Wednesday, August 27, 2014

Banking Committee Ranking Member Urges SEC to Quickly Reform IG for Mining Companies

Senator Mike Crapo (R-ID), Ranking Member on the Banking Committee, urged the SEC to expeditiously update and reform the Commission’s Industry Guide 7, which contains the basic disclosure policy for public mining companies. In a letter to SEC Chair Mary Jo White, also signed by Senators Dean Heller (R-NV) and Jon Tester (D-MT), he said that it is vital for the SEC to move forward in the near-term to realign the U.S. reporting regime for mining companies both for the protection of investors and the removal of competitive harm to domestic mining operations. The letter noted that the text for Guide 7 was first formulated and published over 30 years ago and has not been updated since.

The Ranking Member referenced a speech by Chair White on October 15, 2013 in which she said that the SEC should consider reforming the industry disclosure guides, Guide 7 in particular. The Senators agree with the Chair’s concern that all of these industries have changed drastically since the Guides were published and yet the Guides have not often been revised.

With respect to Guide 7, Chair White also questioned whether the disclosure guidance applicable to public mining companies should be modeled on the international standards given that the international mining community actually has developed comprehensive standards for reporting resources and reserves and several foreign jurisdictions use these standards in their securities laws.

Obviously, said Senator Crapo, this is an important topic for the Commission and its Chair and the Senators want to know what progress the Commission has made in the review of Industry Guide 7 and other Industry Guides. Specifically, they asked for an update on the status of, and a timeline for, the SEC's overall industry guide review, and in particular Guide 7. They would also like a status report and a timeline on any outreach the SEC has done, or plans to do, to the mining industry and other stakeholders, including investors, to get their thoughts on what would be helpful disclosure with respect to the mining industry. Finally, the Senators want an update as to the status of, and a timeline for, when the SEC hopes to provide the revised industry guides to the public.

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