Subject: File No. S7-25-15
From: Keith Paul Bishop
Affiliation: Former California Commissioner of Corporations

January 5, 2016

I have the following comments with respect to the Securities and Exchange Commission's proposed adoption of Rule 13q-1 and amendments to Form SD:

1. The "not de minimis" formulation reflects poor drafting. While I recognize the "not de minimis" formulation is found in Section 13q of the Securities Exchange Act of 1934, the proposed rule would be much clearer if it simply defined "payment" to mean, among other things, as a single payment or a series of related payments, that equals or exceeds $100,000, or its equivalent in the issuers reporting currency, during the fiscal year covered by this Form SD."

2. The proposed definition of "payment", while it tracks the statute, is circular because it defines a "payment" as "a payment".

3. The Commission's proposal is unclear as to whether the $100,000 is to be calculated based on the currency conversion in effect at the time of payment or at the end of the period covered by the report. Because changes in the currency conversion rates could affect whether the threshold has been met, the Commission should clarify when the not de minimis test should be applied.

4. The Commission is inconsistent in its use of "shall" and "must". For example, the first sentence of Item 2.01(a) of Form SD states "A resource extraction issuer SHALL file an annual report on Form SD . . ." while the second sentence states "The issuer MUST provide a statement in the body of the Form SD . . .". If the Commission intends for a requirement to be mandatory, it should use "must" rather than "shall".

5. The Commission has not defined "mineral", an indefinite term that can have a variety of meanings. For example, "mineral" is often understood to refer to homogeneous crystalline substances. This definition would exclude gravel or non-crystalline rocks. Others use the term "mineral" to refer to naturally occurring inorganic solids. Notably, this definition would exclude coal, which is principally comprised of carbon. Because Section 13(q) also refers to a liquid (oil) and a gas (gas), the term "mineral" at a minimum would appear to refer to a class of solid structures.

I am an attorney in private practice in Irvine, California. I am writing in my individual capacity and not on behalf of my law firm or any of my law firm's clients.

I previously served as California's Commissioner of Corporations and in that capacity administered and enforced California's securities laws. I have taught as an adjunct professor at the University of California, Irvine and Chapman School of Law. I have also served as Co-Chairman of the Corporations Committee of the Business Law Section of the California State Bar and Chairman of the Business and Corporate Law Section of the Orange County (California) Bar Association. I am a practice consultant to the leading treatise on Californias securities laws, Marsh Volk, PRACTICE UNDER THE CALIFORNIA SECURITIES LAWS.