The Division of Corporation Finance of the Securities and Exchange Commission has announced that “Tandy” representations are no longer needed in filing review correspondence.
If you have been involved in filing a registration statement any time after 2004, you have probably seen Tandy language. Named after Tandy Corporation, the first company to receive a letter requesting this language, Tandy representations required, in the event that a company requested acceleration of the effective date of a registration statement, to acknowledge in writing that:
- should the SEC or the staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the SEC from taking any action with respect to the filing;
- the action of the SEC or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and
- the company may not assert SEC staff comments and the declaration of effectiveness as a defense in any proceeding initiated by the SEC or any person under the federal securities laws of the United States.
As a result, companies included Tandy representations in letters requesting the acceleration of effectiveness of their registration statements (and sometimes in letters responding to SEC staff comments). Similar acknowledgments were required of filers of various other documents subject to disclosure review by Corp Fin, such as proxy statements, information statements, transaction statements for going private transactions, and tender offer statements.
This practice is no longer required. In the past few days, we have seen Corp Fin comment letters and no-review letters relating to registration statements simply say:
Please refer to Rules 460 and 461 regarding requests for acceleration. We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.
Consistent with its announcement, we expect Corp Fin to include similar language in its letters relating to all other types of filings it reviews.