Written by Ignacio Celis-Aguirre
On March 26, 2020, the Securities and Exchange Commission (the “Commission”) announced that it would be providing additional temporary regulatory relief to market participants in response to the effects of the Coronavirus Disease 2019 (“COVID-19”). This relief addresses: (1) temporary relief from the notarization requirement for Form ID for certain filers who cannot secure a notarization because of COVID-19; (2) extending the filing deadline for specified Regulation A and Regulation Crowdfunding reports and forms from certain companies unable to file timely reports and forms because of COVID-19; and (3) extending the filing deadline for submitting annual update filings (“Form MA-A”) to Form MA for certain municipal advisors affected by COVID-19.
Temporary Relief from Form ID Notarization Requirement for Certain Applicants
In order to use the Commission’s EDGAR system to make filings, an applicant must normally complete the Form ID application online by uploading as a PDF attachment to the Form ID filing a notarized document, manually signed by the applicant over the applicant’s typed signature, that includes the information required to be included in the Form ID filing and confirms the authenticity of the Form ID filing. To address potential issues filers may have in securing the notarization required to gain access to make filings on the EDGAR system, the Commission has adopted a temporary final rule that provides relief from this notarization requirement from March 26, 2020 through July 1, 2020, subject to certain conditions. Among those conditions, an applicant must indicate on its manually signed Form ID that it could not provide the required notarization due to circumstances relating to COVID-19, and that the applicant submit a PDF copy of the notarized manually signed document within 90 days of obtaining an EDGAR account or else its filing codes will be inactivated by Commission staff. Commission staff may also inactivate a filer’s codes if they have reason to believe that a filer who gained access to EDGAR under this temporary final rule has made illegitimate filings that are inconsistent with the protection of investors.
Extending Deadlines for Compliance with Certain Regulation A and Regulation Crowdfunding Reports and Forms
To address potential compliance issues for Regulation A and Regulation Crowdfunding issuers, the Commission adopted temporary final rules that extend the filing deadlines an additional 45 days for specified reports and forms that companies must file pursuant to those regulations that would otherwise have been due between March 26, 2020 and May 31, 2020. An issuer relying on this relief is subject to the following conditions: (a) the issuer must not able to meet a filing deadline due to circumstances related to COVID-19; (b) the issuer must promptly discloses on its public website or, for Regulation Crowdfunding issuers, through its intermediary’s platform, or provide direct notification to its investors, that it is relying on the temporary final rules; (c) the issuer must file with the Commission, no later than 45 days after the original filing deadline of the report or form, the report or form required to be filed during the period from and including March 26, 2020 to May 31, 2020; and (d) in any such report or form, the issuer must disclose that it is relying on the temporary final rules and state the reasons why, in good faith, it could not file such report or form on a timely basis. This temporary filing relief only applies to the following reports and forms: (1) for Regulation Crowdfunding, the relief applies to annual reports on Form C-AR, progress updates on Form C-U, and termination of reporting on Form C-TR.13; and (2) for Regulation A, the relief applies to post-qualification amendments to include updated financial statements, annual reports on Form 1-K, semi-annual reports on Form 1-SA, special financial reports on Forms 1-K or 1-SA, current reports on Form 1-U, and exit reports on Form 1-Z.
Extending Deadline to File Annual Update to Form MA for Certain Municipal Advisors
To address potential compliance issues municipal advisors may have in timely submitting Form MA-A, the Commission issued a temporary conditional exemptive order (the “Order”) that provides, subject to certain conditions, affected municipal advisors with an additional 45 days to file a Form MA-A that would have otherwise been due between March 26, 2020 and June 30, 2020. In order to take advantage of the Order, the municipal advisor must meet the following conditions: (a) the municipal advisor must be unable to meet the filing deadline for its annual update to Form MA due to circumstances related to current or potential effects of COVID-19; (b) the municipal advisor relying on the Order must promptly notify the Commission staff that it is relying on the Order and provide a brief description of the reasons why it could not file its Form MA-A on a timely basis; (c) the municipal advisor relying on the Order must promptly disclose on its public website (or if it does not have a public website, promptly disclose to its clients) the information required in condition (b) above; and (d) the municipal advisor must file Form MA-A as required by Rule 15Ba1- 5(a)(1) under the Securities Exchange Act of 1934, as amended, as soon as practicable, but not later than 45 days after the original due date for filing.
The Commission has also announced that it will continue to closely track developments, and, if appropriate, may extend the time period for relief announced on March 26, 2020, with any additional conditions it deems appropriate. In addition, the Commission may provide additional relief from other regulatory requirements for those affected by the Coronavirus as circumstances warrant.
If you have any questions, please contact the MSK Corporate & Business Transactions Department.