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SEC Regulatory Relief and Guidance for Companies Affected by the Coronavirus

    Client Alerts
  • March 17, 2020

Public companies impacted by the coronavirus pandemic still have time to access regulatory relief from the Securities and Exchange Commission (SEC) for filings due by April 30. In addition, the SEC is providing companies greater flexibility in moving their annual shareholder meetings or hosting them virtually.

Regulatory Relief

On March 4, the Securities and Exchange Commission (SEC) provided conditional regulatory relief from its filing deadlines for companies affected by COVID-19. As a general matter, and subject to a number of qualifications, companies that would otherwise have filings due from March 1 to April 30 may take an additional 45 days to file certain disclosure reports, such as a Form 10-K, Form 10-Q, Form 8-K, or definitive proxy statement.

In order to utilize this relief, a company must furnish a Form 8-K (or Form 6-K, if eligible) to the SEC by the later of March 16 or the original filing deadline:

  • Stating that it is relying on the SEC’s order.
     
  • Providing a brief description of the reasons it cannot timely file the report; the estimated date of filing; and if appropriate and material, a risk factor explaining the impact of the coronavirus on its business.
     
  • If the reason relates to the inability of another person, not the company, to furnish a required opinion, report, or certification, the filing must also have an exhibit containing a statement signed by such person providing the reasons they cannot provide such opinion, report, or certification.

Several companies have already furnished a Form 8-K to take advantage of this relief. As would be expected, a frequent reason given was an inability to travel to, perform work in, or obtain financial records from a country that has been significantly impacted by the coronavirus, such as China or Italy. However, companies have furnished Form 8-Ks that list other reasons, as well.

While this announcement was made after many calendar year end companies had filed Form 10-Ks, the relief is provided for reports that are due on or before April 30. Given the continuing and unknown impact of the coronavirus, companies can look to this regulatory relief offered by the SEC if needed during the weeks ahead.

Annual Meeting Guidance

On March 13, the SEC issued guidance to facilitate the ability of companies to comply with federal securities laws applicable to annual shareholder meetings in light of the coronavirus if changes are made to the date, time, and/or location of the meeting.

If a company has already filed and mailed its definitive proxy materials, shareholders can be notified of a change in date, time, or location of the annual meeting without amending proxy materials or mailing additional soliciting materials if the company (1) issues a press release announcing the change, (2) files the announcement on EDGAR as definitive additional soliciting material, and (3) takes all reasonable steps to inform other proxy process intermediaries and relevant market participants of the change.

If a company has not yet filed and mailed its definitive proxy materials, the SEC encourages those companies to consider whether additional disclosures discussing the possibility that the date, time, or location of the meeting may be changed due to the coronavirus are appropriate.

If a company is now planning to hold a virtual or hybrid annual shareholder meeting, the SEC expects shareholders, proxy process intermediaries, and other market participants to be notified in a timely manner. Such disclosures should include clear directions for how shareholders can remotely access, participate in, and vote at the meeting. Companies that have already filed and mailed their definitive proxy statements can follow the steps in the preceding  paragraph to avoid having to mail additional soliciting materials. Companies are reminded that the ability to hold virtual meetings is governed by state, not federal, law and the company’s governing documents.

For more information, please contact us or your regular Parker Poe contact. You can also find the firm's other alerts related to COVID-19 here