SEC - Conflict minerals position 

May 2:  The Securities and Exchange Commission (SEC) addressed a recent federal appeals court decision and the rule requiring companies to disclosure conflict minerals-related information.

Background

The U.S. Court of Appeals for the D.C. Circuit found that the SEC conflict minerals rule violated the First Amendment by requiring companies to report to the SEC and report on their websites when their products have not been found to be free of conflict materials from the Democratic Republic of the Congo (DRC) and adjoining countries.


Read the D.C. Circuit’s decision [PDF 177 KB].

SEC response

The SEC chair this week stated that the SEC will continue to implement most of the rule’s provisions because the appeals court decision does not justify delaying the effective date.


  • Companies will need to comply with the conflict minerals rule’s due diligence and reporting requirements.
  • An independent private-sector audit will be required only if a company voluntarily elects to describe a product as “DRC conflict free.”

The SEC’s Division of Corporation Finance expects companies to file Form SD and disclosures required by the conflict minerals rule on or before the June 2, 2014 due date for 2013 reporting (because this year, May 31, 2014, falls on Saturday).


The SEC staff will consider the need to provide additional interpretive guidance before the reporting deadline.


Read a May 2014 report [PDF 473 KB] prepared by KPMG LLP: Defining Issues: SEC Discusses Conflict Minerals Rule and Court Ruling

KPMG observation

The SEC on May 2, 2014, announced an order staying the effective date for compliance with the conflict mineral rules.


Read the SEC press release




©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

Share this

Share this

Subscribe

Current and future KPMG clients may subscribe to TaxNewsFlash email alerts.


Email your contact information.

TaxNewsFlash-United States by year