SEC Extends Conditional Filing Exemptions for Companies That May be Affected by COVID-19

On March 25, 2020, the Securities and Exchange Commission (SEC) issued a series of orders that extend the filing periods covered by its previous conditional reporting relief of March 4, 2020 for public companies, funds and investment advisers that may be affected by COVID-19.

Relief Related to Securities Exchange Act of 1934 (Exchange Act)

The SEC’s Order of March 25, 2020, (Exchange Act Order) supersedes and extends the SEC’s Original Order of March 4, 2020 (Exchange Act Original Order) and, subject to certain conditions, provides public companies with a 45-day extension to make certain filings with the SEC under the Exchange Act, including annual and periodic disclosure reports that would otherwise have been due between March 1 and July 1, 2020. Schedule 13D, Section 16 and Section 13(p) filings are excluded.

A company relying on the Exchange Act Order must furnish to the SEC, by no later than the original due date for the SEC disclosure report, a report on Form 8-K or Form 6-K (as applicable) stating that it is relying on the order; a brief description of the reasons why it could not file the disclosure report on a timely basis; the estimated date by which the disclosure report is expected to be filed; and if material, a risk factor explaining the impact of COVID-19 on its business. In addition, if the reason the disclosure report cannot be filed by its original due date relates to the inability of any person, other than the issuer, to furnish a required opinion, report or certification, the Form 8-K or Form 6-K must have attached as an exhibit a statement signed by such person stating the specific reasons why the person is unable to furnish the required document on or before the date the report must be filed. The SEC may provide extensions to the time period for the relief, with any additional conditions it deems appropriate, or provide additional relief as circumstances warrant.

Relief Related to the Investment Advisers Act of 1940 (Investment Advisers Act)

The SEC’s Order of March 25, 2020, with respect to the Investment Advisers Act of 1940 (Investment Advisers Act Order) supersedes and extends the SEC’s Original Order of March 13, 2020, with respect to the Investment Advisers Act of 1940 (Investment Advisers Act Original Order). Subject to the conditions described below, the Investment Advisers Act Order extends by up to 45 days the deadline by which registered investment advisers and exempt reporting advisers are required to make certain filings, and comply with certain delivery requirements, that otherwise would have been due between March 13 and June 30, 2020 under the Investment Advisers Act. The Investment Advisers Act Order is applicable only to investment advisers that are unable to meet a filing deadline or delivery requirement due to circumstances related to current or potential effects of COVID-19. A registered investment adviser or exempted reporting adviser affected by COVID-19 that has a Form ADV filing due between March 13 and June 30, 2020, must file its Form ADV as soon as practicable, but no later than 45 days after its original due date. In addition, the deadline for a registered investment adviser affected by COVID-19 to deliver to its clients a brochure (ADV Part 2), summary of material changes and/or brochure supplement, and to file its annual Form PF, is similarly extended to as soon as practicable, but no later than 45 days after the original due date for such delivery or filing, as applicable. The investment adviser relying on this order with respect to the filing of Form ADV, delivery of its brochure, summary of material changes, or brochure supplement must promptly notify the SEC via email at IARDLive@sec.gov and must also disclose on its public website (or, if it does not have a public website, promptly notify its clients and/or private fund investors ) that it is relying on the Investment Advisers Act Order. Any investment adviser relying on this order with respect to the filing of Form PF required by Rule 204(b)-1 must promptly notify the SEC staff via email at FormPF@sec.gov stating that it is relying on this Order. The Investment Advisers Act Order removed the Investment Advisers Act Original Order’s conditions that an investment adviser that intends to rely upon the relief must include a brief description of the reasons why it could not file or deliver its Form on a timely basis and the estimated date by which it expects to file or deliver the Form.

Relief Related to the Investment Company Act of 1940 (Investment Company Act)

The SEC’s Order of March 25, 2020, with respect to the Investment Company Act of 1940 (Investment Company Act Order) supersedes and extends the SEC’s Original Order of March 13, 2020, with respect to the Investment Company Act of 1940 (Investment Company Act Original Order).

With respect to relief from in-person board meetings, registered funds and business development companies (BDCs) are relieved from applicable Investment Company Act requirements that approvals and renewals of advisory and distribution agreements, plans and arrangements, and selection of accountants be approved by the company’s board of directors by an in-person vote, due to circumstances related to COVID-19, provided that the votes that would otherwise be required to be cast at an in-person meeting are instead cast at a meeting in which directors may participate by any means of communication that allows all directors participating to hear each other simultaneously during the meeting and the board of directors, including a majority of the directors who are not interested persons of the registered investment company or BDC, ratifies the action taken pursuant to this exemption by vote cast at the next in-person meeting. The SEC stated that such relief may only be relied on if it is “necessary and appropriate” due to circumstances related to the current or potential effects of COVID-19, and noted that relief may be necessary because COVID-19 may present challenges for boards of registered funds and BDCs to travel in order to meet the in-person voting requirements under the Investment Company Act and rules thereunder. This relief is currently limited to the period from and including March 13 to and including August 15, 2020.

With respect to relief from annual census and monthly portfolio (Form N-CEN and N-PORT) filing requirements, and annual and semi-annual report transmittal, the Investment Company Act Order provides up to an additional 45 days for registered funds or unit investment trusts, as applicable, provided that a registered fund or unit investment trust must promptly provide to the SEC via e-mail notice at IM-EmergencyRelief@sec.gov that it is relying on the order. The Investment Company Act Order removes the Investment Company Act Original Order’s conditions that a registered fund that intends to rely upon the relief must include a brief description of the reasons why it could not make the required filing or transmittal, as applicable, on a timely basis and the estimated date by which it expects to make the required filing or transmittal, as applicable. In addition, a registered fund or unit investment trust must include a statement on its public website briefly stating that it is relying on the Investment Company Act Order. The Investment Company Act Order notes that any Form N-CEN or Form N-PORT filed pursuant to this order must include a statement of the filer that it relied on this order and the reasons why it was unable to file such report on a timely basis. The Investment Company Act Order also notes that any shareholder report transmitted pursuant to this order must also be filed within 10 days of its transmission to shareholders. This relief is currently limited to the period from and including March 13 to and including June 30, 2020.

Also, closed-end funds’ and BDCs’ filing of notices of intent to call or redeem its securities may be made fewer than 30 days prior, if it is permitted to do so under state law and its applicable governing documents, it has e-mailed the SEC of its reliance on the order, and it files its notice containing all the information required by Rule 23c-2 prior to: the call or redemption, any offer of replacement securities and its notification to shareholders whose securities are being called or redeemed. The SEC stated that such relief may be particularly necessary because registered closed-end funds and BDCs may seek to call or redeem securities in light of recent market movements and may face challenges in providing the advance notice required under Rule 23c-2. This relief is currently limited to the period from and including March 13 to and including August 15, 2020.

Because prospectus delivery requirements are set forth in the Securities Act of 1933, which does not easily provide exemptive relief, the Investment Company Act Order expresses the position that the SEC would not take enforcement action if, due to COVID-19, current prospectuses are not provided to shareholders not making an “initial purchase” of shares of the fund, if the fund (1) provides to the SEC via e-mail  a statement that it is relying on the SEC’s position, (2) publishes on its public website a statement that it intends to rely on that position, and (3) the registered fund publishes its current prospectus on its public website. The registered funds can rely on this position only to the extent that prospectus deliveries were originally required on or after the date of the SEC’s order but on or prior to June 30, 2020, and that the prospectus deliveries are ultimately made to investors as soon as practicable but no later than 45 days after the date originally required.