SEC Updates Guidance On Confidential Treatment Requests

For the first time since December 2019, the SEC has updated its guidance on the process associated with submitting a confidential treatment request (“CTR”).  The March 2019 guidance update was triggered by the passing of the Fixing America’s Surface Transportation Act (“FAST Act”) which allows companies to redact confidential information from most material agreement exhibits without filing a CTR, including omitting schedules and exhibits to exhibits.  The FAST Act also allows a company to redact information in material agreements that is both (i) not material, and (ii) competitively harmful if disclosed without the need for a CTR.  For a discussion on the December 2019 guidance see HERE.  At the end of this blog, I include a refresher on the streamlined, self-executing rules for omitting confidential information from material contract exhibits to SEC filings.

The latest updated guidance flows through the process in general, so the below discussion includes all such updates.   

Confidential Treatment Requests Under Rules 406

The Division of Corporation Finance’s Disclosure Review And Comment Process

Those that regularly read my blog know that I sometimes like to go back to basics. This blog will revisit and discuss the SEC’s Division of Corporation Finance (“CorpFin”) comment and review process. Back in March 2016, I wrote about the SEC comment and review process, including a description of the internal review process, review levels and breakup of industry sector reviewers. That blog can be read HERE.  Since that time, the SEC has eliminated the Tandy Letter requirement. See HERE. Furthermore, on March 22, 2018, CorpFin updated its “Filing Review Process” page on the SEC website.

At the end of each calendar year, the big four accounting firms generally publish studies on CorpFin’s Comment Priorities. Their studies, and other recent publications, uniformly found that the number of comments, especially in a registration process, has dramatically declined.  I have noticed this trend as well in my practice.

Also consistent in reports is a list of recent