SEC Broadens Relief Efforts For Virus-Affected Cos., Funds

Law360 (March 25, 2020, 6:54 PM EDT) -- The U.S. Securities and Exchange Commission on Wednesday broadened its reporting and regulatory relief for public companies and investment funds affected by the novel coronavirus pandemic.

The agency is extending the filing periods covered by an order earlier this month that conditionally provides public companies an extra 45 days to turn in certain regulatory disclosures. Originally the relief covered disclosure reports that would have otherwise been due between March 1 and April 30, but that cutoff is now July 1.

The regulator has also issued orders providing investment funds and advisers with a longer time frame for exemption from having to hold in-person board meetings and fulfilling certain filing and delivery deadlines.

"Health and safety continue to be our first priority," SEC Chairman Jay Clayton said in announcing the orders. "These actions provide temporary, targeted relief to issuers, investment funds and investment advisers affected by COVID-19.

"At the same time, we encourage public companies to provide current and forward-looking information to their investors and, in these uncertain times, companies are reminded that they can take steps to avail themselves of the safe harbor in Section 21E of the Exchange Act for forward-looking statements," he said.

Among the measures undertaken by the SEC in response to the global COVID-19 crisis was the March 4 order giving public companies six additional weeks to submit a range of materials covered by the Exchange Act and associated regulations.

In order to qualify for the relief, companies must submit a report explaining why the relief is needed within 45 days of the original deadline, when they expect to file the required materials and, if needed, a risk factor explaining the impact of the coronavirus on their business.

Then, on March 13, the agency announced that until June 15, funds and investment advisers affected by the coronavirus can apply for exemptions from a requirement that certain agreements and plans have to be approved by a board of directors' in-person vote. Pursuant to an order Wednesday, the window for that exemption has been extended to Aug. 15.

The regulator also handed down an order on March 13 that extended filing deadlines for certain forms and reports originally owed by investment companies before April 30. That relief is now available for documents originally due before June 30, and investment companies and advisers no longer need to tell the SEC why they are relying on the relief or when they expect to file the required materials.

Wednesday's announcement notes that the agency may provide additional relief extensions or forms of relief as it monitors the effects of the COVID-19 crisis on financial market participants.

On Tuesday, the regulator 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.

Days before, the SEC approved rules authorizing the New York Stock Exchange to temporarily shift to full-day electronic trading, and also eased rules that apply to transfer agents. It has also allowed public companies to switch their annual meetings to virtual or hybrid gatherings.

The SEC itself is now working remotely and conducting virtual meetings after a coronavirus scare at its Washington, D.C., office.

--Additional reporting by Elise Hansen and Tom Zanki. Editing by Adam LoBelia.

For a reprint of this article, please contact reprints@law360.com.

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