SEC Grants Conditional Regulatory Relief to Certain Companies and Market Participants Impacted by Coronavirus


SEC Grants Conditional Regulatory Relief to Certain Companies and Market Participants Impacted by Coronavirus

Alert |
Ralph V. De Martino

The U.S. Securities and Exchange Commission (SEC) issued an order that grants conditional regulatory relief for certain publicly traded company filing obligations in light of the rapidly spreading coronavirus pandemic. The regulatory relief relates to the filing of disclosure reports, as well as the furnishing of information to security holders. The order also grants relief to any person required to make any filings with respect to such companies.

The order, which can be viewed here, provides publicly traded companies (registrants) with an additional 45 days to file disclosure reports that would otherwise have been due between March 1 and April 30, 2020. The order’s conditions for that relief require those companies to submit a Form 8-K or 6-K by March 16 or the original reporting deadline, which includes these five points of information:

  1. that it is relying on this order
  2. a brief description of why it could not timely file
  3. an estimated date of when the company expects to file its report
  4. if appropriate and material, a risk factor explaining the impact of the coronavirus on its business
  5. if the company’s failure to timely file relates to a person other than the registrant, to attach a statement signed by such person explaining why it cannot furnish the required information

The key dates that registrants must be aware of are March 16 and their original reporting deadline. For a company to be able to rely on the SEC’s order, it must file a Form 8-K or Form 6-K by the later of March 16 or the original reporting deadline.

The order provides relief to registrants who are required to furnish periodic pubic reports such as annual reports and quarterly reports, as well as proxy statements, soliciting materials, and information statements, provided that two conditions are satisfied: (1) the registrant’s security holder has a mailing address in an area where the common carrier, because of the 2019 novel coronavirus, has suspended delivery service of the type that is customarily used by the registrant in making the solicitation, and (2) the registrant made a good faith effort to either furnish the solicitation or information materials in accordance with the applicable rules.

The order also grants relief to any person required to make any filings with respect to a registrant within the scope of the order, provided that (a) such person files with the SEC any report, schedule, or form required to be filed no later than 45 days after the original due date and (b) any report, schedule, or form filed by the applicable extended deadline discloses that such person is relying on the order and states the reasons why it could not file such report, schedule, or form on a timely basis.

Prior to this announcement, the SEC’s last broad-based grant of relief from filing took place in the aftermath of Hurricane Michael in 2018. At that time, the SEC granted relief to registrants and others required to file schedules, furnish proxy statements, transmit annual or semi-annual reports, and fulfill other requirements under the Securities and Exchange Act of 1934 or the Investment Company Act of 1940.

This week’s order comes on the heels of the SEC’s initial statement last month (which we wrote about here) announcing its efforts to assist and guide issuers and other market participants that may be affected by the 2019 novel coronavirus. The SEC’s statement emphasizes its policy to grant appropriate relief from filing deadlines in situations where an issuer cannot timely fulfill its reporting obligations due to circumstances beyond the issuer’s control. At that time, the SEC stated that it was then considering whether it would grant relief on a broad basis or on a case-by-case basis in connection with the burdens imposed on public reporting companies and their auditors by the coronavirus pandemic.

The SEC states that it will continue to monitor the latest developments and may extend the time period offered under this order.