COVID-19 Regulatory Relief Highlights

April 29, 2020

SEC Issuers

Note: The SEC has a section on their site related to guidance and COVID-19.

SEC Extends Conditional Exemptions From Reporting and Proxy Delivery Requirements for Public Companies, Funds, and Investment Advisers Affected By Coronavirus Disease 2019 (COVID-19)

3.25.20
Commission issued an order that provides certain public companies with a 45-day extension to file that would otherwise have been due between March 1 and July 1, 2020. 

This supersedes the original order issued March 4, 2020.

SEC Staff Statement Regarding Rule 302(b) of Regulation S-T in Light of COVID-19 Concerns

3.24.20
Division staff address concerns related to Regulation S-T regarding the authentication document retention requirements under Rule 302(b) in light of logistical issues raised by COVID-19. 

CF Disclosures Guidance: Topic No. 9

3.25.20
Division of Corporation Finance provides their current views regarding disclosure and other securities law obligations that companies should consider with respect to COVID-19.

Statement Regarding Requirements for Certain Paper Submissions in Light of COVID-19 Concerns

4.2.20
Division staff address concerns related to logistical difficulties submitting certain documents in paper format and obtaining manual signatures. The statement covers those who submit Impacted Paper Submissions from March 16, 2020 to June 30, 2020.

Statement on the Importance of High-Quality Financial Reporting in Light of the Significant Impacts of COVID-19

4.3.20
Office of the Chief Accountant reinforces the importance of providing investors with high-quality financial information and highlights how the office is responding to COVID-19. 

Staff Guidance for Conducting Annual Meetings in Light of COVID-19 Concerns

4.7.20
Division staff address concerns related to compliance with proxy rules for upcoming annual meetings in light of health and logistical issues – including changing the date, holding virtual meetings, presentation of shareholder proposals and delays in printing full set of proxy materials. 

SEC Registered Investment Advisers

SEC Takes Targeted Action to Assist Funds and Advisers, Permits Virtual Board Meetings and Provides Conditional Relief from Certain Filing Procedures

3.13.20
The relief provided covers in-person board meetings and certain filing and delivery requirements for certain investment funds and investment advisers.

SEC Extends Conditional Exemptions From Reporting and Proxy Delivery Requirements for Public Companies, Funds, and Investment Advisers Affected By Coronavirus Disease 2019 (COVID-19)

3.25.20
The Commission issued an order that provides certain investment funds and advisors with additional time to hold in-person board meetings and meet certain filing requirements.

U.S. Securities and Exchange Commission – Staff Responses to Questions About the Custody Rule: Question IV.7

3.30.20
FAQ IV.7 indicates that the SEC would not recommend enforcement action against an adviser that reasonably believed that its surprise custody examination would be completed within the 120-day deadline, but failed to do so due to the logistical disruptions caused by COVID-19 as long as such report is filed as soon as practicable, but not later than 45 days after the original due date.

U.S. Securities and Exchange Commission – Staff Responses to Questions About the Custody Rule: Question VII.4

4.2.20
FAQ VII.4 provides relief from maintaining certain privately issued securities that are evidenced with physical certificates with a qualified custodian for the duration of closures related to COVID-19. 

U.S. Securities and Exchange Commission – Staff Responses to Questions About the Custody Rule: Question VI.9

4.27.20
The SEC staff has recently updated question VI.9 in its FAQ on the custody rule which addresses an adviser relying on the "audit provision" under the custody rule that fails to meet the 120-day rule under certain "unforeseeable circumstances."

Broker-Dealers

Note: The SEC has a section on their site related to FAQs for BD Financial Responsibility Rules. 

FINRA Filing Extensions – Annual Reports

3.24.20
FINRA provides any member that meets the exemptive provisions of Rule 15c 3-3 (k) or files a Part IIA FOCUS Report with a 30-calendar-day extension for submitting their annual report related to fiscal years ending in January 2020 through March 2020. 

FINRA Filing Extensions – FOCUS Reports

3.24.20
FINRA provides a 10-day extension for submitting FOCUS Reports for any member that meets the exemptive provisions in SEA Rule 15c 3-3 (k) or files a Part IIA FOCUS Report related to the period ending February through April 2020. Procedures under rule 17a-5(a) 96) are waived. 

SEC Staff Statement Regarding Rule 302(b) of Regulation S-T in Light of COVID-19 Concerns

3.24.20
Division staff address concerns related to Regulation S-T regarding the authentication document retention requirements under Rule 302(b) in light of logistical issues raised by COVID-19. 

FINRA Annual Assessment and Net Capital – Small Firms Will be Permitted to Spread Out Payment of the Annual Assessment

4.2.20
FINRA permits small firms additional time to pay annual assessments, as if the invoices were billed as of August 1, 2020, rather than as due upon receipt in April. Small firms that choose to make partial payments are allowed to pay 50% September 1, 2020 and the remaining 50% on December 1, 2020.

FINRA Annual Assessment and Net Capital – Net Capital Treatment of Deferred Annual Assessment

4.2.20
FINRA provides guidance for small firms, who choose to take additional time with their annual assessment payments, on how to treat the deferred amount for purposes of net capital. 

FINRA Net Capital Treatment of Covered Loans Under the CARES Act

4.2.20
FINRA provides relief to member firms with covered loans included as a liability on the balance sheet that is expected to be forgiven under Section 1106 of the CARES Act.

Statement Regarding Requirements for Certain Paper Submissions in Light of COVID-19 Concerns

4.2.20
Division staff address concerns related to logistical difficulties submitting certain documents in paper format and obtaining manual signatures. The statement covers those who submit Impacted Paper Submissions from March 16, 2020 to June 30, 2020.

CFTC Registered Entities

CFTC Letter No 20-11: U.S. Commodity Futures Trading Commission – No-Action Positions for Commodity Pool Operators in Response to the COVID-19 Pandemic

3.24.20
CFTC Letter No 20-11

Section #2-Pool Annual Reports highlights that Commodity Pool Operators due April 30, 2020 have an additional 45 days to File

NFA Coronavirus Update – Regulatory Relief for IBs

3.20.20
NFA addresses CFTC Regulation 1.10 and provides relief to all independent IB Members with a 30 calendar day extension for filing certified financial reports for fiscal years ending in December 2019 through March 2020. It also grants a 10 business extension for filing semi-annual, quarterly or monthly reports for periods ending February through April 2020.

Insurance

The National Association of Insurance Companies (NAIC) continues to gather state specific guidance for COVID-19. Refer to the NAIC Coronavirus Resource Center for information issued for your state.

About Matthew Maulbeck

Matthew Maulbeck, Managing Partner, Audit, has accounting, financial reporting and auditing expertise with public and private companies in the financial services, real estate, retail and pharmaceutical industries, including SEC rules and regulations and reviewing SEC filings.