Form SD

Form SD (“Specialized Disclosure”) is used to capture specialized disclosure required by the implementation of Sections 1502 and 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). Rule 13p-1 of the Securities and Exchange Act of 1934 (the “Exchange Act”) implements the conflict mineral disclosure provisions of Section 1502 of Dodd-Frank, while Rule 13q-1 implements the extractive issuer disclosure provisions of Section 1504. Rules 13p-1 and 13q-1 have both been subject to legal challenges since they were first adopted in 2012.

Rule 13p-1, Disclosure of Conflict Minerals

Filers reporting with the SEC under the Exchange Act — including domestic, foreign, and smaller reporting companies — will be required to file Form SD under Rule 13p-1, if applicable, beginning May 31, 2014 (for the 2013 calendar year) and annually on May 31 every year thereafter. Form SD will disclose the filer’s use of “Conflict Minerals”1 originating from the Democratic Republic of Congo (“DRC”) or an adjoining country2 (together with the DRC, the “Covered Countries”) provided the Conflict Minerals are “necessary to the functionality or production” of a product manufactured or contracted to be manufactured by the filer.

Item 1.01(c) Determined Unconstitutional

On August 18, 2015, the U.S. Court of Appeals for the District of Columbia Circuit reaffirmed its prior holding that disclosures under Item 1.01(c) of Form SD "violate the First Amendment to the extent the statute and rule require regulated entities to report to the Commission and to state on their website that any of their products have ‘not been found to be "DRC conflict free."'" As a result, the SEC determined it will not recommend enforcement action to the extent that companies only file disclosure under the provisions of paragraphs (a) and (b) of Item 1.01 of Form SD.

Rule 13q-1, Disclosure of Payments by Resource Extraction Issuers

Rule 13q-1 addresses certain payments3 made to a foreign government (including subnational governments) or the U.S. government. It applies to domestic or foreign issuers that are (1) engaged in the commercial development of oil, natural gas, or minerals; (2) make payments to the US federal government or a foreign government related to this commercial development; and (3) required to file an annual report on Form 10-K, Form 20-F or 40-F. Foreign issuers registered pursuant to Rule 12g3-2(b) are exempt. Section 13(q) disclosures must be filed on Form SD within 270 days following the end of the issuer's most recently completed fiscal year. It is expected affected filers will begin filing 13q-1 disclosures on Form SD in 2024 after the two-year transition period outlined in the December 16, 2020 amended rule expires. In addition, Section 13(q) disclosures are deemed furnished to, but not with, the SEC, avoiding Section 18 liability.

The Legal Saga of 13q-1: 10+ Years in the Making

The Commission initially adopted 17 CFR 240.13q-1 and an amendment to Form SD on August 22, 2012. Those rules were vacated by the U.S. District Court for the District of Columbia on July 2, 2013. On June 27, 2016, the Commission adopted a revised version of 17 CFR 240.13q-1 and an amendment to Form SD. On February 14, 2017, the revised rules were disapproved by a joint resolution of Congress pursuant to the Congressional Review Act. Although the joint resolution vacated the 2016 Rules, the statutory mandate under Section 13(q) of the Exchange Act remained in effect. As a result, the SEC adopted 17 CFR 240.13q-1 and an amendment to Form SD under the Exchange Act on December 16, 2020. On July 18, 2023, in accordance with Rule 13q-1 as amended, the SEC updated Form SD and SD/A to allow filers to submit Exhibit 2.01, the Resource Extraction Payment Report.

SD 2.01 Resource Extraction Payment Report

Disclosure under Rule 13q-1 is submitted as the Resource Extraction Payment Report in Exhibit 2.01 to Form SD in traditional XBRL format (not iXBRL). The compilation of this data will require specialized software and likely the assistance of an external service.

Our Form SD 2.01 Solution

Newsfile has developed software that automatically creates the XBRL component for Exhibit 2.01 on Form SD from a completed MS Excel spreadsheet. Simply key in your data and send to us for processing. Contact us to learn more about our solution in time for your first Form SD 2.01 filing in 2024.

Canadian Reporters under the ESTMA (Extractive Sector Transparency Measures Act)

Canadian issuers who are familiar with completing and filing similar payment information under the ESTMA will be pleased to learn of Newsfile's similar preparation process. It is anticipated payment information from the ESTMA spreadsheet can be easily transposed to Newsfile's spreadsheet for filing with the SEC on EDGAR. Note the SEC is asking for additional information as part of Form SD Exhibit 2.01, including Subnational Jurisdiction, Resource, Business Segment, and Extraction Method. Fields are also provided to key in data with respect to In-Kind payments.



1 Conflict Minerals are defined as columbite-tantalite (coltan), cassiterite, gold, wolframite, and derivatives initially limited to tantalum, tin, and tungsten.

2 Adjoining countries are those that share an internationally recognized border with the DRC, which presently includes Angola, Burundi, Central African Republic, the Republic of the Congo, Rwanda, South Sudan, Tanzania, Uganda, and Zambia.

3 Payments that are 1) made to further the “commercial development of oil, natural gas, or minerals”, 2) “not de minimis”, and 3) within the types of payments specified in the rules. The rules define commercial development of oil, natural gas, or minerals to include exploration, extraction, processing, and export, or the acquisition of a license for any such activity. The rules define “not de minimis” to mean any payment (whether a single payment or a series of related payments) that equals or exceeds $100,000 during the most recent fiscal year. The types of payments related to commercial development activities that need to be disclosed include taxes, royalties fees (including license fees), production entitlements, bonuses, dividends, and infrastructure improvements. See amended Rule 13q-1 for a complete summary.


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