SEC reporting deadline extended an additional 45 days for public companies
On March 25, the Securities and Exchange Commission (SEC) issued an order, superseding its March 4 order, providing COVID-19-impacted registrants temporary relief from certain filing and regulatory requirements. The order provides an additional 45 days to make required Exchange Act filings that would have been due between March 1 and July 1, 2020, if a registrant is unable to meet a deadline because of circumstances related to COVID-19.
The order specifies a Form 8-K (or Form 6-K for foreign private issuers) is required to be filed by the later of March 16, 2020, or the original report deadline, and the Form 8-K (or Form 6-K) should include:
- A statement that the registrant is relying on the order
- A brief description of why it could not file on time
- The estimated date by which the report or form is expected to be filed
- If appropriate and material, a risk factor explaining the effect of COVID-19 on its business
- If the reason the report could not be filed on time relates to the inability of any person, other than the registrant, to furnish any required opinion, report, or certification, an exhibit statement signed by such person stating the specific reasons why he or she is unable to furnish such items
Note: Registrants should consider the concepts expressed in “CF Disclosure Guidance Topic No. 9: Coronavirus (COVID-19)” (see below) when preparing their Form 8-K (or Form 6-K) disclosures, including the description of why they could not file on time and, when appropriate, additional risk factor disclosure.
A Form 12b-25 would not need to be filed if the report is filed within 45 days of the original SEC filing deadline, and a registrant can rely on Rule 12b-25 if it is unable to file the required reports on or before the extended due date.
Additionally, the SEC clarified that, for purposes of the eligibility to use Form S-3 or Form S-8 and to meet the current public information eligibility requirements of Rule 144(c), a company relying on this temporary relief order will be considered current in its filing requirements under the Exchange Act if it was current as of March 1, 2020, and it files any report due during the relief period within 45 days of the original SEC filing deadline.
The order also provides certain relief for delivery of proxy or information statements to security holders under the Exchange Act when mail delivery is not possible.
Division of Corporation Finance (DCF) releases disclosure and manual signature guidance for Coronavirus (COVID-19)
Concurrent with the order, DCF staff issued “CF Disclosure Guidance Topic No. 9: Coronavirus (COVID-19),” which summarizes the staff’s views regarding disclosure and other securities law obligations that companies should consider with respect to COVID-19 impacts and disruptions. The staff acknowledges the difficulty in precisely assessing or predicting the company-specific COVID-19 impacts because the actual impacts depend on factors beyond a company’s control. However, the staff also points out that company-specific COVID-19 disclosure (for example, the effects of COVID-19 on the company, management’s expectation of future impacts, management’s response to current events, and plans for related uncertainties) might be material to investment and voting decisions.
The guidance reminds registrants of the need for COVID-19-related disclosures within the context of the principles-based disclosure system of the federal securities laws and the commission’s focus on registrant disclosure of new and evolving risks. It then delves deeper into specific disclosure topics, including:
Assessing and disclosing the impact of COVID-19.The guidance provides a list of questions for registrants to ask with respect to their present and future operations and reminds registrants of the availability of safe harbors for forward-looking statements in Section 27A of the Securities Act and Section 21E of the Exchange Act.
The need to refrain from trading prior to the disclosure of material nonpublic information.The guidance reminds registrants of their obligations to monitor their market activities, refrain from selective disclosures, and update disclosures when necessary.
Reporting earnings and financial results.The staff encourages effective project management steps to address unique and complex accounting issues (for example, early engagement of third-party experts for goodwill impairment assessment) and provides thoughts on non-GAAP measures.
Registrants requiring additional guidance are encouraged to contact the staff directly.
Manual signature guidance
On March 24, DCF staff (in conjunction with the Division of Investment Management and the Division of Trading and Markets) released a statement regarding the manual signature requirements for certain documents filed electronically with the commission under Rule 302(b) of Regulation S-T. While the staff continues to expect compliance with the rule, the staff recognizes COVID-19-related health, transportation, and logistical issues. Due to these difficulties, the statement indicates the staff will not recommend enforcement action with respect to Rule 302(b) if the filer meets certain specific procedural requirements, as outlined in the statement.