SECURITIES AND EXCHANGE COMMISSION 17 CFR PARTS …

1 SECURITIES AND EXCHANGE COMMISSION . 17 CFR PARTS 240 and 249b [Release No. 34-67716; File No. S7-40-10]. RIN 3235-AK84. CONFLICT MINERALS. AGENCY: SECURITIES and EXCHANGE COMMISSION . ACTION: Final rule. SUMMARY: We are adopting a new form and rule pursuant to Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act relating to the use of conflict minerals. Section 1502 added Section 13(p) to the SECURITIES EXCHANGE Act of 1934, which requires the COMMISSION to promulgate rules requiring issuers with conflict minerals that are necessary to the functionality or production of a product manufactured by such person to disclose annually whether any of those minerals originated in the democratic republic of the congo or an adjoining country.

2 If an issuer's conflict minerals originated in those countries, Section 13(p) requires the issuer to submit a report to the COMMISSION that includes a description of the measures it took to exercise due diligence on the conflict minerals' source and chain of custody. The measures taken to exercise due diligence must include an independent private sector audit of the report that is conducted in accordance with standards established by the Comptroller General of the United States. Section 13(p) also requires the issuer submitting the report to identify the auditor and to certify the audit.

3 In addition, Section 13(p) requires the report to include a description of the products manufactured or contracted to be manufactured that are not DRC conflict free, the facilities used to process the conflict minerals, the country of origin of the conflict minerals, and the efforts to determine the mine or location of origin. Section 13(p) requires the information disclosed by the issuer to be available to the public on its Internet website. DATES: Effective Date: November 13, 2012. Compliance Date: Issuers must comply with the final rule for the calendar year beginning January 1, 2013 with the first reports due May 31, 2014.

4 FOR FURTHER INFORMATION CONTACT: John Fieldsend, Special Counsel in the Office of Rulemaking, Division of Corporation Finance, at (202) 551-3430, 100 F. Street, NE, Washington, DC 20549-3628. SUPPLEMENTARY INFORMATION: We are adopting new Rule 13p-1 1 and new Form SD 2 under the SECURITIES EXCHANGE Act of 1934 ( EXCHANGE Act ). 3. TABLE OF CONTENTS. I. BACKGROUND AND SUMMARY. A. Statutory Provision B. Summary of the Proposed Rules C. Summary of Comments on the Proposed Rules D. Summary of Changes to the Final Rule E. Flowchart Summary of the Final Rule II.

5 DISCUSSION OF THE FINAL RULE. A. Conflict Minerals Definition 1. Proposed Rules 2. Comments on the Proposed Rules 3. Final Rule B. Step One Issuers Covered by the Conflict Mineral Provision 1. 17 CFR 2. 17 CFR 3. 15 78a et seq. 2. 1. Issuers That File Reports Under the EXCHANGE Act a. Proposed Rules b. Comments on the Proposed Rules i. Issuers that File Reports Under Sections 13(a). and 15(d) of the EXCHANGE Act ii. Smaller Reporting Companies iii. Foreign Private Issuers c. Final Rule 2. Manufacture and Contract to Manufacture Products a. Proposed Rules b.

6 Comments on the Proposed Rules i. Manufacture . ii. Contract to Manufacture . c. Final Rule i. Manufacture . ii. Contract to Manufacture . 3. Mining Issuers as Manufacturing Issuers a. Proposed Rules b. Comments on the Proposed Rules c. Final Rule 4. When Conflict Minerals Are Necessary to a Product a. Proposed Rules b. Comments on the Proposed Rules i. Necessary to the Functionality . ii. Necessary to the Production . iii. De Minimis Threshold c. Final Rule i. Contained in the Product ii. Intentionally Added iii. Necessary to the Functionality . iv. Necessary to the Production.

7 V. De Minimis Threshold C. Location, Status, and Timing of Conflict Minerals Information 1. Location of Conflict Minerals Information a. Proposed Rules b. Comments on the Proposed Rules c. Final Rule 2. Filing of Conflict Minerals Information a. Proposed Rules b. Comments on the Proposed Rules c. Final Rule 3. Uniform Reporting Period a. Proposed Rules b. Comments on the Proposed Rules c. Final Rule 4. Time Period for Providing Conflict Minerals Information 3. a. Proposed Rules b. Comments on the Proposed Rules c. Final Rule 5. Conflict Minerals Already in the Supply Chain a.

8 Proposed Rules b. Comments on the Proposed Rules c. Final Rule 6. Timing of Implementation a. Proposed Rules b. Comments on the Proposed Rules c. Final Rule D. Step Two Determining Whether Conflict Minerals Originated in the democratic republic of the congo or Adjoining Countries and the Resulting Disclosure 1. Reasonable Country of Origin Inquiry a. Proposed Rules b. Comments on the Proposed Rules c. Final Rule 2. Disclosures in the Body of the Specialized Disclosure Report a. Proposed Rules b. Comments on the Proposed Rules c. Final Rule E. Step Three Conflict Minerals Report's Content and Supply Chain Due Diligence 1.

9 Content of the Conflict Minerals Report a. Proposed Rules b. Comments on the Proposed Rules c. Final Rule 2. Due Diligence Standard in the Conflict Minerals Report a. Proposed Rules b. Comments on the Proposed Rules c. Final Rule 3. Independent Private Sector Audit Requirements a. Proposed Rules b. Comments on the Proposed Rules c. Final Rule i. Auditing Standards ii. Auditor Independence iii. Audit Objective 4. Recycled and Scrap Minerals a. Proposed Rules b. Comments on the Proposed Rules c. Final Rule i. Definition of Recycled and Scrap Sources . ii. Due Diligence for Conflict Minerals from Recycled and Scrap Sources.

10 4. F. Other Matters III. ECONOMIC ANALYSIS. A. Introduction B. Benefits and Costs Resulting from the Mandatory Reporting Requirement 1. Benefits 2. Cost Estimates in the Comment Letters a. General Comments b. Specific Comments i. Manufacturing Industry Association Comments ii. Electronic Interconnect Industry Association Comments iii. University Group Comments iv. Environmental Consultancy Company Comments v. Other Specific Comments C. Benefits and Costs Resulting from COMMISSION 's Exercise of Discretion 1. Reasonable Country of Origin Inquiry 2. Information in the Specialized Disclosure Report 3.