On October 5, 2016, the staff of the Securities and Exchange Commission (the "SEC") announced1 that, effective immediately, it will no longer require companies to provide "Tandy" representations in their correspondence with the SEC staff relating to all disclosure filing reviews. The SEC announcement also stated that a company that was asked to provide Tandy representations, but has yet to respond to an SEC comment letter, is no longer required to furnish the Tandy representations in its response.
The Tandy representations are named after the representations that the SEC first requested from the Tandy Corporation in a comment letter. These representations typically take the form of a written statement from the company acknowledging that:
- should the SEC or the staff, acting pursuant to delegated authority, declare a registration statement effective, it does not foreclose the SEC from taking any action with respect to the registration statement;
- the action of the SEC or the staff, acting pursuant to delegated authority, in declaring the registration statement effective, does not relieve the company from its full responsibility for the adequacy and accuracy of the disclosure in the registration statement; and
- the company may not assert 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.
Prior to 2004, Tandy representations were typically required only where a company was the subject of an SEC enforcement action. On June 24, 2004, the SEC published a release indicating that it would request Tandy representations in comment letters relating to all disclosure filing reviews.
Although Tandy representations are no longer required, the SEC announcement noted that companies "are responsible for the accuracy and adequacy of the disclosure in their filings...," and they will continue to remind companies of this fact in their comment letters by way of the statement: "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."