Appendix A — SEC Staff Review Process | DART – Deloitte Accounting Research Tool

The Division conducts selective and required reviews of filings made under the Securities Act and the Exchange Act. Since September 29, 2019, the Division’s disclosure program has operated under a revised organizational structure consisting of the following four groups:

Disclosure Review Program — Performs most of the selective and required reviews. Reviews are conducted by the following nine review offices:
- Crypto Assets.
- Energy & Transportation.
- Finance.
- Industrial Applications and Services.
- Life Sciences.
- Manufacturing.
- Real Estate & Construction.
- Technology.
- Trade & Services.
Registrants are assigned to a specific review office on the basis of their industry, and each office is staffed by professionals with specialized industry, accounting, and disclosure review expertise.

On September 9, 2022, the SEC announced that it would be establishing two new industry offices, as reflected above. The Office of Crypto Assets will provide more specialized support for this emerging area. Many reviews related to this topic were previously conducted by the Office of Finance. The Office of Industrial Applications and Services will review nonpharma, nonbiotech, and nonmedicinal products companies previously assigned to the Office of Life Sciences, given the growth in life sciences registrants.
Specialized Policy and Disclosure — Handles matters related to international corporate finance, mergers and acquisitions, structured finance, and corporate governance.
Office of Risk and Strategy — Provides guidance to Division staff on emerging risks and related disclosures.
Office of Assessment and Continuous Improvement — Evaluates the effectiveness of the Disclosure Review Program.

The SEC’s Web site includes an overview that explains the Division’s filing review and comment letter process. The overview aims to increase transparency in the review process and expresses the staff’s willingness to discuss issues with registrants. The overview indicates that the Division focuses “on critical disclosures that appear to conflict with Commission rules or applicable accounting standards and on disclosure that appears to be materially deficient in explanation or clarity.” In addition, the overview notes that the “Division completes many filing reviews without issuing comments.”

The overview encourages registrants to view the comment letter process as a dialogue and states that “[i]f a company does not understand a comment or the staff’s purpose in issuing it,” the company may “seek clarification [first] from the examiner” and then from “the staff member who approved the comment.”1 In addition, registrants may request “[a]t any time during the filing review process . . . that the staff reconsider either a previously-issued comment or its view of the company’s response to a comment.” Although the Division does not require registrants to follow a formal protocol for seeking reconsideration, such a request should be directed to the chief of the office conducting the review. Further, registrants “should feel free to involve the Disclosure Program Director, the Division’s Deputy Director or Director at any stage in the filing review process.”

Registrants may also involve the SEC’s Office of the Chief Accountant (OCA) during any stage of the review process. Unlike the Division’s role, which is to address matters related to the age, form, and content of registrants’ financial statements that are required to be filed, the OCA’s role is to address questions concerning a registrant’s application of GAAP. Guidance on consulting with the OCA is available on the SEC’s Web site.

A registrant that receives an SEC comment letter should generally respond within the time frame indicated in the letter or proactively communicate with the SEC staff regarding expected timing. See Appendix B for more information about responding to SEC comment letters. The registrant should continue to respond to any requests for more information until it receives a letter from the Division stating that the Division has no further comments. A registrant that does not receive a completion letter within a reasonable amount of time after submitting a response letter should call its SEC staff reviewer (named in the letter) to ask about the status of the review. If the review is complete, the registrant should request a completion letter.

To increase the transparency of the Division’s review process, comment letters and company responses to those letters are made public, via the SEC’s Web site, at least 20 business days after the Division has completed its review of a periodic or current report or declared a registration statement effective. See Appendix C for tips for searching the SEC’s comment letter database.

In certain instances, the SEC staff may conclude that a registration statement or offering document is so deficient that the staff will defer review until such filing is amended to address the deficiencies. Historically, the staff has communicated this to registrants on a confidential basis. Since 2018, however, in a manner consistent with the SEC’s effort to improve transparency, letters requiring registrants to amend their filings to resolve the deficiencies before the staff commences its review have been made public via the SEC’s Web site within 10 days of issuance. Thus far, the issuance of such letters has been limited.