The SEC and Confidential Treatment

By | 09/09/2019 | 2:25 pm ET

All companies have information they want to protect. Trade secrets, financial documents, and customer information to name a few. However, federal laws and regulations require companies to provide the SEC with certain information.

Recently, changes have been made to relax the amount of confidential information companies must file. New amendments made to Regulation S-K now allow companies to redact information that could threaten their ability to compete in the market place, and is non-material. Before these amendments, companies wanting to withhold required information from the SEC would have to file a Confidential Treatment Request.

A Confidential Treatment Request, as per Rule 83, is a request by a company to protect information from the Freedom of Information Act (FOIA). The SEC, however, can request the company to provide the information for review. All types of the Confidential Treatment Request must be submitted in paper form, not e-mail. The SEC provides a secure fax line and address specifically for submitting Confidential Treatment Requests. The amendments, which took effect April 2,2019, did not eliminate Confidential Treatment Requests, but streamlined the process for obtaining them. Companies can also extend existing CTR’s with a new one-page form that can be emailed directly to the SEC.

It is importation to remember that the SEC still requires some information that could be seen as proprietary to be made, or remain, publicly available. As per regulations S-X and S-K, any company in the United States that goes public cannot withhold information on:

  • Patents, trademarks, and licenses along with how long they last and how they affect the company.
  • Executive compensation.
  • The identity of shareholders with ownership of 5% or more of the company.

Naming a few. However, a company could be granted a Confidential Treatment Request for information on:

  • Business strategies.
  • Terms for pricing.
  • Technical schematics.

As examples. Any application for a Confidential Treatment Request will require the information be provided for review by the SEC. However, with the new amendments the process will be much easier for all applicants.

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