Release No. 33-7211

Release No. 34-36199

60 Fed. Reg. 47691 - Sep. 14, 1995

Confidential Treatment Rules

ACTION: Final rules.

SUMMARY: The Commission is modifying a procedural requirement concerning the number of unredacted copies of material filed with the Secretary of the Commission by issuers applying for a grant of confidential treatment. This modification reduces the number of unredacted copies from three or more copies to one copy.

EFFECTIVE DATE: October 16, 1995.

FOR FURTHER INFORMATION CONTACT: John Bernas at (202) 942-2915 or L. Jacob Fien-Helfman at (202) 244-2997, Division of Corporation Finance, U.S. Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549.

SUPPLEMENTARY INFORMATION: The Commission today announces the adoption of amendments to Rule 406 ¹ under the Securities Act of 1933 (''the Securities Act'') ² and Rule 24b-2 ³ under the Securities Exchange Act of 1934 (''the Exchange Act'') ⁴. Each rule is being revised for the limited purpose of reducing to one copy the unredacted material required to accompany a request for confidential treatment pursuant to either rule. In the case of Rule 406, the filing person is currently required to submit with the request for confidential treatment ''as many copies of the confidential portion, each clearly marked `Confidential Treatment,' as there are copies of the material filed with the Commission.'' In the case of Rule 24b-2, the filing person is currently required to submit with the request for confidential treatment ''as many copies of the confidential portion, each clearly marked `Confidential Treatment,' as there are copies of the material filed with the Commission and with any exchange where such material is required to be filed.'' ⁵ Today's change in Rule 406 and Rule 24b-2 reduces the number of unredacted copies that are required to be submitted to the Secretary of the Commission with the request for confidential treatment to one copy in all circumstances. ⁶

It is anticipated that these revisions will reduce the volume of paper processed and discarded by the Staff without reducing the Division's ability to process filings. This reduction should also increase security for confidential materials since the staff would handle only one unredacted copy. These revisions do not change the number of redacted copies of the materials required to be filed with the Commission's file desk.

These amendments relate solely to ''agency organization, procedure or practice.'' Consequently, their promulgation is not subject to the notice and comment requirements of the Administrative Procedures Act; ⁷ similarly, this rule making is not subject to the requirements of the Regulatory Flexibility Act.⁸

Statutory Basis

The amendments are being adopted pursuant to Section 19 of the Securities Act and Section 23 of the Exchange Act.

List of Subjects in 17 CFR Parts 230 and 240

Registration requirements; Reporting and recordkeeping requirements; Confidential treatment; Securities.

Text of the Amendment

In accordance with the foregoing, Title 17, Chapter II of the Code of Federal Regulations is amended as follows:

[[Page 47692]]

PART 230--GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933

1. The authority citation for Part 230 continues to read, in part, as follows:

Authority: 15 U.S.C. 77b, 77f, 77g, 77h, 77j, 77s, 77sss, 78c, 78l, 78m, 78n, 78o, 78w, 78ll(d), 79t, 80a-8, 80a-29, 80a-30, and 80a-37, unless otherwise noted. * * * * *

2. By amending Sec. 230.406 by revising paragraphs (b)(1) and (b)(3), to read as follows:

Sec. 230.406 Confidential treatment of information filed with the Commission.

* * * * *

(b) * * *

(1) One copy of the confidential portion, marked ''Confidential Treatment,'' of the material filed with the Commission. The copy shall contain an appropriate identification of the item or other requirement involved and, notwithstanding that the confidential portion does not constitute the whole of the answer or required disclosure, the entire answer or required disclosure, except that in the case where the confidential portion is part of a financial statement or schedule, only the particular financial statement or schedule need be included. The copy of the confidential portion shall be in the same form as the remainder of the material filed; * * * * *

(3) The copy of the confidential portion and the application filed in accordance with this paragraph (b) shall be enclosed in a separate envelope marked ''Confidential Treatment'' and addressed to The Secretary, Securities and Exchange Commission, Washington, DC 20549. * * * * *

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 1934

3. The authority citation for part 240 continues to read, in part, as follows:

Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78i, 78j, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78w, 78x, 78ll(d), 79q, 79t, 80a-20, 80a-23, 80a-29, 80a- 37, 80b-3, 80b-4 and 80b-11, unless otherwise noted. * * * * *

4. By amending Sec. 240.24b-2 by revising paragraph (b)(1), designating the flush text following paragraph (b)(2) as paragraph (b)(3), and revising newly designated paragraph (b)(3) to read as follows:

Sec. 240.24b-2 Nondisclosure of information filed with the Commission and with any exchange.

* * * * *

(b) * * *

(1) One copy of the confidential portion, marked ''Confidential Treatment,'' of the material filed with the Commission. The copy shall contain an appropriate identification of the item or other requirement involved and, notwithstanding that the confidential portion does not constitute the whole of the answer, the entire answer thereto; except that in the case where the confidential portion is part of a financial statement or schedule, only the particular financial statement or schedule need be included. The copy of the confidential portion shall be in the same form as the remainder of the material filed; * * * * *

(3) The copy of the confidential portion and the application filed in accordance with this paragraph (b) shall be enclosed in a separate envelope marked ''Confidential Treatment'' and addressed to The Secretary, Securities and Exchange Commission, Washington, DC 20549. * * * * *

Dated: September 7, 1995.

By the Commission.

¹ 17 CFR 230.406.

² 15 U.S.C. 77a et. seq.

³ 17 CFR 240.24b-2.

⁴ 15 U.S.C. 78a et. seq.

⁵ Non-EDGAR filers currently are required to file three or more copies of filed material (See 17 CFR 229.406 and 17 CFR 240.12b-11) while EDGAR filers are required to file one copy of such materials (See 17 CFR 232.309(b)).

⁶ In those instances when an application is denied, a prior grant revoked, or the information otherwise made public, the staff practice is to request that the applicant amend the initial filing to disclose the previously redacted information by contemporaneously filing the required number of copies without redactions.

⁷ 5 U.S.C. 553(b).

⁸ 5 U.S.C. 603, 604.