Have you ever wondered, “How do I redact information from agreements filed with the SEC?” Whether it’s something obvious, like a home address or social security number, or something more sensitive, like confidential business information, there are solutions available.
As part of raising capital or submitting periodic reports, public companies are required to publicly file exhibits to their registration statements and periodic reports on EDGAR. At times, those exhibits include information that the company would prefer not appear on a publicly available government database – open to their competitors or bad actors on the dark web and easily searchable. While the tools described here won’t relieve the obligation to file an exhibit, they permit limited redactions for specific categories of information:
| Category | Exhibits | Applicable Rule |
| Information that is clearly an invasion of personal privacy | Any | Reg S-K Item 601(a)(6) |
| Schedules to exhibits, provided no material information is in the schedule | Any | Reg S-K Item 601(a)(5) |
| Limited information from a contract that is (i) not material and (ii) something the company actually treats as confidential | Plan of acquisition or Material contract | Reg S-K Item 601(b)(2)Reg S-K Item 601(b)(10) |
| Portions of exhibits that fall under the substantive requirements of exemptions from the Freedom of Information Act (“FOIA”) | Any | Offerings: Rule 406Periodic reports: Rule 24b-2 |
Below are the details of how each category of redaction works, from least to most administratively burdensome:
Invasion of Personal Privacy
- Can redact information if disclosing it would constitute a clearly unwarranted invasion of personal privacy, such as:
- Bank account number
- Social security number
- Home address
- No extra submission to the SEC required
Schedules to Exhibits
- Not required to include schedule with exhibit if:
- Does not contain information material to an investment or voting decision
- Information is not otherwise disclosed in the exhibit or disclosure document
- Exhibit must contain list of omitted schedules
- Company must provide omitted schedules to the SEC upon request
Limited Information in a Material Contract or Plan of Acquisition (i.e., Merger Agreement)
- Can redact portions of certain exhibits if the information is:
- Not material to an investment or voting decision
- Something the company customarily and actually treats as confidential
- Redactions must be limited and should not be overly broad. It would be highly unusual to redact entire sentences or paragraphs
- This streamlined process was introduced in 2019 as an alternative to the traditional confidential treatment request
- Note that this process used to include a “competitive harm” standard instead of requiring that the company keep the information confidential. The competitive harm standard that had historically been applied in this context was rejected by the Supreme Court in 2019 and the SEC changed this rule accordingly
- Must provide unredacted copies to the SEC upon request with the company’s analysis of materiality and privacy or confidentiality of the redacted information
- Must mark (1) first page of the exhibit and (2) the exhibit index to indicate that information has been redacted according to this rule
Portions of an Exhibit Meeting FOIA Exemption
- Traditional method for confidential treatment requests
- Redactions must be limited and should not be overly broad. It would be highly unusual to redact entire sentences or paragraphs
- Must submit a detailed analysis to the SEC at the time the redacted exhibit is filed, along with an unredacted copy of the exhibit marked to show where the redactions were made
- Must mark (1) first page of the exhibit and (2) the exhibit index to indicate that confidential treatment has been requested for certain information in the exhibit according to the applicable rule
- SEC has the opportunity to review the request:
- If granted, the SEC will issue an order that is posted on EDGAR
- If denied, the SEC will issue an order, deliver the order to the requesting party, and then post the order on EDGAR. If a company’s petition of the denial is not successful, the company must file an unredacted version of the exhibit
- If the SEC’s review of the confidential treatment request is not complete, the SEC will not declare a pending registration statement effective
- After a confidential treatment order (“CTO”) has been issued and later is expiring, the company has a few options, depending on the facts:
- If the previously redacted information no longer requires protection, file an unredacted copy of the exhibit
- If the redacted information can be protected using the streamlined process under Reg S-K Item 601, file a copy of the exhibit using that method for redactions
- If the redacted information still requires protection using a FOIA exemption:
- If the CTO was issued after 2021, submit a short-form extension application to CTExtensions@sec.gov
- If the CTO was issued before 2021, submit a traditional long-form confidential treatment request
This analysis can get complicated when materiality determinations are thrown into the mix. Keep in mind:
- What is interesting to investors is not necessarily material to an investment or voting decision
- Materiality can be triggered by quantitative or qualitative measures
- There is no bright line rule for whether information is material
- If the information will appear in the next Form 10-Q or Form 10-K, it likely should not be redacted
- People inside the business should identify sensitive terms before attorneys are involved
- Advisable to document why the information is private or confidential at the time redactions are made to support the response to any subsequent SEC comments
If you have any questions about redacting exhibits to publicly filed documents, please contact a member of Harter Secrest & Emery’s Securities and Capital Markets group.