SEC Extends Relief for Companies Affected by COVID-19
Several recent updates from the Securities and Exchange Commission (SEC) may help SEC registrants meet filing requirements and navigate some key questions around their reporting requirements. The provisions in Release No. 34-88465 provide some relief and clarity during a time when many businesses are adjusting to disruption related to remote work arrangements and other significant operational and financial challenges caused by the COVID-19 virus pandemic.
Extensions for Filings
The recent release extends the amount date of filings that may take advantage of the temporary 45-day filing requirement grace period for companies affected by the COVID-19 virus. The temporary grace period, which the SEC first announced on March 4, provides some relief to companies required to file reports that include Forms 10-K and 10-Q that are due on or before July 1, 2020. This relief includes employee benefit plans required to file on Form 11-K with a filing deadline of July 1, 2020 or earlier. It is also expected that the Department of Labor and IRS will grant Form 5500 filing relief, however, to date there has been no announcement.
To take advantage of the relief, companies must file a Form 8-K (or Form 6-K for a foreign private issuer) by the original report deadline in order to obtain the temporarily relief. Companies must include a summary in the Form 8-K (6-K) of why the organization seeks the filing relief for each Exchange Act report that is delayed. If the reason the company cannot file the report on time relates to the inability of another person (other than the company) to furnish an opinion or report, the Form 8-K (6-K) must include a statement signed by that individual as an exhibit, similar to the requirements of Rule 12b-25(c). When an organization eventually files its delayed report, disclosure should be made that the company relied on the order and also include the reasons for not filing on time.
Guidance also came from the SEC around staff views on disclosure and other securities law obligations that companies should consider with respect to the COVID-19 pandemic and related business and market disruptions. The guidance includes a series of questions about a wide range of risks related to the COVID-19 virus that companies should consider disclosing. Companies should be specific about the COVID-19 effects on the entity and provide detail about how the company is responding to these risks.
The SEC staff indicated it considers the impact of COVID-19 events important disclosures that should be made by registrants when issuing or purchasing securities or executing insider trades.
The SEC staff also issued a statement related to Regulation S-T Rule 302(b) requiring each signatory to physically sign a signature page or other document that appears in typed form in documents filed electronically with the SEC. Given the circumstances surrounding the COVID-19 pandemic, the SEC staff said it will not recommend that the Commission take enforcement action related to this requirement if certain conditions are met.
More Details to Come
Events and circumstances continue to move quickly and are changing by the hour regarding the COVID-19 virus. Our team is ready to help you stay-up-to-date on the critical issues that affect your business. For discussion on accounting considerations from COVID-19, please see our article below. You may also visit our COVID-19 Resource Center for complete coverage.
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