SEC Announces Relief for COVID-19 Affected Public Companies

By | 03/20/2020 | 4:06 pm ET

On March 4th, 2020 the SEC announced that it is providing relief for public companies that may not be able to meet SEC filing deadlines due to the effects of coronavirus COVID-19 which was first reported on December 31, 2019, in Wuhan, China. Conditional regulatory relief is provided for US companies located in or with operations in affected areas.

SEC Relief Disclosure

The SEC has allowed an additional 45 days to file particular disclosure reports that would otherwise have been due between March 1st and April 30th, 2020. Under Section 36 of the Exchange Act, the commission reserves the right to provide exemption necessary or appropriate in the public interest and is consistent with the protection of investors. The SEC will continue to monitor the situation and if necessary may extend the time period with any additional conditions or relief. This is subjected to certain conditions which includes:

  1. The registrant should be unable to meet a filing deadline due to circumstances related to COVID-19
  2. The company should furnish a Form 8-K or Form 6-K by latest March 16 or the original reporting deadline stating:
  • The company is relying on this order
  • A brief description on why it could not file on a timely basis
  • The estimated date by which the company is expecting to file the required report, schedule, or form
  • If appropriate and material, a risk factor explaining, the impact of COVID-19 on its business
  • If it is because of the inability of a person other than a registrant an exhibit should be filed alongside Form 8-K or 6-K, containing statement signed by such person stating reasons why he is unable to furnish the required documentation on or before the date
  1. The Form should be filed within 45 days after the original due date and will be permitted to rely on Rule 12b-25 if they are unable to file on or before the extended due date.

The SEC in its press release said that it realizes the importance of markets and investors to receive accurate and timely information and will take following position under the Securities Act and the Exchange Act:

  • To be eligible to use Form S-3, Form S-8 and the current public information requirements of Rule 144(c), the company will be considered filing compliant if all the reports are timely updated on the first day of the relief period and any due reports are filed in the relief period within 45 days of the deadline
  • The due date will be 45 days after the filing deadline for all the companies applying to receive an extension on annual or quarterly reports and can rely on Rule 12b-25 if they are unable to file on or before the extended due date.

Advice on information disclosure and meetings

The SEC has also advised companies to keep investors informed of the material developments that may impact the entity’s performance due to the novel coronavirus in view of its disclosure obligations as under the federal securities laws. These entities are to also avoid selective disclosure and refrain from risky business practices until investors have been appropriately informed. Companies who follow this advice and disclose all relevant information to the investors will be able to apply for safe harbor in Section 21E of the Exchange Act for forward looking statements.

The SEC released guidance to assist all participants affected by COVID-19 with their upcoming annual shareholder meetings and also expressed its eagerness to help public companies, investment companies, shareholders, and other market participants who contact them, in its press release on March 13th. The commission staff will address issues on a case-by-case basis

Colonial Filings operations during Coronavirus

We share your concern about the Coronavirus and are taking precautions to keep our staff and clients healthy during these turbulent times.  We remain committed to provide the best service possible during this time.  In consideration of public health advisories, we have implemented the following measures to assist you during this time of uncertainty:

  • We will be available for filing of your SEC Forms including the 10-K deadline which is due March 30, 2020 for non-accelerated filers.
  • We will have a small team working in the office with others remotely to ensure that we are available for deliveries and all of your service needs. Our technology and expertise allows us to maintain operations in such a capacity.
  • If you have any questions, please contact us. We will be available by phone and email.

Our main priority is the health and safety of our employees and clients.  We appreciate your understanding in working with us during these times.