The U.S. Securities and Exchange Commission (SEC) issued an order on March 4, 2020 and further amended the order on March 25, 2020 granting conditional regulatory relief for filing obligations of publicly-traded companies under the Securities Exchange Act of 1934 (Exchange Act) for companies affected by the COVID-19 pandemic. The order covers filings due between March 1, 2020 and July 1, 2020 and provides a 45-day filing extension if the required conditions are met.

Exempt Filings

The extension is available for the filing requirements under the following Exchange Act provisions, which govern, among other things, the filing of annual reports on Form 10-K, quarterly reports on Form 10-Q and proxy materials:

  • Sections 13(a), 13(f), 13(g), 14(a), 14(c), 14(f), 15(d)
  • Regulations 13A, Regulation 13D-G, 14A, 14C, 15D
    • Exception: Provisions requiring the filing or amendment of Schedule 13D
  • Exchange Act Rules 13f-1, 14f-1

Filing Exemption Eligibility

The following conditions must be satisfied in order for the exemption to apply:

  1. The registrant was unable to meet the filing deadline due to circumstances related to the COVID-19 pandemic;
  1. By March 16, 2020 or the original filing date deadline, whichever is later, the registrant must submit a Form 8-K (or Form 6-K for foreign private issuers) to the SEC stating (a) it is relying on the order, (b) a brief description detailing why a timely filing could not be made, (c) the estimated date that the filing is expected to be made, (d) risk factors detailing the COVID-19 impact on the company (if the impact is material), and (e) if the delay in filing is caused by a person other than the registrant, a signed statement attached as an exhibit signed by such person stating the specific reasons for the delay;
  1. The registrant must file any required report, schedule, or form no later than 45 days after the original due date; and
  1. The registrant must include with the filing a statement affirming that the registrant is relying on the order and detailing the reasons the filing could not be made on a timely basis.

Conditions for Exemption from Furnishing Material to Security Holders

The following conditions must be satisfied in order to be fully exempt from the requirements of furnishing material to security holders under Exchange Act Sections 14(a) and (c) and Regulations 14A and 14C and Exchange Act Rule 14f-1:

  1. The mailing address of the security holder is in an area where mail has been suspended as a result of COVID-19; and
  1. A good faith effort has been made by the registrant or person making the solicitation to furnish the materials to the security holder according to the applicable rules.

Other Resources

On March 26, 2020, Nasdaq issued a memorandum providing, among other things, that any company that satisfies the requirements listed in the SEC’s order and is eligible for the 45-day extension discussed above will have also satisfied requirements under Nasdaq Rule 5250(c) and will not receive a deficiency letter from Nasdaq for failing to file Exchange Act reports by the applicable due date. Any company unable to file a report by the due date but is not eligible for the 45-day extension pursuant to the SEC’s order “can submit a plan to Nasdaq Listing Qualifications describing how they intend to regain compliance and, under the Listing Rules, Listing Qualifications’ staff can allow them up to six months to file.”

For more information about Nasdaq listed companies and the impact of COVID-19:

https://listingcenter.nasdaq.com/assets/Listing%20Center%20Coronavirus%20FAQs%20for%20Nasdaq-listed%20Companies.pdf

 


 

The staff of the SEC’s Division of Corporation Finance has issued several Compliance and Disclosure Interpretations (C&DIs) clarifying how the exemption provided in the order will apply in certain circumstances.  These C&DIs cover the impact of the order on registrants relying on a Rule 12b-25 filing extension and on how Part III information should be incorporated into a Form 10-K in various scenarios. These C&DIs can be found here:

https://www.sec.gov/divisions/corpfin/guidance/exchangeactrules-interps.htm#135.12

March 4, 2020 Order:

https://www.sec.gov/rules/other/2020/34-88318.pdf

March 25, 2020 Amended Order:

https://www.sec.gov/rules/exorders/2020/34-88465.pdf

Kenn Webb has practiced business law and been actively involved in civic and charitable affairs in the City of Dallas for 35 years. He has represented businesses ranging from industry leaders to start-up ventures in many industries, including energy, retail, transportation, technology development, manufacturing, construction materials, and investment banking.

Chris provides expertise and experience across a spectrum of business transactions, including mergers and acquisitions, securities offerings and compliance, public company governance, private equity and venture capital financing and information technology contracting.

Justin focuses on helping businesses through all stages of their existence. As an entrepreneur, he is passionate about providing tangible value to his clients and ensuring that they receive proper advice to avoid common, as well as hidden, pitfalls and mistakes.

Before joining FBFK, Tricia spent fifteen years as a business owner. Combining her experience of entrepreneurship and small business management with her passion of advocating and negotiating for the client, Tricia has a unique appreciation and insight into the challenges many business owners face.

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