Conflict Minerals Rule Implementation Could be Reassessed

February 15, 2017

In a public statement issued January 31, Securities and Exchange Commission (“SEC”) Acting Chairman Michael Piwowar ordered staff members to review whether the SEC’s Conflict Minerals Rule is still applicable and needs additional relief. In April 2014, the D.C. Court of Appeals ruled that part of the required disclosure under the conflict minerals rule was in violation of the First Amendment. In response to the ruling, the Director of the Division of Corporation Finance at the time issued guidance delaying the compliance date for portions of the rule considered unconstitutional. The case was subsequently remanded to the district court for further consideration. Litigation is ongoing, and the SEC staff’s guidance continues to be in effect.

For now, the interim transition period in the rule has expired. The reporting period starting January 1, 2017, is the first in which no issuer is eligible within the terms of that transition period.