On September 9, the Division of Corporation Finance (the Division) of the Securities and Exchange Commission amended CF Disclosure Guidance: Topic No. 7 providing guidance to address alternatives for handling expiring “traditional” confidential treatment requests. This guidance amends and supplements Topic No. 7 issued by the Division on December 19, 2019.

The Division notes in Topic 7 that a company that previously has obtained a confidential treatment order with respect to a particular contract have three choices of what to do when the order is about to expire.

First, if the contract is still material, a company can refile it in complete, unredacted form if none of the information needs to be protected from public disclosure.

Second, if the contract continues to be material, and the previously redacted information continues to be confidential, a company may request to extend the period of confidential treatment by filing an application under the Securities Act of 1933 Rule 406 and the Securities Exchange Act of 1934 Rule 24b-2 for Rule 406 or Rule 24b-2 to continue to protect the confidential information from public release.

Third, if it has been more than three years since the initial confidential treatment order was issued, and if the contract continues to be material, a company has the option to transition to compliance with the requirements set out in Regulation S-K Item 601(b)(10) and other parallel rules (the “redacted exhibit rules”). When applicable, the redacted exhibit rules allow for the filing of redacted exhibits without submitting an explanation or substantiation to the SEC, or providing an unredacted copy of the exhibit, except upon request of the SEC staff. The SEC staff notes in Topic 7 that it anticipates that many if not most companies will choose to transition to this process since substantiation of compliance and submission of unredacted materials to the staff is only required upon staff request.

The guidance walks companies through the procedural steps involved with each of these three alternatives.

Topic 7, as amended, is available here.