Category: COVID-19
Delaware emergency order provides relief regarding changes to annual meetings
As you may know, even though Corp Fin staff had provided relief allowing public companies a relatively simple way to advise their shareholders of a change in the date or location of their annual meetings (including a change to a virtual-only format), companies incorporated in Delaware that needed to make those same changes still had to address the complications associated with compliance with Delaware law. Fortunately, tonight, the Governor of Delaware appears to have come to the rescue with an emergency order that may ease many of those complications.
Corp Fin staff extends conditional relief to incorporation of Part III information
Today, the Corp Fin staff provided some additional relief in the context of incorporation of Part III information (very generally, information about directors and executive officers) into Forms 10-K. As you know, a company is allowed to incorporate into its Form 10-K Part III information from its definitive proxy (or information) statement if filed not later than 120 days after the end of the related ?scal year. If the definitive proxy statement is not timely filed, the company must file an amendment to its Form 10-K by the 120-day deadline to provide the omitted Part III information. New Form 10-K CDI 104.18 will allow a company to rely on the conditional relief provided by COVID-19 Order (Release No. 34-88465 (March 25, 2020) for the filing of the Part III information as long as the 120-day deadline falls within the relief period specified in the Order (March 1 and July 1, 2020) and the company meets the conditions of the Order (see this PubCo post).
SEC Chief Accountant addresses CECL and accounting estimates in light of COVID-19
SEC Chief Accountant Sagar Teotia today issued a Statement on the Importance of High-Quality Financial Reporting in Light of the Significant Impacts of COVID-19, which stressed the importance of continuing to provide high-quality financial information for investors and other stakeholders in these uncertain times. In his statement, among other topics, Teotia addressed estimates and judgments as well as temporary relief provided under the CARES Act that allows banks and other financial institutions to suspend compliance with two provisions of GAAP, including CECL. Teotia emphasized that the Office of Chief Accountant is available for consultation and encouraged companies and others with questions as a result of COVID-19 to contact OCA.
SEC Chair Clayton highlights need for complete disclosure even if periodic reports are delayed due to COVID-19
In a statement issued today, SEC Chair Jay Clayton emphasized that, although the timing of certain company filings may be impacted by COVID-19, the SEC is “keenly focused on ensuring that issuers and other registrants continue to provide material information to investors, including information related to the current and expected effects of COVID-19, as promptly as practicable.” In another statement, this one to a meeting this afternoon of the SEC’s Investor Advisory Committee, Clayton stressed the importance of providing information to investors, particularly “in times of economic shock and uncertainty.” The increased investor demand for information fueled by the uncertainties associated with COVID-19, together with the fact that, as a result of COVID-19, companies may not be able to file required periodic reports on a timely basis, has created “a challenge.”
Corp Fin issues two new CDIs regarding Rule 12b-25 in the context of the SEC’s conditional relief order
The Corp Fin staff has issued two new CDIs regarding Rule 12b-25 in the context of the SEC’s conditional relief order. That order extends for 45 days the filing periods for specified SEC filings due between March 1 and July 1, 2020. (See this PubCo post.) Both of the CDIs reaffirm that companies must comply with the conditions of the order, particularly the Form 8-K/6-K requirement, to take advantage of the relief. Companies that are unable to comply “are encouraged to contact the staff to discuss collateral consequences of late filings.”
Cooley Alert: President Signs CARES Act
On Friday, the President signed into law the ‘‘Coronavirus Aid, Relief, and Economic Security Act” (CARES Act), a $2 trillion relief package intended to provide “emergency assistance and health care response for individuals, families and businesses affected by the 2020 coronavirus pandemic.” Here is a link to our Cooley Alert, which summarizes key portions of the CARES Act: https://www.cooley.com/news/insight/2020/2020-03-29-president-signs-cares-act
SEC provides temporary relief regarding notarization of EDGAR Form ID applications
To address an issue that, as a result of the impact of COVID-19, has impeded some filers from making timely filings on EDGAR, the SEC is providing temporary regulatory relief from the notarization requirement for applications for EDGAR access codes.
Corp Fin issues Disclosure Guidance: Topic No. 9 Coronavirus (COVID-19)
Today, the staff of Corp Fin issued Disclosure Guidance Topic No. 9, which offers the staff’s views regarding disclosure considerations, trading on material inside information and reporting financial results in the context of COVID-19 and related uncertainties. The guidance includes a valuable series of questions designed to help companies assess, and to stimulate effective disclosure regarding, the impact of the coronavirus. As always these days, the guidance makes clear that it represents only the views of the staff, is not binding and has no legal force or effect.
SEC extends conditional relief related to coronavirus (COVID-19)
Today, in light of the continuing impact of COVID-19, the SEC issued an order extending the filing periods covered by its previous conditional reporting relief. The order provides public companies with a 45-day extension to file or furnish specified SEC filings that would otherwise have been due between March 1 and July 1, 2020. The order supersedes and extends the SEC’s original order of March 4, 2020, which had applied to filings due between March 1 and April 30, 2020. As SEC Chair Jay Clayton observed, “[h]ealth and safety continue to be our first priority….These actions provide temporary, targeted relief to issuers, investment funds and investment advisers affected by COVID-19. At the same time, we encourage public companies to provide current and forward-looking information to their investors and, in these uncertain times, companies are reminded that they can take steps to avail themselves of the safe harbor in Section 21E of the Exchange Act for forward-looking statements.” At the same time, the staff of Corp Fin issued Disclosure Guidance Topic No. 9, which offers the staff’s views regarding disclosure considerations and other securities law obligations in the context of COVID-19 and related uncertainties (to be covered in a separate post). The SEC encourages companies to contact the SEC staff with questions or matters of particular concern, such as administrative issues related to inability to obtain a required signature due to a quarantine or other issues that may need to be addressed on a case-by-case basis.
SEC staff offers relief regarding manual signature retention requirements for electronic filings in light of COVID-19
The staff of various SEC divisions, including Corp Fin, has just issued a new Statement Regarding Rule 302(b) of Regulation S-T in Light of COVID-19 Concerns. The statement offers some relief in connection with “the authentication document retention requirements under Rule 302(b) [of Reg S-T] in light of health, transportation, and other logistical issues raised by the spread of coronavirus disease 2019 (COVID-19).”
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