Following the SEC’s announcement on March 4, 2020 that it was providing conditional relief to public companies affected by COVID-19 for their filing obligations under the federal securities laws, many companies have availed themselves of this relief.
In addition, several companies have already identified risks related to COVID-19 that are material to their businesses and investors, often noting that the full impact of the global pandemic remains uncertain. For additional guidance on ongoing reporting requirements in the face of COVID-19, see SEC Enforcement and COVID-19 Disclosure and Insider Trading Risks for Issuers.
We encourage all companies to continue to evaluate business conditions, review existing disclosures and consider whether any risks or developments related to COVID-19 are material to their investors. As the SEC noted in its announcement, companies should refrain from engaging in securities transactions until these material risks and developments have been adequately and appropriately disclosed. Our capital markets team is here to help as you consider the impact (both direct and indirect) of COVID-19 on your business.
The SEC’s relief order provides an additional 45 days for affected companies to file certain reports, schedules and other filings that would otherwise have been due between March 1 and April 30, 2020. Notably, the relief does not extend to filings on Schedule 13D (or amendments thereto) or to filings on Form 3, 4 or 5. The relief provided by the order is subject to the following conditions:
- The registrant or any person required to make a filing with respect to a registrant must be unable to meet a filing deadline due to circumstances related to COVID-19;
- A registrant relying on the order must furnish to the SEC a Form 8-K (or, if eligible, a Form 6-K) by the later of March 16 or the original filing deadline of the report stating:
- that it is relying on the order;
- a brief description of the reasons why it could not make the filing on a timely basis;
- the estimated date by which the filing is expected to be made;
- if material, a risk factor explaining the impact of COVID-19 on its business; and
- if the reason the filing cannot be made on a timely basis relates to the inability of any third party to furnish any required opinion, report or certification, the Form 8-K or Form 6-K must attach as an exhibit a statement signed by that person stating the specific reasons why the person is unable to furnish the required opinion, report or certification on or before the date the filing was required to have been made.
- The person makes the filing no later than 45 days after the original due date; and
- The filing discloses that the filer is relying on the order and states the reasons why it could not make the filing on a timely basis.
The SEC has further clarified that it will take the following positions with respect to certain obligations under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended:
- For purposes of eligibility to use Form S-3 (and for well-known seasoned issuer status, which is based in part on Form S-3 eligibility), a company relying on the exemptive order will be considered current and timely in its Exchange Act filing requirements if it was current and timely as of the first day of the relief period and it files any report due during the relief period within 45 days after the filing deadline for the report.
- For purposes of the Form S-8 eligibility requirements and the current public information eligibility requirements of Rule 144(c), a company relying on the exemptive order will be considered current in its Exchange Act filing requirements if it was current as of the first day of the relief period and it files any report due during the relief period within 45 days after the filing deadline for the report.
- Companies that receive an extension on filing Exchange Act annual reports or quarterly reports pursuant to the order will be considered to have a due date 45 days after the filing deadline for the report. As such, those companies will be permitted to rely on Rule 12b-25 if they are unable to file the required reports on or before the extended due date.
We will continue to provide updates on the SEC’s response to this ongoing public health crisis and keep you informed regarding evolving best practices.