7 Areas of Relief Offered by the SEC and CFTC Related to COVID-19

COVID-19 is extending beyond the health arena into every aspect of our work and personal lives. It’s safe to say that everybody’s lives have been dramatically affected. As businesses scramble to reevaluate their strategies for the rest of the year, U.S. regulatory agencies are looking into ways to relieve pressure for their constituency in this time of crisis. Below are some of the COVID-19 relief options currently being offered.

SEC Relief

Extra 45 days to file reports due between March 1 and July 1, 2020. To qualify for this extension, companies would need to provide a summary report of why the relief is necessary for each periodic report that is delayed. Learn more.

Companies can hold annual meetings with security holders virtually in lieu of compliance with in-person voting requirements. Companies must notify Division staff and investors of intent to rely on this relief, but do not need to describe why they are relying on the order or estimate a date for the required action.

• Reliance must be necessary and appropriate due to circumstances related to current or potential effects of COVID-19.
• Votes required to be cast at an in-person meeting are cast at a meeting where the directors can participate using any means of communication, but must allow all participating directors to hear each other simultaneously during the meeting.
• At the next in person meeting, the board of directors must ratify the action taken pursuant to this exemption by vote.

Learn more.

Registered Open-End Funds can borrow money from certain affiliates; new flexibility in interfund lending arrangements. Open-end funds can enter into lending arrangements or borrowings that deviate from fundamental policies, subject to board approval, until June 30, 2020. Learn more.

Relief for RIAs. Form ADV, Form PF, Form N-CEN and Form N-PORT filing deadlines are delayed until June 30, 2020. The following conditions must be satisfied:

• Inability to meet filing deadline or delivery requirement related to current or potential effects of COVID-19.
• Notification to the Commission staff via email the intention to rely on the order:
  • ADV - IARDLive@sec.gov and discloses on its public website (or notifies its clients or investors) that intends to rely on the SEC’s order
  • PF - FormPF@sec.gov
  • N-CEN/N-PORT – IM-EmergencyRelief@sec.gov
• Disclosure on its public website (or notifies its clients or investors) that intends to rely on the SEC’s order and delay filing.
• Forms are filed no later than 45 days after the original deadline and include a statement of the filer that it relied on these orders and the reasons why it was unable to file on a timely basis (last part N-CEN and N-PORT only).

Learn more.

Relief for Registered Funds: prospectus delivery.
If a registered fund cannot timely deliver a prospectus due to circumstances relating to COVID-19, and delivery was originally required by April 30, 2020, the fund should:

• Notify the Commission staff via IM-EmergencyRelief@sec.gov, giving them:
  • Notice that it is relying on this Commission position;
  • A brief description of the reasons why it or any other person required could not deliver the prospectus to investors on a timely basis; and
  • The estimated date by which it expects the prospectus to be delivered
• Disclose on its website that the fund intends to rely on the SEC’s order and delay filing.
• Publish its current prospectus on its website.
• Deliver the prospectus as soon as practicable, but not later than 45 days after the date initially required.

Learn more.

Commodities Futures Trading Commission (CFTC) Relief

Extra 45 days for CPO filing requirements. Pool annual report or periodic account statements due on or before April 30, 2020 are extended 45 days. The Commission will not take enforcement action against any CPO for failing to comply with the above requirements.

Extension for CPO-PQR. Small or mid-sized CPOs must file an annual report by May 15, 2020, and large CPOs must file a quarterly report by July 15, 2020. The Commission will not take enforcement action against any CPO for the failing to comply with the above requirements.

Learn more.

If you need help assessing the impact of COVID-19 on your business in these or any other areas, we are here to help.

Contact Caroline Jiang, Lori Novak or a member of your service team to discuss this topic further.

Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law with your professional advisers.