Hot Topic | April 2020

 

Insight

Extended relief for companies affected by COVID-19

Updated: SEC filing deadlines further extended for companies impacted by the COVID-19 outbreak.

Timothy Brown

Timothy Brown

Partner, Dept. of Professional Practice, KPMG US

+1 212-954-8856

Lindsey Freeman

Lindsey Freeman

Managing Director, Dept. of Professional Practice, KPMG US

+1 212-954-3519

Erin McCloskey

Erin McCloskey

Partner, Dept. of Professional Practice, KPMG US

+1 212-872-5718

Karmen Ward

Karmen Ward

Managing Director, Audit, KPMG US

+1 212-872-6808

The SEC has further extended filing deadlines for companies affected by the COVID-19 pandemic. KPMG reports on the conditions of the SEC’s relief Orders and other reporting considerations related to the COVID-19 outbreak.

Applicability

SEC registered companies impacted by the COVID-19 outbreak.
 

SEC Provides Additional Temporary Regulatory Relief and Assistance to Market Participants Affected by 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)

Division of Investment Management Staff Statement on Fund Board Meetings and Unforeseen or Emergency Circumstances Related to Coronavirus Disease 2019 (COVID-19)

Relevant dates

  • Effective immediately

Key impacts

  • The time period for regulatory relief is for filing deadlines from March 1, 2020 to July 1, 2020.
  • Companies relying on the relief Order are required to furnish a Form 8-K or Form 6-K no later than the company’s original reporting deadline, disclosing certain required information.
  • Filing deadlines for any report, schedule or form are extended 45 days from the original due date.
  • The SEC provided temporary relief for all companies from the notarization requirement needed to gain access to make filings on the EDGAR system from March 26, 2020 through July 1, 2020, subject to certain conditions.
  • The SEC updated its Compliance and Disclosure Interpretations (C&DI) 135.12 and 135.13 to include considerations related to filing a Form 12b-25 or to furnishing a Form 8-K or 6-K when affected by COVID-19.
  • The SEC issued C&DI 104.18 to clarify the application of the relief Order when a company is unable to file Part III information of Form 10-K no later than 120 days after its fiscal year end.
  • The SEC issued C&DI 112.02 to clarify that a Canadian MJDS filer is not required to comply with the conditions of the SEC’s relief Order on the date the Form 40-F would be due if it is properly relying on an applicable Canadian COVID-19-related relief for extension of its filing deadline with the securities commission or equivalent regulatory authority. 
  • Companies are exempt from the delivery requirements for proxy and information statements to security holders when they have mailing addresses located in an area where the common carrier has suspended delivery due to COVID-19, and the company makes a good faith effort to furnish the soliciting materials to the security holder.
  • The SEC reminds all companies of their disclosure obligations to provide material information related to the impacts of the coronavirus, and to update such disclosures as the circumstances evolve. 
  • The SEC staff issued more detailed guidance that provides current views regarding disclosure and other federal securities laws obligations for consideration with respect to coronavirus.
  • The SEC’s Division of Investment Management separately issued a statement extending the no-action position if fund boards did not adhere to certain in-person voting requirements in the event of unforeseen or emergency circumstances affecting some or all of the fund’s directors.
  • The SEC issued Orders providing relief from certain requirements under the Investment Company Act of 1940.
  • The SEC issued an Order granting exemptions for certain filing requirements of the Investment Advisers Act of 1940.
  • Companies are encouraged to maintain close communications with their board of directors, external auditors, legal counsel and other service providers as the circumstances progress.  
  • The SEC extended the filing deadlines for 45 days to file certain disclosure reports that would have been due between March 26 and May 31, 2020 for specified reports and forms that companies must file in compliance with Regulation A and Regulation Crowdfunding.
  • The SEC issued a temporary conditional exemptive order that provides municipal advisors with an additional 45 days to file annual updates to Form MA that would have been due between March 26, 2020 and June 30, 2020. 

Report contents

  • Background
  • Regulatory relief
  • Registered investment companies
  • Investment Advisers Act 
  • Regulation A and Regulation Crowdfunding
  • Municipal advisors
  • Evolving information

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