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Law360 (June 19, 2020, 9:37 PM EDT) -- Registered investment funds and business development companies can continue to meet and vote virtually through the end of the year, the U.S. Securities and Exchange Commission said Friday.
The SEC's June 19 guidance partially extends provisions the federal regulator put in place in March as COVID-19 spread across the nation and state, regional and local shutdown orders complicated efforts for boards to meet in person.
The regulator had announced in mid-March that until June 15, funds and investment advisers affected by the novel coronavirus could apply for exemptions from a requirement that certain agreements and plans have to be approved by a board of directors' in-person vote. On March 25, the SEC extended the exemption window through Aug. 15.
Amid the pandemic and economic turbulence that resulted from it, the SEC said it had issued the guidance "as part of broader exemptive orders providing temporary relief" to the governing bodies.
The SEC noted that the extension was more limited in scope than the original guidance in March.
"Based on staff outreach to fund and adviser representatives, the Commission has determined not to extend the other relief provided in those orders at this time," the regulator said, without elaborating further. At the same time in March, the agency had extended some regulatory disclosure filing deadlines for public companies.
"Health and safety continue to be our first priority," SEC Chairman Jay Clayton said in announcing the orders — which came on the heels of the agency's own coronavirus scare. "These actions provide temporary, targeted relief to issuers, investment funds and investment advisers affected by COVID-19."
The latest extension lasts through Dec. 31, 2020, the SEC said, noting that it continues to assess the impact of the pandemic on the markets, public companies and investors.
SEC guidance from March allowed public companies to hold virtual or hybrid gatherings, records show, and also in March, the agency granted temporary relief that increased the short-term borrowing ability of registered investment funds, and gave the funds more tools to manage their portfolios while shareholders seek to rebalance their investments.
The SEC has also encouraged the industries it regulates to be transparent with consumers as they contend with the unprecedented public health threat posed by the virus.
The latest guidance comes as reports show new coronavirus case numbers rising in roughly two dozen states and Federal Reserve officials highlighted the economic uncertainty the nation faces.
The SEC referred registered funds and business development companies to request additional details from its Division of Investment Management.
The SEC did not immediately respond to a request for further comment on Friday.
--Additional reporting by Dean Seal, Tom Zanki, Jack Queen and Elise Hansen. Editing by Emily Kokoll.
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