The Securities and Exchange Commission ("SEC") recently proposed amendments to its rules governing compliance with the Freedom of Information Act ("FOIA") and Privacy Act disclosure requirements. Generally, these Acts require government agencies to release agency records to the public upon request, unless such records are exempt from disclosure, and to establish procedures to facilitate requests for document disclosure, and protection from disclosure under one of the stated exemptions. The proposed amendments to the SEC's FOIA and Privacy Act regulations are both substantive and procedural in nature, and seek to conform those regulations to current statutory, case law and Commission practice. Comments on the SEC's proposal must be submitted before June 21, 1999.
Voluntarily Submitted Information
Currently, Exemption 4 to the FOIA rules accords confidential treatment to "trade secrets and confidential or financial information obtained from a person and privileged or confidential." 5 U.S.C. § 552(b)(4). The SEC's proposed amendments would establish procedures whereby persons voluntarily submitting trade secrets and confidential or financial information may obtain confidential treatment therefore under the decision in Critical Mass Energy Project v. Nuclear Regulatory Commission, 975 F.2d 871 (D.C. Cir. 1992) (en banc), cert. denied, 507 U.S. 984 (1993). Under Critical Mass, such voluntarily submitted information is accorded confidential treatment if it is "of the kind the provider would not customarily release to the public."
Under the proposed rules, submitters would be required to designate the records that they claim are being submitting voluntarily by clearly marking each page "Voluntarily Submitted." In addition, submitters would be required to describe in an accompanying request for confidential treatment the circumstances under which the documents were submitted in sufficient detail to support the claim that the submission was voluntary. Moreover, no ruling on the voluntary nature of the submission would be made unless the SEC received a FOIA disclosure request for the submission.
Confidentiality of Confidential Treatment Requests and Substantiations
The SEC also proposes to make requests for confidential treatment, and accompanying substantiations, confidential, in recognition of the fact that the requests themselves sometimes contain confidential information. According to the SEC, this proposed rule change "would encourage persons requesting confidential treatment to submit full, detailed substantiations to demonstrate that the records should be withheld under Exemption 4."
Expiration of Confidential Treatment Requests
Under the proposed rules, confidentiality requests would expire after five years if not renewed prior thereto. The SEC maintains that this proposed change is desirable because the need for confidential treatment may diminish over time, and notifying submitters of receipts of FOIA requests after lengthy passages of time often entails increased administrative burdens.
Other Procedural Changes
Others of the proposed rule changes address identification of confidential documents. First, the proposed rules would require that all records covered by a confidentiality request be marked "Confidential Treatment Requested by [name]," accompanied by an identifying number and code on each page. Moreover, the confidentiality request itself must identify the records subject to the request using those identifying numbers and codes, e.g., "This request covers the enclosed documents labeled ABC 001 through ABC 099." The SEC stated that this change is desirable because under the current practice, which does not require marking of each document, its FOIA office has "encountered difficulties" in determining which records are covered by the confidential treatment request.
The proposed rules also seek to amend the procedure for confidentiality determinations upon receipt of a FOIA or Privacy Act disclosure request. Under the proposed rules, the relevant SEC office would, upon receipt of a disclosure request, issue to the person requesting confidential treatment a preliminary decision on his request. If confidential status were denied, the submitter would then have ten days to respond or submit a supplemental substantiation. The SEC's final decision would then be issued ten business days after the preliminary decision if no supplemental material were received.
Finally, under the proposed rules, individuals who request access to Privacy Act records would no longer need to have their identities sworn to or notarized. Instead, they would be permitted to submit an unsworn statement in compliance with 28 U.S.C. § 1746. If executed within the United States, such statement must read "I declare (or certify, verify, or state) under penalty of perjury that the foregoing is true and correct." The SEC noted that this change would reflect a codification of the decision in Summers v. Department of Justice, 999 F.2d 570 (D.C. Cir. 1993). *
Amendments to the Commission's Freedom of Information Act, Privacy Act, and Confidential Treatment Rules, 64 Fed. Reg. 19732 (to be codified at 17 C.F.R. pt. 200 (proposed Apr. 22, 1999).