SEC Issues Additional Relief and Guidance as COVID-19 Creates Obstacles

WHAT HAPPENED?

In response to the unusual state of global securities infrastructures stemming from COVID-19, the SEC is continuing to provide regulatory relief to struggling entities. This week, the SEC expanded on a recently released relief package to extend due dates for certain filings and documentation. The ability to hold virtual board meetings and additional flexibility for registered investment companies (“funds”) were also temporarily granted.

The updated information provided by the SEC on March 23 and 25 supersedes information published on March 4 and 13, as applicable.

Deadline updates:

  • Those extensions previously set for April 30, 2020 are now listed as June 30, 2020
  • Those extensions previously set for June 15, 2020 are now listed as Aug. 15, 2020

More information about how to enact relief can be found here.

A summary of the most current guidelines is below.

KEY TAKEAWAYS

Updates for registered investment funds and registered advisers:

  • Advisers can request a 45-day filing extension for Forms ADV and PF typically due between now and June 30, 2020.
  • Funds can request a 45-day filing extension for Form N-PORT and N-CEN typically due between now and June 30, 2020.
  • Funds may engage in virtual instead of in-person board meetings until Aug. 15, 2020.
  • Funds may request a 45-day filing extension for transmittal of annual and semi-annual reports due between now and June 30, 2020.
  • Funds may request a 45-day extension for shareholder prospectus delivery if typically required between now and June 30, 2020.
  • The new release supersedes the previous by no longer requiring funds and advisers to provide a reason for the delay of a filing or provide an estimated date of delivery via their website and in their correspondence to the SEC. However, the SEC and the adviser’s clients or fund shareholders must still be notified of the delay. If the adviser manages a private fund, they must notify the investors in the private fund of the delay.

Updates for public companies:

  • Certain public disclosure reports due between March 1 and July 1 may receive a 45-day filing extension. Among other conditions, those wishing to rely on this relief must submit a Form K-8 or K-6 explaining the reason for the delay.

New information about investment company flexibility, issued March 23, 2020:

  • Registered investment funds may temporarily borrow funds from certain affiliates and make other lending arrangements.
  • The relief includes permission for registered open-end funds and insurance company separate accounts to borrow money from certain affiliates; additional flexibility under existing interfund lending arrangements; and, with prior board approval, registered funds may participate in lending arrangements or borrowings which differ from normal policies.
  • Two weeks before the relief terminates, the SEC will release a notice saying so; this period will end no earlier than June 30, 2020.
  • The SEC issued disclosure guidance for public companies to consider as part of their COVID-19 response.

How to contact the SEC:

  • Questions about or notification of filing delays for Form ADV should be directed to IARDLive@sec.gov.
  • Questions about or notification of filing delays for Form PF should be directed to FormPF@sec.gov.
  • Questions about or notification of filing delays for Forms N-PORT and N-CEN; board meeting requirements; transmittal of annual and semi-annual reports; prospectus delivery; and investment company flexibility should be directed to IM-EmergencyRelief@sec.gov.
  • Public Companies must visit the SEC’s website to submit questions.

WHAT DOES THIS MEAN FOR ME?

Fairview recommends that advisers meet regular filing deadlines unless your firm or fund is encountering extreme COVID-19-related difficulties. The Fairview team is fully operational and is supporting its clients in meeting the regular deadlines. Fairview is also available to answer questions about the SEC’s regulatory relief provisions.

We will continue to provide the most up-to-date information as it becomes available.

About the Author:

Fairview®
Founded in 2005 with the goal of developing streamlined solutions for investment advisers, Fairview® is now servicing investment advisers, foundations, and funds with over $200 billion in collective assets.