On March 29, 2010, the Division of Corporation Finance staff posted a sample letter it provided to the chief financial officer of certain public companies requesting information about repurchase agreements, securities lending transactions, or other transactions involving the transfer of financial assets with an obligation to repurchase the transferred assets.

In the letter, the staff asks the chief financial officer to provide detailed information regarding repurchase agreements accounted for as sales, including providing a detailed analysis supporting the use of sales accounting for repurchase agreements and the business reasons for structuring the repurchase agreement as sales transactions rather than collateralized financings. If the issuer accounted for repurchase agreements, securities lending transactions, or other transactions involving the transfer of financial assets with an obligation to repurchase the transferred assets as sales and did not provide disclosure of those transactions in its MD&A, the chief financial officer must explain why disclosure was unnecessary and describe the process he or she undertook to reach that conclusion.

The letter follows recent allegations that Lehman Brothers Holdings Inc. used repurchase agreements to hide $50 billion in debt.

http://www.sec.gov/divisions/corpfin/guidance/cforepurchase0310.htm