Corp Fin’s New “Disclosure Guidance”: Confidential Treatment Requests

RIP, Staff Legal Bulletins No. 1 and 1A. Yesterday’s new “CF Disclosure Guidance Topic No. 7: Confidential Treatment Applications Under Rules 406 & 24b-2” supersedes that guidance. It addresses how and what to provide when submitting a “traditional” confidential treatment request – i.e. outside of the accommodations from earlier this year that now allow companies to simply redact immaterial confidential information from exhibits. The new disclosure guidance also applies to filings where traditional CTRs remain the only available method to protect private information – e.g. Schedule 13D or exhibits required by Item 1016 of Reg M-A.

After filing the exhibit on Edgar with redactions that show where confidential info is omitted, here’s what companies now need to do for written applications (we’ll be posting memos in our “Confidential Treatment Requests” Practice Area):

1. Provide one unredacted copy of the contract required to be filed with the Commission with the confidential portions of the document identified;
2. Identify the Freedom of Information Act[6] exemption it is relying on to object to the public release of the information and provide an analysis of how that exemption applies to the omitted information. Often, this is the exemption provided by Section 552(b)(4)[7] of the FOIA, which protects “commercial or financial information obtained from a person and privileged or confidential.” If this is the case, the Supreme Court’s decision in Food Marketing Institute v. Argus Leader Media, 139 S.Ct. 2356 (2019) addresses the definition of confidential and may be helpful in providing this analysis;
3. Justify the time period for which confidential treatment is sought;
4. Explain, in detail, why, based on the applicant’s specific facts and circumstances, disclosure of the information is unnecessary for the protection of investors. This generally is encompassed in a materiality discussion, addressed below;
5. Provide written consent to the furnishing of the confidential information to other government agencies, offices or bodies and to the Congress;
6. Identify each exchange, if any, with which the material is filed (required in applications under Rule 24b-2 relating to Exchange Act filings only); and
7. Provide the name, address and telephone number of the person with whom the Division should communicate and direct all issued notices and orders.

-Lynn Jokela, TheCorporateCounsel.net December 20, 2019