The adopted rules will:

• add a provisional exemption for smaller reporting companies and emerging growth companies
• mandate public reporting of company-specific, project-level payment information
• define the term “project” to require disclosure at the national and major subnational political jurisdiction, as opposed to the contract, level, recognizing that more granular contract-level disclosure could be used to meet the conditions of the rule
• incorporate two new provisional exemptions for circumstances in which a foreign law or a pre-existing contract prohibits the required disclosure
• define “control” to exclude entities or operations in which an issuer has a proportionate interest
• limit the liability for the required disclosure by determining the payment information to be furnished to the SEC but not filed with the agency
• include relief for issuers that have recently completed their U.S. initial public offerings
• extend the deadline for providing the payment disclosures

A resource extraction issuer must also submit payment information in XBRL using a taxonomy of defined reporting elements. As per the new rule, these tags apply to any payment required to be disclosed, including for example:

• the project of the resource extraction issuer to which the payments relate
• the financial period during which the payments were made
• the total amounts of the payments, by payment type
• the currency used to make the payments
• the business segment of the resource extraction issuer that made the payments
• the government that received the payments, and the country in which the government is located

Rule 13(q)(1) will go into effect 60 days following publication in the Federal Register. After a two-year transition period, an issuer must annually submit Form SD within 270 days after the end of its most recently completed fiscal year. For example, if the rules become effective on March 1, 2021, the compliance date for an issuer with a December 31 fiscal year-end would be Monday, September 30, 2024 (which is 270 days following its fiscal year end of December 31, 2023).

For more information regarding the new rules, contact Elliot Staffin, Special Counsel, Office of Rulemaking, Division of Corporation Finance, by phone at (202) 551-3430 or by mail at US Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.

Please note that Novaworks is intending on supporting the new XBRL changes for Form SD. For more information, check back here at the blog at novaworkssoftware.com or contact support.

Sources:

SEC Adopts Final Rules for the Disclosure of Payments by Resource Extraction Issuers (sec.gov)

Disclosure of Payments by Resource Extraction Issuers (sec.gov)

Order Recognizing the Resource Extraction Payment Disclosure Requirements of the European Union, the United Kingdom, Norway, and Canada as Alternative Reporting Regimes that Satisfy the Transparency Objectives of Section 13(q) under the Securities Exchange Act of 1934 (sec.gov)