On 14 February 2017, President Trump signed legislation that has the effect of overturning the SEC rule promulgated under the 2010 Dodd- Frank financial reform law that would have required resource extraction issuers to disclose payments they make to governments for the commercial development of oil, natural gas or minerals. The SEC's first attempt at implementing this government payments rule was struck down by US federal courts in 2013, but the SEC adopted a new final rule in June 2016, which was scheduled to come into effect beginning in 2018.
Congress used the Congressional Review Act to enact a joint resolution disapproving the SEC government payments rule, which overturned the rule. While the Congressional disapproval does not repeal Section 1504 of the Dodd-Frank Act, which directs the SEC to implement a rule requiring disclosure of payments made to governments by resource extraction issuers, the joint resolution precludes the SEC from reissuing the rule in substantially the same form unless specifically authorised by a new law.
Although extractive industry companies will not be required to disclose payments they make to governments under SEC rules; to the extent such companies are listed on a stock exchange in Canada or the EU, or have certain other connections with Canada or the EU, they may still be subject to similar reporting requirements in those jurisdictions. Our related client publication can be found at:
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