Washington (June 28, 2004) -- In an effort to expand transparency, the Securities and Exchange Commission said it will make public later this summer the comment letters it sends to public companies related to their disclosure filings with the agency.

The commission will make available disclosure filings that are selected for review by staff members in its division of corporation finance and division of investment management. The staff sometimes provides filers with comments on filings where they believe the filing could be improved or enhanced. The letters set forth staff positions on a particular filing, don't apply to other filings and don't constitute an official expression of the commission's views, the SEC noted.

The SEC currently releases staff comment letters and responses only in response to Freedom of Information Act requests after the staff review is complete. But the SEC said that it is seeing an increase in those FOIA requests.

"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," the commission said in its announcement.

The SEC intends to make selected filings relating to disclosure filings made after August 1 available through the EDGAR portion of its Web site, where company filings with the SEC are housed.

SEC rules allow filers to request confidential treatment for some portions of a written response to a staff comment letter. While the commission said it will release comment and response letters without a FOIA request, it will release only the redacted version of response letters where there is a request for confidential treatment. Anyone wishing to seek release of portions of a response letter that are the subject of a confidential treatment request must submit a FOIA request. However, the SEC noted that it will continue to question requests for confidential treatment that are on their face "overly broad" and reminded companies that there must be an "appropriate basis" for a request for confidential treatment.

Since it will make all comment letters and responses publicly available, either in response to FOIA requests or under the new system, the SEC said it will ask all companies whose filings are reviewed for a "Tandy" letter -- a representation in writing that they will not use the SEC's comment process as a defense in any securities-related litigation against them.

The SEC said it is welcoming comments on the process. Comments can be filed electronically at http://www.sec.gov/news/press.shtml or by e-mailing rule-comments@sec.gov with the subject line File Number S7-28-04. The commission will post all comments on its Web site.

-- WebCPA staff

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