On August 22, 2012, the U.S. Securities and Exchange Commission ("SEC") adopted a final rule (the "Final Rule") requiring oil, natural gas and mining companies that file reports with the SEC to disclose annually information on payments made to any foreign government or the U.S. Federal government for the commercial development of oil, natural gas, or minerals, including the type and total amount of such payments made for each project and to each government.

The origin of this new rule, as mandated by Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank"), lies in Congress's desire to increase the transparency of payments made to governments for the commercial development of their oil, natural gas and minerals. According to the SEC, a primary goal of this increased transparency is to "help empower citizens of those resource-rich countries to hold their governments accountable for the wealth generated by those resources."1

The Final Rule was adopted by a 2-1 vote2 following extensive public comment on a proposed rule published by the SEC in December 2010. The Final Rule applies without exception to all "resource extraction issuers," meaning all domestic and foreign issuers that engage in the "commercial development of oil, natural gas or minerals" and are required to file reports under the Securities Exchange Act of 1934, as amended (the "1934 Act").3 The final rule does not include any exceptions for different categories of issuers (e.g., smaller companies or companies that comply with other disclosure regimes), for commercially or competitively sensitive information, or for situations where foreign law may prohibit the required disclosure.

The detailed payment information must be disclosed as an exhibit to an annual report to be filed on new SEC Form SD, no later than 150 days after the end of the issuer's fiscal year, commencing with the first fiscal year ending after September 30, 2013. The information must be electronically formatted using the eXtensible Business Reporting Language (XBRL) interactive data standard.