Defining Issues | August 2016
 

Companies face new SEC rules on extraction industry payments

KPMG reports on SEC’s adoption of Rule 13q-1 and amendment to Form SD. The SEC’s final ruling on the disclosure of payments by resource extraction issuers provides some relief to address earlier concerns raised.

Applicability

SEC Release No. 34-78167

  • Resource extraction industry
  • Company in the resource extraction industry who pays governments (foreign or domestic) for the exploration and development of oil, natural gas or mineral resources

Effective dates:

  • Resource extraction companies must comply with the rules beginning in fiscal years ending on or after September 30, 2018
  • May 30, 2019 – Required compliance date for calendar year-end 2018 annual filings

Key impacts

  • We recommend advance preparation for the disclosures, including asking the SEC for an exemption if a local law prohibits the disclosures
  • Compliance may require significant effort, including categorizing existing extraction assets into projects, and evaluating what systems and process changes will be required to capture payments made at the project level

Report contents

  • Key changes from the SEC’s proposal
  • Effective date

 

 

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