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SEC proposes rule on modernization of property disclosures for mining registrants

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Jun 16, 2016

On June 16, 2016, the Securities and Exchange Commission (SEC) issued a proposed rule, "Modernization of Property Disclosures for Mining Registrants."

The proposal revises the property disclosure requirements for mining registrants and related guidance “by aligning them with current industry and global regulatory practices and standards.” The purpose of the revisions is to help investors understand registrants’ mining properties so that they can “make more informed investment decisions.”

Foreign private issuers that use Form 20-F to file their Exchange Act registration statements and annual reports, or that refer to Form 20-F when filing their Securities Act registration statements on Forms F-1 and F-4, are generally not subject to Regulation S-K.

Because the SEC believes that the same property disclosure requirements should apply to both domestic and foreign mining registrants, the proposed rules would amend Form 20-F.

The proposed conforming changes are intended to ensure consistency in the mining disclosures of SEC filers across both domestic registrants and foreign private issuers (other than Canadian issuers that use the Multijurisdictional Disclosure System filing on Forms 40-F, F-10, F-7, F-8 or F-80). The proposed changes would particularly affect Canadian registrants that report pursuant to Form 20-F and are currently permitted to provide additional mining disclosure under NI 43-101 pursuant to the “foreign or state law” exception under Guide 7 and the “foreign law” exception under Form 20-F. The proposed rules would eliminate this exception and may thus increase compliance costs for these registrants to the extent that, as discussed previously, the proposed disclosure requirements differ from NI 43-101.482 That said, to the extent that these differences in disclosure requirements also provide expected incremental benefits, these benefits would mitigate any increase in compliance costs.

Comments on the proposed rule are due 60 days after the date of its publication in the Federal Register.

Review the press release and proposed rule on the SEC’s Web site.

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