
[Federal Register Volume 79, Number 88 (Wednesday, May 7, 2014)]
[Notices]
[Page 26297]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10437]


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SECURITIES AND EXCHANGE COMMISSION

[File No. S7-40-10; Release No. 72079]


Securities Exchange Act of 1934; In the Matter of Exchange Act 
Rule 13p-1 and Form SD; Order Issuing Stay

May 2, 2014.
    On April 14, 2014, the United States Court of Appeals for the 
District of Columbia Circuit issued a decision in National Association 
of Manufacturers, et al. v. SEC, et al., No. 13-5252 (D.C. Cir. April 
14, 2014). That case involved a challenge to Exchange Act Rule 13p-1 
and Form SD.\1\ The rule and form were adopted pursuant to Section 
13(p) of the Securities Exchange Act of 1934, which was added by 
Section 1502 of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act.\2\ The Court of Appeals rejected all of the challenges 
to the rule based on the Administrative Procedure Act and the Exchange 
Act. The Court of Appeals, however, concluded that Section 13(p) and 
Rule 13p-1 ``violate the First Amendment to the extent the statute and 
rule require regulated entities to report to the Commission and to 
state on their Web site that any of their products have `not been found 
to be `DRC conflict free.' ' '' \3\ In so concluding, the Court of 
Appeals specifically noted that there was no ``First Amendment 
objection to any other aspect of the conflict minerals report or 
required disclosures.'' \4\ In an order issued concurrently with the 
decision, the Court of Appeals withheld the issuance of its mandate 
until seven days after disposition of any timely petition for rehearing 
or petition for rehearing en banc. As a result, the earliest date on 
which the Court of Appeals's mandate is likely to issue is June 5, 
2014. Under Rule 13p-1, the first reports are due to be filed on June 
2, 2014.
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    \1\ Conflict Minerals, 77 FR 56,274 (Sept. 12, 2012) (codified 
at 17 CFR 240, 249b).
    \2\ Public Law 111-203, 124 Stat. 1376, 2213 (2010).
    \3\ Slip. Op. at 23.
    \4\ Slip. Op. at 17 n.8.
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    Section 705 of the Administrative Procedure Act provides that an 
agency may postpone the effective date of an action taken by it pending 
judicial review when it finds that ``justice so requires.'' 5 U.S.C. 
705. In light of the Court of Appeals's decision, the Commission finds 
that it is consistent with what justice requires to stay the effective 
date for compliance with those portions of Rule 13p-1 and Form SD that 
would require the statements by issuers that the Court of Appeals held 
would violate the First Amendment. Among other things, a stay of those 
portions of the rule avoids the risk of First Amendment harm pending 
further proceedings. Moreover, limiting the stay to those portions of 
the rule requiring the disclosures that the Court of Appeals held would 
impinge on issuers' First Amendment rights furthers the public's 
interest in having issuers comply with the remainder of the rule, which 
was mandated by Congress in Section 1502 and upheld by the Court of 
Appeals.
    Accordingly, it is ordered, pursuant to Section 705 of the 
Administrative Procedure Act, that the effective date for compliance 
with those portions of Rule 13p-1 and Form SD subject to the Court of 
Appeals's constitutional holding are hereby stayed pending the 
completion of judicial review, at which point the stay will terminate. 
For more detailed guidance regarding compliance, issuers should refer 
to the statement issued by the staff on April 29, 2014, and any further 
guidance subsequently provided.\5\
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    \5\ On April 30, 2014, the National Association of 
Manufacturers, the Chamber of Commerce, and Business Roundtable 
filed a motion requesting that the Commission stay Rule 13p-1 in its 
entirety. In accordance with the above order, the motion is denied.

    By the Commission.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-10437 Filed 5-6-14; 8:45 am]
BILLING CODE 8011-01-P


