SEC Staff Guidance on Conflict Minerals Disclosure for Small Entities

The SEC Division of Corporation Finance released a small entity compliance guide on the new rule applying to companies using conflict minerals. Congress enacted Dodd-Frank Section 1502 from concerns that the exploitation and trade of conflict minerals by armed groups is helping to finance conflict in the Democratic Republic of the Congo ("DRC") region.

Section 1502 amends the Securities Exchange Act of 1934 to add Section 13(p), which directs the Commission to issue rules requiring companies to disclose their use of "conflict minerals" if those minerals are "necessary to the functionality or production of a product." The new rule covers the following topics:

• Contracting to manufacture;
• Determining whether Conflict Minerals originated in the covered countries;
• What must be included in the Conflict Minerals Report;
• DRC Conflict Free;
• Not found to be "DRC Conflict Free";
• DRC Conflict Undeterminable;
• Recycled or scrap due diligence;
• Independent private sector audit;
• Form for and timing of disclosure.

View guide in full here (links externally to SEC website).See also: GAO Report on Conflict Minerals Disclosure Rule.