In light of health and safety concerns related to the pandemic, the SEC staff recently announced the availability of a temporary secure file transfer process for the submission of supplemental materials pursuant to Rule 418 under the Securities Act of 1933 or Rule 12b-4 under the Securities Exchange Act of 1934 and information subject to Rule 83 confidential treatment requests (“CTRs”).
From time to time companies provide supplemental materials to the SEC staff, typically when responding to SEC comments. Rule 418 provides broad authority to the SEC and its staff to request information concerning a company, its registration statement, the distribution of its securities and market or underwriter activities. Rule 12b-4 provides similar authority with respect to registration statements and periodic or other reports. Both rules require the SEC to return supplemental materials upon request, provided the request is made at the time they are furnished to the staff and return of the materials is consistent with the protection of investors and FOIA. Rule 418 also requires that the materials not have been filed in electronic format.
SEC Rule 83 provides a procedure by which persons submitting information may include a CTR for portions of that information where no other confidential treatment process applies. Typically, this is utilized when companies provide responses to SEC staff comments. Rule 83 generally requires the submission of the information covered by the CTR separately from that for which confidential treatment is not requested, appropriately marked as confidential, and accompanied by a separate written request in paper format for confidential treatment. Although Rule 83 requires that CTRs be submitted in paper format, the rule also permits the designation of alternative procedures.
According to the announcement:
- The SEC staff will retain information received through the secure file transfer process in accordance with the appropriate records retention schedules. It will not retain supplemental information subject to Rule 418 or Rule 12b-4 received through the secure file transfer process after the materials have been reviewed.
- If you wish to submit supplemental information or information subject to a Rule 83 CTR, you should contact the staff member associated with the related matter to request the initiation of a secure file transfer. Such materials should not be sent through email. The secure file transfer process allows for electronic submission to the staff of Rule 83 CTRs together with the confidential information during this temporary accommodation. A copy of the Rule 83 CTR (but not the confidential information itself) must also be submitted to the SEC Office of FOIA Services pursuant to its guidance.
- Submitters may continue to send supplemental materials and information subject to a Rule 83 CTR to the SEC mailroom. There will, however, be delays in the processing of such documents.
- The secure file transfer process is not available for confidential treatment applications submitted pursuant to Securities Act Rule 406 or Exchange Act Rule 24b-2. Rules 406 and 24b-2 require such applications be filed in paper with the SEC Office of the Secretary.
As a reminder, when utilizing Rule 418 or 12b-4, companies should:
- Strictly follow any instructions for supplemental materials in the SEC comment letter.
- Include an explanation as to why investors are not harmed and, consistent with FOIA, the risk for competitive injury to the company.
- Consider whether to include a Rule 83 CTR for the supplemental materials as a fallback, in the event the SEC staff might otherwise disagree with returning them.
This material is not comprehensive, is for informational purposes only, and is not legal advice. Your use or receipt of this material does not create an attorney-client relationship between us. If you require legal advice, you should consult an attorney regarding your particular circ*mstances. The choice of a lawyer is an important decision and should not be based solely upon advertisem*nts. This material may be “Attorney Advertising” under the ethics and professional rules of certain jurisdictions. For advertising purposes, St. Louis, Missouri, is designated BCLP’s principal office and Kathrine Dixon (kathrine.dixon@bclplaw.com) as the responsible attorney.
FAQs
Under Rule 83, the submitter of information must mark each page with "Confidential Treatment Requested by [name]" and an identifying number and code, such as Bates-stamped number. The words "FOIA Confidential Treatment Request" must appear on the top of the first page of the request.
What is a confidential treatment request for FOIA? ›
The submitter's request must be in writing, must be clearly marked “FOIA Request for Confidential Treatment” and must include the submitter's name, address and telephone number.
What is an order granting confidential treatment under the Securities Exchange Act of 1934? ›
A confidential treatment order (CTO) is issued by the Securities and Exchange Commission (SEC) and allows a company to omit or withhold information that would originally be disclosed in SEC filings. The SEC issues CTOs in response to a company's request to withhold info, known as a confidential treatment request (CTR).
What is the SEC rule for FOIA? ›
SEC Rule 83 (17 CFR 200.83) provides a confidential treatment procedure for those submitting information to the agency to ask that it be withheld when requested under the Freedom of Information Act.
What is the Federal Rule of Evidence 83? ›
Rule 83, which has not been amended since the Federal Rules were promulgated in 1938, permits each district to adopt local rules not inconsistent with the Federal Rules by a majority of the judges. The only other requirement is that copies be furnished to the Supreme Court.
What information should be treated as confidential? ›
Personal information (information about an identifiable individual) should be treated as confidential unless it is public information or unless there is consent for disclosure from the individual.
What is a confidential SEC filing? ›
With the confidential route, companies submit the S-1/F-1 under form DRS to the SEC privately, delaying public release of sensitive information until they get closer to IPO.. Companies have until 15 days before their IPO roadshow to make the information publicly available.
What are the SEC rules? ›
SEC regulations are a set of rules and guidelines that govern the securities industry. These rules protect investors and promote fair and orderly markets.
What is the difference between the 1933 Act and the 1934 Act? ›
What Is the Difference Between the 1933 and 1934 Securities Acts? The Securities Exchange Act of 1933 regulates newly issued securities, such as those being sold through an initial public offering. The Securities Exchange Act of 1934 regulates securities that are already being actively traded on the secondary market.
What types of things cannot be requested through FOIA? ›
Information/data that is NOT covered by the Freedom of Information Act (FOIA) includes:
- Non-agency records and personal records.
- Public requests for access to physical artifacts or scientific samples (e.g. core samples, sediment, rocks, fossils, specimen samples, blood samples).
If the information you want is not publicly available, you can submit a FOIA request to the agency's FOIA Office. The request simply must be in writing and reasonably describe the records you seek.
What is an example of a FOIA request? ›
Dear [custodian of records]: I am requesting access to records in possession or control of the [insert government entity] for the purposes of inspection and copying pursuant to the California Public Records Act, California Government Code § 7920.000 et seq.
What is federal rule Civil Procedure 83? ›
No sanction or other disadvantage may be imposed for noncompliance with any requirement not in federal law, federal rules, or the local rules unless the alleged violator has been furnished in the particular case with actual notice of the requirement. (As amended Apr. 29, 1985, eff.
What is the confidential treatment process? ›
How to apply for confidential treatment
- File the exhibit on EDGAR without the confidential information.
- Submit a written application.
- Materiality of the omitted information.
- Excessive omissions.
- Refile the unredacted exhibit.
- Extend the confidential period pursuant to Rules 406 or 24b-2.
The confidential information exemption is not subject to a public interest test under the Act, but under the existing law of confidence it has always been possible to argue that it is in the public interest to make the disclosure.
Is not to disclose confidential information a duty? ›
Nondisclosure obligations
In general, recipients of confidential information are subject to an affirmative duty to keep the information confidential, and not to disclose it to third parties except as expressly permitted by the agreement. The recipient's duty is often tied to a specified standard of care.
