Confidential Treatment Order (CTO)

What Is a Confidential Treatment Order (CTO)?

A confidential treatment order (CTO) is an order that gives confidential treatment to certain reports and information that a company would somehow have revealed in filings with the Securities and Exchange Commission (SEC). The CTO is conceded by the SEC in response to a company's request — known as a confidential treatment request (CTR).

How a Confidential Treatment Order (CTO) Works

A confidential treatment order (CTO) is issued by the SEC and may just be in effect for a certain period of time. In the event that a company wishes to discard certain information from their required filings they can complete a confidential treatment order request, which is checked on by the SEC.

The SEC has key things that it considers non-public information that would hurt the company whenever revealed, like technical specifications and terms of pricing.

Special Considerations

Companies would regularly look for a confidential treatment order to keep information secret that would somehow put it in a difficult spot whenever revealed. Once more, the main key requirement for a company seeking a confidential treatment order is to take care of out a formal request — a confidential treatment request (CTR) — with the SEC.

The request must contain the information the company is hoping to keep and the time span the company is hoping to keep the information. This incorporates giving a date whereupon the CTO would lapse. Just certain types of information can be held confidential and the requesting company must give evidence that disclosure of the information would give it competitive damage.

On the SEC's website, investors can look for CTOs. This incorporates having the option to look through by specific companies. The form type on the SEC website for CTOs is "CT ORDER." The SEC database incorporates CTO orders starting May 1, 2008.

Illustration of a Confidential Treatment Order

For instance, a company might apply for a confidential treatment order by finishing a confidential treatment request to keep information in regards to a pricing arrangement made with a potential acquisition target secret.

This request could be made on the basis that the company's rivals might utilize this information to pursue the target with a more competitive price. Other common things kept confidential incorporate achievement payments and other technical specifications. The information may then be revealed after the CTO lapses.

Features

• A confidential treatment order (CTO) is issued by the Securities and Exchange Commission (SEC) and permits a company to overlook or keep information that would initially be unveiled in SEC filings.
• The SEC issues CTOs in response to a company's request to keep data, known as a confidential treatment request (CTR).
• The SEC just permits certain types of information to be kept confidential, quite, information that, whenever uncovered, could negatively influence the company or its financial position.
• CTOs frequently incorporate non-public information that would hurt the company whenever unveiled, like technical specifications and terms of pricing.
• CTOs must be in effect for a set period of time, where the company will set the expiration date in the CTR.