposed schedule, noting that “much of the substantive work for the rule has been done and there is strong support from investors, leading oil and mining companies, and civil society groups” for a U.S. rule that aligns with rules that have been developed in other jurisdictions. Notably, revenue transparency regulations have been enacted by the European Union, Norway, and Canada in recent years.

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