SEC Issues Temporary Relief for Companies Amidst Covid-19

SEC ISSUES TEMPORARY RELIEF FOR COMPANIES AMIDST COVID-19

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SEC Issues Temporary Relief for Companies Amidst Covid-19

SEC ISSUES TEMPORARY RELIEF FOR COMPANIES AMIDST COVID-19

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The Securities and Exchange Commission (SEC) grants conditional regulatory relief for certain public companies affected by Coronavirus Disease of 2019 (COVID-19) via an order released on March 4, 2020.

Understanding the constraint and difficulties faced by public companies in meeting filing and regulatory requirements as required by the federal laws. The relief provides qualifying companies with extension and other considerations from certain filing and regulatory requirements, including providing additional time to file certain Exchange Act reports.

FILING REQUIREMENTS FOR EXCHANGE ACT REPORTS

Additional 45 days relief was provided to companies affected by COVID-19 specifically for certain disclosure reports initially due between March 1 and April 30, 2020.

The reports include form 10-Ks and form 10-Qs. Further updates by the SEC will be provided following evolution of COVID-19 situation, including extension of the time period if necessary.

A current report on Form 8-K (6-K for foreign private issuers), by the later of March 16 or original report filing deadline, must be furnished by Companies relying on the relief.

The Form 8-K/6-K must include the following:

a statement that the company is relying on the SEC order;

  • a brief description of the reasons why the company couldn’t file on a timely basis
  • the estimated date by which the report, schedule, or form is expected to be filed; and
  • a risk factor explaining the impact of the coronavirus on the company’s business, if appropriate and material.

If the reason the report can’t be filed timely relates to the inability of any person other than the registrant, the Form 8-K/6-K must also have an exhibit statement signed by such person. The statement must indicate the pertinent reasons why the information will be unable to be provided on or before the company’s filing due date.

A registrant relying on the order doesn’t need to file a Form 12b-25 unless it’s still unable to file by the extended due date.

Registrant, as they rely on the relief, must make any filing within 45 days of the original filing deadline. Those filings must disclose the intent to rely on the SEC relief and state the reasons why it couldn’t file on a timely basis.

A company relying on the order will still be considered current in its Exchange Act filing requirements for purposes of eligibility to use Forms S-3 or S-8 and the current public information eligibility requirements of Rule 144(c), as long as:

  • the company was current and timely as of the first day of the relief period; and
  • the company files any report due during the relief period within 45 days of the filing deadline for the report.

The relief also extends to the exemption of the SEC to registrants from the obligation to publish proxy statements, annual reports, and other soliciting materials, when mail delivery is remote and the following conditions are met:

  • the registrant’s security holder has a mailing address located in an area where delivery service has been suspended as a result of COVID-19 measures; and
  • the registrant made a good faith effort to furnish the materials to the security holder.

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Disclaimer

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. It is not intended to be relied upon as accounting*, tax, or other professional service. Please refer to your advisors for specific advice. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.