SEC staff issues additional guidance on exhibit redactions

The SEC staff has issued supplemental guidance regarding its new rules for the redaction of confidential information from certain exhibits, which take effect today. See our blog post here for more detail on the new rules.

Consistent with prior practice, a company redacting information from a material contract must:

  • note in the exhibit list that portions of the exhibit have been omitted;
  • include a legend on the first page of the exhibit alerting readers to the omission of information (a) that is immaterial and (b) whose disclosure would be competitively harmful; and
  • indicate with brackets where information has been omitted.

The guidance confirmed that the staff will continue to refrain from declaring registration statements effective until all staff comments on redactions from related exhibits have been resolved.

Unlike typical correspondence with the staff, comment letters and company responses regarding redactions will not be posted on Edgar, except that the staff will post its initial request for an unredacted copy of the exhibit and the letter confirming that its review is complete.

Companies seeking to maintain the confidentiality of information disclosed in correspondence with the staff – such as explanations of competitive harm – must continue to follow the usual procedures under Rule 83. In a candid admission that keeping track of confidential information can be difficult, the guidance cautions companies not to send unredacted exhibits or related materials directly to individual members of the SEC staff (including those requesting the information) but to follow separately provided instructions for the submission of confidential information.

The guidance notes that companies can continue to make traditional applications for confidential treatment. While we anticipate that most companies will choose to take advantage of the new redaction procedures, a traditional application may be useful in circumstances where the company wants greater certainty upfront about the scope of confidential treatment that will be accorded to it.

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