A provision of the recently-passed Dodd-Frank legislation that seems to have flown completely under the radar may exempt the SEC from the need to respond to most requests for information under the Freedom of Information Act.

Section 9291 ("PROTECTING CONFIDENTIALITY OF MATERIALS SUBMITTED TO THE COMMISSION") of the legislation states that with respect to records obtained from registered persons,

... the Commission shall not be compelled to disclose records or information obtained pursuant to section 17(b), or records or information based upon or derived from such records or information, if such records or information have been obtained by the Commission for use in furtherance of the purposes of this title, including surveillance, risk assessments, or other regulatory and oversight activities.

Under Section 17 of the '34 Act, this would appear to extend to records received in SEC examinations of "every national securities exchange, member thereof, broker or dealer who transacts a business in securities through the medium of any such member, registered securities association, registered broker or dealer, registered municipal securities dealer, registered securities information processor, registered transfer agent, nationally recognized statistical rating organization, and registered clearing agency and the Municipal Securities Rulemaking Board." Registered clearing agencies and transfer agents also would appear to be covered.

SEC spokesman John Nester stated that "the new provision applies to information obtained through examinations or derived from that information." He added that the "new legislation makes certain that we can obtain documents from registrants for risk assessment and surveillance under similar conditions that already exist by law for our examinations. Because registrants insist on confidential treatment of their documents, this new provision also removes an opportunity for brokers, investment advisers and other registrants to refuse to cooperate with our examination document requests."

FOX Business News reports that some lawyers believe the provision "covers almost every action by the agency." FOX also reports that the SEC has already cited the new law as a defense to producing records to FOX under FOIA. On Tuesday, FOX says, the SEC advised FOX Business News that it intends to use Section 929I to refuse FOX's ongoing requests for information. FOX has vowed to challenge the SEC's interpretation of the law, and has a ready ally in Rep. Darrell Issa, who today "demanded answers from the Obama Administration to explain the purpose and how the American people will benefit from Section 9291."