SEC Issues Guidance on Redaction of Exhibits Containing Immaterial, Competitively Harmful Information

April 15, 2019

As discussed elsewhere in this edition of The Ticker, the SEC recently adopted final rules to modernize and simplify certain disclosure requirements in Regulation S-K, including amendments that will allow registrants to omit confidential information from most exhibits without filing a confidential treatment request. On April 1, the SEC issued guidance to assist registrants in complying with the new rules and procedures governing the redaction of exhibits.

In order to file a redacted exhibit without filing a confidential treatment request, the guidance specifies that registrants must: (i) mark the exhibit index to indicate that portions of the exhibit have been omitted, (ii) include a prominent statement on the first page of the redacted exhibit that certain identified information has been excluded from the exhibit because it both (A) is not material and (B) would be competitively harmful if publicly disclosed, and (iii) indicate with brackets where the information has been omitted from the filed version of the exhibit.

The SEC intends to review filings for compliance with the new rules but will do so separately from the regular comment and response process “to minimize the risk of inadvertent public disclosure of competitive information.” Consistent with past practice, the SEC will require registrants to “resolve any questions relating to redacted exhibits in registration statements before submitting a request for acceleration of the effective date.”

The guidance concludes by addressing transition issues. A registrant with a pending confidential treatment request may, but is not required to, withdraw its pending application and amend its filing to conform to the new rule requirements.

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