SEC seeks to increase ‘transparency’ through release of disclosure letters

The Securities and Exchange Commission yesterday announced that it will begin publishing on its Web site comment letters and response letters relating to disclosure filings made after Aug. 1, 2004. The letters will be released on a filing-by-filing basis through the SEC’s EDGAR system.

The SEC first announced its plan to release these letters last June. It explained at the time:

“Disclosure filings made with the SEC are in certain cases selected for review by staff. For many years, the Division of Corporation Finance and the Division of Investment Management have provided filers with comments on filings where they believe the filing could be improved or enhanced. These comments generally are sent after a filing is made with the Commission under the Securities Act of 1933, the Securities Exchange Act of 1934, the Trust Indenture Act of 1939 or the Investment Company Act of 1940. The letters set forth staff positions on a particular filing only and do not constitute an official expression of the Commission’s views. Further, these letters set forth the staff’s position, are limited to the specific facts of the filing to which they apply, and do not apply to other filings.

“Staff review of a filing may involve several rounds of comments from the staff and a similar number of responses from the filer. Upon resolution of all issues relating to a filing review, the staff advises the filer that its review is complete. The SEC currently releases staff comment letters and responses to these comment letters only in response to a Freedom of Information Act request after the staff review is complete.

“In recent months, an increasing number of our comment letters and filer responses to them are being released publicly through the FOIA process, but only to those persons who make FOIA requests for them. We believe it is appropriate to expand the transparency of the comment process so that this information is available to a broader audience, free of charge. We intend to do this through the Commission’s Public Dissemination Service and on our website at www.sec.gov (EDGAR data on the SEC Public Website). Public access to this correspondence will no longer require a FOIA request.”