SEC Streamlines Options For Expiring Confidential Treatment Orders
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On March 9, 2021, the Corporation Finance Division of the
Securities and Exchange Commission (SEC) updated its guidance in Disclosure Topic No. 7 for preserving
confidential treatment of exhibits redacted pursuant to an SEC
confidential treatment order (CTO) that is about to expire.
CTOs are becoming more rare. Most companies obtain confidential
treatment without a CTO by filing redacted copies of the exhibits
in accordance with Regulation S-K Item 601(b)(10)(iv), which allows
companies to redact immaterial, competitively harmful information
without submitting an explanation in advance to the SEC staff
(subject to legending and other requirements, as well as possible
future SEC review). For exhibits not covered by Item 601(b) (such
as Schedule 13D and Regulation M-A Item 1016 exhibits) filers must
obtain a CTO from the SEC.
The prior revision to Disclosure Topic No. 7 (issued September
9, 2020) was significant in that, among other options for
preserving confidential treatment, it announced that the staff
would permit filers to transition certain CTOs to Item 601(b)
treatment (if applicable), even before the CTO had expired.
However, availability of certain options depended on whether the
CTO had been issued more than three years before. See our prior blog post.
The revised Disclosure Topic No. 7 simplifies the prior guidance
by using October 15, 2017 (rather than the three-year lookback) as
a reference point in evaluating the three options for expiring
(1) If the contract remains material and the information
confidential, renew the CTO using a short form application (if the CTO was
initially issued after October 15, 2017) or filing a new, complete
application (if the CTO was initially issued on or before October
(2) If the CTO was initially issued on or before October 15,
2017, and the contract continues to be material, transition to
compliance with Item 601(b), if applicable.
(3) If the contract is material but no longer confidential,
refile the exhibit without redactions.
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