Speak To A Live Person: 888.302.4594 Request A Demo

The NASAA and the SEC Enter into a MOU Regarding Non-Public Information

Saturday, March 11, 2017

On February 17, 2017, the North American Securities Administrators Association (“NASAA”) and the Securities and Exchange Commission (“SEC”) entered into a Memorandum of Understanding (“Memorandum”) regarding the treatment of non-public information. The purpose of the Memorandum is to assist the NASAA and the SEC in evaluating and monitoring amended exemptions at the federal and state level.

Two of the key inquiries addressed by the Memorandum are, “What constitutes non-public information?” and “Who will determine the status of information as public or non-public?” The Memorandum defines “non-public information” as “. . . data, information, or reports submitted, received, or shared among the Parties pursuant to [the Memorandum of Understanding].” In the event that a question arises as to the nature of information being shared, the party receiving the information will contact the party providing the information in an effort to determine whether the information is public or non-public. The party receiving the information will then treat it as non-public if that is determined to be the case by the party providing the information.

One significant provision of the Memorandum details that when one of the parties provides non-public information to the other party, the receiving party will presume that the information provided is confidential and will continue to maintain the confidentiality of the information. The confidentiality of the information is not required to be maintained only if the providing party designates so in writing.

The Memorandum outlines who may receive non-public information. Only officials and employees of the party receiving the information may possess it if they need to know the information in the performance of their official job duties. The Memorandum also details that the SEC may use non-public information provided to it “. . . from NASAA to inform any investigation, examination, proceeding, or civil action.” However, in executing the Memorandum, the SEC agreed that it will not initiate an action or proceeding based on the non-public information unless it has given prior notice to, and received written consent from the NASAA.

For additional information regarding how the Memorandum addresses requests for non-public information from third parties, including Congressional Committees, click here.

About Red Oak Compliance Solutions

Red Oak Compliance Solutions is the global advertising review software of choice in the financial services industry. It is a comprehensive suite of SEC 17A-4 compliant features that are 100% books and records compliant and provides clients with 35% faster approvals and 70% fewer touches or better. We also offer Smart Review(SM), which solves for the storage and maintenance of disclosures, helping firms reduce risk, decrease review times, and increase the speed of distribution of marketing materials. Smart Registration(SM) automates the licensing and registration management process to help reduce regulatory risk and time spent on manual processes. Overall, Red Oak allows firms to minimize risk, reduce costs, and increase compliance review process effectiveness and efficiencies.