Highlights From CorporateCounsel.net, Meredith Cross on Form SD/CMR Filings

On April 9, 2014, TheCorporateCounsel.net hosted a presentation “Conflict Minerals: Tackling Your First Form SD”.  The featured speaker was Meredith Cross, former Director of the Division of Corporation Finance at the SEC.  Although we did not participate,  some of the highlights of the presentation that were reported to us  are:

  • Issuers should affirmatively document if none of its products contain conflict minerals.
  • As May 31, 2014 is the inaugural filing for Form SD and CMRs, there is no precedent to or standard disclosure.  But it is best to be “in the pack” rather than an outlier – don’t have the longest or the shortest report.  The CMR does not need to be any longer than is necessary for compliance and be clear and concise.  The presenter commented that a 10 page SD/CMR is probably too long.  Our view:  We have heard that one well known firm has a template CMR that is 20+ pages.  Our opinion is in most cases, that length is not warranted and may create unintended consequences.
  • Issuers that are “DRC Conflict Undeterminable” should ensure they explain what they are going to do to improve their due diligence and compliance going forward.
  • SEC isn’t likely to be looking at the calendar year 2013 filings too closely, but issuers need to be cognizant of other audiences, such as the press, general public, customers, investors and NGOs.
  • The CMR information shouldn’t be repeated in the body of the Form SD, and the CMR should be a separate document to Edgar-ize it.
  • Where products need to be described under DRC Conflict Undeterminable, general descriptions will suffice.
  • Where the supplier engagement process is described, issuers will likely focus on the general process rather than on the responsiveness of specific suppliers.

Our thanks to Foley & Lardner for providing us information related to the presentation.

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