SEC extends financial filing relief due to coronavirus

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The Securities and Exchange Commission said Wednesday it’s extending the filing periods covered under its previous reporting relief for companies due to the coronavirus pandemic.

Earlier this month, the SEC said it is giving “conditional” regulatory relief from certain filing obligations for public companies under the federal securities laws due to the coronavirus (see our story). The SEC extended the conditional exemptions Wednesday from the reporting and proxy delivery requirements for public companies, funds and investment advisors affected by COVID-19. On top of that, the SEC’s Division of Corporation Finance offered its current views about disclosure considerations and other securities law issues related to COVID-19.

“Health and safety continue to be our first priority,” said SEC chairman Jay Clayton (pictured) in a statement Wednesday. “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.”

For public companies, the SEC issued an order saying that, subject to certain conditions, public companies will get a 45-day extension to file certain disclosure reports that would otherwise have been due between March 1 and July 1, 2020. Wednesday’s order supersedes and extends the SEC’s original order of March 4, 2020. But there are some conditions. Among them, companies need to continue to convey through a current report a summary of why the relief is needed in their particular circumstances for each periodic report that is delayed. The SEC said it may provide extensions to the time period for the relief, with any additional conditions it deems appropriate, or provide additional relief as circumstances warrant. It is encouraging companies and their representatives to contact the SEC staff with any questions or matters of particular concern.

For investment funds and advisers, the SEC is also providing relief due to the pandemic. The SEC issued orders to provide certain investment funds and investment advisers with extra time to hold in-person board meetings and meet some of their filing and delivery requirements. Wednesday’s orders supersede and extend the filing periods covered by the SEC’s original orders of March 13, 2020. Among other conditions, the entities need to notify the SEC staff and/or their investors, as applicable, of their intention to rely on the relief, but generally they no longer need to describe why they are relying on the order or estimate a date by which the required action will occur. The time periods for the relief are described in the orders. The SEC said it may provide extensions to the time period for the relief, with any additional conditions it deems appropriate, or provide additional relief as circumstances warrant. The SEC is encouraging firms and financial professionals to contact SEC staff with questions or matters of particular concern.

The SEC’s Division of Corporation Finance also issued disclosure guidance for public companies Wednesday. In Disclosure Guidance Topic No. 9, the CorpFin division provided the staff’s current views regarding disclosure and other securities law obligations that companies ought to consider with respect to COVID-19 and related business and market disruptions. The division has been monitoring how companies are reporting the effects and risks of coronavirus on their businesses, financial condition and results of operations, and is offering guidance while companies prepare their disclosure documents during this uncertain time.

The guidance encourages timely reporting while recognizing that it could be hard to assess or predict with precision the broad effects of COVID-19 on their industries or individual companies.

The SEC and its divisions and offices are also considering providing more relief from other regulatory requirements for those affected by coronavirus. Entities and financial professionals affected by the disease are being encouraged to contact the SEC staff with questions and concerns.

Raef Lawson, vice president of research at the Institute of Management Accountants, noted that the IRS has recently extended its filing deadlines as well in response to the coronavirus pandemic: “A lot of staff are working from home, and it’s not business as usual. Management accountants have an important role to play in how their firms cope with and address this coronavirus.”

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SEC Coronavirus Financial reporting Jay Clayton IMA