SEC Staff Updates Elm on Conflict Minerals Disclosures

We spent a very busy and productive two days last week in Washington. One meeting was with the SEC Staff responsible for the conflict minerals disclosure requirements. They were, as usual, generally tight-lipped in responding to our questions, but we did get three interesting bits of information.

  • Readers may recall recent comments from CorpFin Director Keith Higgins about his view that many RCOI descriptions were inadequate. The comments did not make clear if he was referring to those who filed a Form SD only, or the RCOI descriptions included in Conflict Minerals Reports (CMRs). The Staff clarified that the comments were aimed at Form SD filers only, which makes sense. Moreover, we suggest that those filing only the Form SD for CY2014 be prepared for additional scrutiny that is likely to come from other stakeholders as well.
  • Staff gave no insight into when additional FAQs/Interpretive Guidance will be published. But they did state that the next round consists of approximately 10 questions. This puts to rest the rumor that the Staff was working on a very large number of questions, which is one reason for the lengthy delay.
  • A number of issuers have expressed concern about the validity of the Keller and Heckman letter on the Staff’s position that nonmetallic forms of 3TG are not a covered derivative. The Staff stated that the letter does fully represent their formal position on the matter and that issuers should not be wary of relying on it. Further, we note that the letter covers 3TG, not just tin or 3T, so gold salts/plating chemicals are not considered covered derivatives.

And although this isn’t really an update, we think this is important in terms of Higgins’ other comments on the CMRs.

Please let us know if you have any questions or comments.


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