TheCorporateCounsel.net

Earlier this week, Corp Fin updated CF Disclosure Guidance: Topic No. 7, which was initially rolled out in late 2019 and addressed how and what to provide when submitting a “traditional” confidential treatment request – i.e., outside of the streamlined process also announced in 2019 that allows companies to simply redact immaterial confidential information from exhibits. An explanatory note clarifies that the updates relate to expiring confidential treatment orders.

Per the updated guidance, when an order is about to expire, the available options depend on whether the order was initially issued more than three years ago. The prior update to this guidance had the options turn on whether the order was issued before October 15, 2017. So now, the options are:

1. refile the unredacted exhibit (if the contract is still material but the information is no longer confidential)
2. extend the confidential period pursuant to Rule 406 or Rule 24b-2 (whether a company can submit the short-form extension application to CTExtensions@sec.gov for this depends on whether the order was initially issued less than three years ago; it not, the long form is required) or
3. transition to Reg S-K Item 601(b)(10)’s redacted exhibit rules (if the order was issued more than three years ago and the contract is still material), if possible.

On the Cooley PubCo blog, Cydney Posner explained option 3 more fully as follows:

The streamlined approach allows companies to file redacted exhibits without submitting an explanation or substantiation to the SEC, or even providing an unredacted copy of the exhibit, except upon request of the staff. To accomplish the transition, the company would be required to refile the material contract in redacted form and comply with the legend and other requirements of the streamlined approach (Item 601(b)(10)(iv)). The SEC expects most companies to transition to the streamlined process.

With regard to timing, the staff will not recommend enforcement action if a company refiles a redacted exhibit under this streamlined approach in the company’s first Exchange Act report following the expiration of the CT order. However, if the CT order was initially granted more than three years ago, the company does not have to wait for the order to expire to effect the transition.  Rather, the company can transition by complying with those rules in a new filing or by amending a previously filed document to refile a redacted exhibit.

An important side note for folks who rely on SEC email announcements: You’ve probably noticed that email alerts from the SEC are not always being sent for these and other updates. It seems like the related RSS feed is also not pushing updates. Our team has been relying on frequent checks of Corp Fin’s What’s New page and the SEC’s Upcoming Events page, so if you’re accustomed to getting real-time updates, those pages are your best bet – or you can just wait for our blog!

– Meredith Ervine