Last year, I blogged several times analyzing potential “sleepers” in Dodd-Frank and soliciting ideas from the community. As I define “sleeper,” it should be a provision that applies to many companies. Given the feedback I’ve received, including the comment letters submitted to the SEC so far – and the memos in our “Conflict Minerals” Practice Area – I’m now ready to deem Section 1502 regarding conflict minerals as the Dodd-Frank sleeper for disclosure lawyers. Here is an excerpt from remarks made by Amy Goodman during our recent Dodd-Frank webcast:
From talking to a number of companies in trade associations, people are realizing that this is a huge issue and could impact upwards of 6,000 issuers. While the SEC speculates that only 1,200 will actually file reports, we’re hearing from companies that it’s almost impossible under the current circumstances to determine that minerals do not come from the Congo. And in that case, the SEC proposal would require the report. So I would urge people to take a look at this requirement. I think it’s taken a while for people to realize the seriousness of this requirement. But it could be quite burdensome.
To understand the magnitude of the undertaking that companies face in order to comply with this requirement, check out this memo – which besides providing guidance on how to comply with the provision, it explains supply chain due diligence, what entities like the OECD recommend and what various industry organizations like the EICC-GeSI are doing. There even have been readiness rankings of various industries created, such as this report on the electronics industry from the Enough Project.
Industry Insiders Tells Congress: Don’t Cut the SEC’s Budget
I’ve blogged numerous times about how Congress plays games with the SEC’s budget (here’s a recent blog on the topic) – and how Congress has shamefully limited the SEC’s budget less than a year after it enacted Dodd-Frank. Due to the restrictive nature of the latest Congressional continuing resolution, the SEC has been forced to stop hiring and rein in travel and technology spending. It wasn’t that long ago that the SEC envisioned hiring hundreds of new Staffers this year.
Last week, the Executive Council of the Securities Law Committee of the Federal Bar Association sent this letter to Congressional leaders to ask them to stop the madness. Congress’ continuing resolution ends on March 4th – so by then, Congress will have to decide once more if they will adequately fund the SEC to do its job. Given it’s current limited resources, the SEC already has announced delays for some of its Dodd-Frank rulemakings.
Note that the effective date of the SEC’s final say-on-pay rules has been set as April 4th (it’s tied to the rules being published in the Federal Register). The compliance date is also April 4th.
Webcast Transcript: “The Latest Developments: Your Upcoming Proxy Disclosures – What You Need to Do Now!”
We have posted the transcript for our popular CompensationStandards.com webcast: “The Latest Developments: Your Upcoming Proxy Disclosures – What You Need to Do Now!”
– Broc Romanek