On February 14, 2017, President Trump signed a joint resolution of the House of Representatives and the Senate eliminating the resource extraction issuer payment disclosure rule of the U.S. Securities and Exchange Commission (SEC).
The action was taken under the Congressional Review Act (CRA), which permits the nullification of any recently finalized federal regulation by a simple majority vote in both chambers, subject to signature or veto by the President. As a result of this action, the resource extraction issuer payment disclosure rule will not go into effect. In addition, the CRA prohibits the SEC from reissuing the rule or adopting a new rule in substantially the same form as the disapproved rule unless authorized by a new law enacted subsequent to the nullification.
The resource extraction issuer payment disclosure rule was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Actand was vacated by the U.S. District Court for the District of Columbia. The new rules were adopted in 2016 and thus were subject to congressional review. The nullified rules would have required resource extraction issuers to disclose on Form SD payments made to governments for the commercial development of oil, natural gas or minerals, beginning with fiscal years ending on or after September 30, 2018.
Canada’s 2014 Extractive Sector Transparency Measures Act, which was modelled on the Dodd-Frank requirement, requires private and public extractive entities active in Canada to publicly disclose, on an annual basis, specific payments made to all governments in Canada and abroad. The elimination of the U.S. rules should not meaningfully affect reporting entities in Canada.