SEC Issues Streamlined Guidance for Confidential Treatment Requests

Kramer Levin Naftalis & Frankel LLP

On Dec. 19, 2019, the Division of Corporation Finance of the SEC updated its guidance with respect to the SEC’s procedures for confidential treatment applications (CTAs). In April 2019, the SEC adopted a streamlined procedure with respect to confidential treatment that permits registrants to file redacted material contracts pursuant to Regulation S-K without applying for confidential treatment of the redacted information, provided the redacted information (i) is not material and (ii) would be competitively harmful if publicly disclosed. The updated guidance addresses the alternative “old” confidential treatment procedure involving the submission of CTAs. The “old” procedure is the only option for some filings, such as Schedules 13D or filings with exhibits requirements in Item 1016 of Reg M-A, which are not covered by the new streamlined procedure.

Companies wishing to utilize the old procedure to apply for confidential treatment should file the required exhibit in connection with the filing, omit all confidential information, and mark the exhibit to indicate where confidential information has been omitted. Along with this, companies should submit a written application to the Office of the Secretary providing an unredacted copy of the document with the confidential portions of the document identified, noting the Freedom of Information Act exemption they are relying on to object to the public release of the information and providing an analysis of how that exemption applies.

Companies should also justify the time period of the confidential treatment and explain why the disclosure of the information is unnecessary for the protection of investors. In addition, the companies should provide a written consent to the furnishing of the confidential information to other government agencies and identify any exchange with which the material is filed.

With respect to extensions of previous CTAs, the guidance notes that filing a redacted exhibit on EDGAR pursuant to the new streamlined procedure will not suffice for the continued confidential treatment of previously filed applications. Consequently, the companies should use the new short-form application for extensions. The guidance states that the short-form application may be used only if the confidential material is the subject of an unexpired order granting confidential treatment.

Additional information on the SEC guidance can be found here.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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