Securities

The U.S. securities markets are regulated by the Securities and Exchange Commission (SEC) and self-regulatory organizations, such as the Financial Industry Regulatory Authority (FINRA).  The SEC’s mission is to protect investors; maintain fair, orderly and efficient markets; and facilitate capital formation.  It fulfills this mission by requiring timely and comprehensive disclosures from public companies, conducting examinations and inspections of regulated entities, and bringing enforcement cases against those that violate securities laws and SEC’s rules.  Since the outbreak of COVID-19, the SEC’s regulatory actions have largely focused on extending filing deadlines and requirements and providing other relief to regulated entities. 

= Actions considered to be most consequential

1 - Securities and Exchange Commission (SEC)

Date of Action:

05/04/2020

Summary of Action: Relief amending requirements of Regulation Crowdfunding to allow eligible issuers to raise up to $250,000 under Regulation Crowdfunding on an expedited basis.

https://www.sec.gov/news/press-release/2020-101

Type of Policy: Temporary Final Rule

Expires: September 1, 2021

2- Securities and Exchange Commission (SEC)

Date of Action:

04/22/2020

Summary of Action: Those broker-dealers relying on the exemption from customer protection provisions of Rule 15c3-3 in paragraph (k)(2) of the rule, i.e. who carry no margin accounts and promptly transmit all customer funds and deliver securities connected to broker-dealer activities, may continue, during April, May, or June, to rely on the exemption even if transmission of customer checks is delayed as a result of COVID-19, so long as checks are transmitted as promptly as practicable and customers are notified of alternative ways to access funds.

https://www.sec.gov/tm/faq-covid-19-broker-dealer-financial-responsibility-rules

Type of Policy: Agency statement in FAQ

Expires: June 30, 2020

3 - Securities and Exchange Commission (SEC)

Date of Action:

04/22/2020

Summary of Action: Staff will not recommend enforcement if broker-dealers, during April, May, or June, to conduct required quarterly counts of physical securities, so long as broker-dealers notify the SEC and provide estimated count, and maintain sufficient records to allow them to accurately count physical securities later.

https://www.sec.gov/tm/faq-covid-19-broker-dealer-financial-responsibility-rules

Type of Policy: Agency statement in FAQ

Expires: June 30, 2020

4- Securities and Exchange Commission (SEC)

Date of Action:

04/10/2020

Summary of Action: Relief from requirement to file hard copy of Form 144, provided that a form is submitted via email with appropriate signatures and the filer maintains a hard copy, among other requirements.

https://www.sec.gov/corpfin/announcement/form-144-paper-filings-email-option

Type of Policy: Staff Statement

Expires: 6/30/2020

5 - Securities and Exchange Commission (SEC)

Date of Action:

04/20/2020

Summary of Action: Grants broker-dealers additional time to begin reporting to the Consolidated Audit Trail (CAT).

https://www.sec.gov/news/press-release/2020-92

Type of Policy: Exemptive Order

Expires: No Expiration Date

6 - Securities and Exchange Commission (SEC)

Date of Action:

04/08/2020

Summary of Action: Temporary and conditional relief for Business Development Companies to invest beyond their asset coverage requirements and permits them to co-invest with affiliated funds.

https://www.sec.gov/news/press-release/2020-84

Type of Policy: Exemptive Order

Expires: 12/31/2020

7 - Securities and Exchange Commission (SEC)

Date of Action:

04/07/2020

Summary of Action: Updated Division of Corporate Finance Guidance to companies planning for shareholder meetings, in light of COVID-19, including that staff would  excuse late-filings of proxy materials, allow more leniency towards issuers conducting virtual shareholder meetings, permit management to exclude the proposals of those shareholders who cannot attend the meeting, etc.

https://www.sec.gov/ocr/staff-guidance-conducting-annual-meetings-light-covid-19-concerns

Type of Policy: Staff Guidance

Expires: Guidance is for the 2020 proxy season.

8 - Securities and Exchange Commission (SEC)

Date of Action:

04/02/2020

Summary of Action: Staff will not recommend enforcement action for failure to comply with requirements relating to submission of paper documents, provided impacted filers discuss with SEC staff appropriate measures, take appropriate steps to electronically file documents, and maintain paper copies as appropriate.

https://www.sec.gov/tm/paper-submission-requirements-covid-19

Type of Policy: Staff Statement

Expires: 06/30/2020

9 - Securities and Exchange Commission (SEC)

Date of Action:

03/30/2020

Summary of Action: Staff guidance/FAQ on “surprise exams” – SEC will not hold companies responsible for not supporting surprise exams if the personnel or documents cannot be procured due to COVID-19.

https://www.sec.gov/divisions/investment/custody_faq_030510.htm

Type of Policy: Staff Guidance

Expires: No expiration date set.

10 - Securities and Exchange Commission (SEC)

Date of Action:

03/26/2020

Summary of Action: Temporarily allows those who want to gain access to filing through EDGAR system to do so without first obtaining notarization.

https://www.sec.gov/news/press-release/2020-74 

Type of Policy: Exemptive Order

Expires: 07/01/2020

11 - Securities and Exchange Commission (SEC)

Date of Action:

03/25/2020

Summary of Action: Allows affiliates of an open-end registered investment company that does not hold themselves out as a money market fund (and that is not an exchange-traded fund) to take advantage of provisions of Rule 17a-9 that provide exemptions from Investment Act Section 17(a) prohibitions of affiliated purchases; Rule 17a-9 exemptions, by their terms, only apply to affiliates of money market funds.

https://www.sec.gov/investment/investment-company-institute-032620-17a 

Type of Policy: Staff No-Action Letter

Expires: No expiration date set.

12 - Securities and Exchange Commission (SEC)

Date of Action:

03/25/2020

Summary of Action: Relief from filing deadline for municipal advisor’s annual update to Form MA; if form was due on June 30 or earlier, if the filer files within 45 days after the original due date for the filing.

https://www.sec.gov/rules/exorders/2020/34-88491.pdf 

Type of Policy: Temporary Exemptive Order

Expires: Applies where filing deadline is June 30, 2020 or earlier; filer has additional 45 days to file.

13 - Securities and Exchange Commission (SEC)

Date of Action:

03/25/2020

Summary of Action: Extensive guidance on disclosures in light of COVID-19, including disclosure of risks associated with COVID-19 and reporting of earnings and financial results.

https://www.sec.gov/corpfin/coronavirus-covid-19   

Type of Policy: Staff Guidance

Expires: No expiration date set.

14 - Securities and Exchange Commission (SEC)

Date of Action:

03/25/2020

Summary of Action:

Temporary relief from provisions of Rule 606, specifically:

 

  • broker-dealers are exempt from the requirement to provide the public report covering the first quarter of 2020 required by Rule 606(a) until May 29, 2020;

  • broker-dealers that engage in outsourced routing activity are exempt from the requirement to collect the monthly customer-specific data required by Rule 606(b)(3) for such activity until June 1, 2020, and are exempt until July 29, 2020, from the requirement to provide a customer-specific report of June 2020 outsourced routing data within seven business days for customer requests for such customer-specific reports that are made on or before July 17, 2020

https://www.sec.gov/rules/exorders/2020/34-88478.pdf

Type of Policy: Temporary Exemptive Order

Expires: Deadline for broker-dealers to provide Rule 606(a) public report is May 29, 2020; BDs do not have to collect 606(b)(3) data until June 1, 2020, and are exempt until July 29, 2020 from providing data in response to customer request made on or before July 17, 2020.

15 - Securities and Exchange Commission (SEC)

Date of Action:

03/25/2020

Summary of Action: Temporary relief from filing deadlines, for issuers using Reg. A or Reg. Crowdfunding, to file required reports or forms, where the deadline is May 31, 2020, and the filer files the required report within 45 days from the original deadline.

https://www.sec.gov/rules/interim/2020/33-10768.pdf

Type of Policy: Temporary Final Rule

Expires: Applies where filing deadline is May 31, 2020 or earlier; filer has additional 45 days to file.

16 - Securities and Exchange Commission (SEC)

Date of Action:

03/25/2020

Summary of Action: Gives certain public companies an additional 45 days to file disclosure reports that would have been due between March 1 and July 1, 2020. 

https://www.sec.gov/news/press-release/2020-53

Type of Policy: Exemptive Order

Expires: 07/01/2020 (companies have an additional 45 days from original due date to make filings)

17 - Securities and Exchange Commission (SEC)

Date of Action:

03/25/2020

Summary of Action: Broad exemption to permit delayed filings of proxy materials with the Commission.

https://www.sec.gov/rules/exorders/2020/34-88465.pdf

Type of Policy: Exemptive Order

Expires: 07/01/2020

18 - Securities and Exchange Commission (SEC)

Date of Action:

03/25/2020

Summary of Action: Provides an extension to broker-dealers from complying with certain aspects of an SEC rule that requires them to disclose publicly how they route their trading (Rule 606).  The relief also exempts certain collection requirements until July 29, 2020.

https://www.sec.gov/rules/exorders/2020/34-88478.pdf

Type of Policy: Exemptive Order

Expires: May 29, 2020 for order routing disclosures; July 29, 2020 for collection requirements

19 - Securities and Exchange Commission (SEC)

Date of Action:

03/25/2020

Summary of Action: Provides relief to mutual funds from delivery of prospectuses or holding in-person board meetings for mutual funds or business development companies.

https://www.sec.gov/rules/other/2020/ic-33824.pdf

Type of Policy: Exemptive Order

Expires: June 30, 2020, for relief related to in-person board meetings and FORM N-23C-2 and August 15, 2020, for all other relief

20 - Securities and Exchange Commission (SEC)

Date of Action:

03/24/2020

Summary of Action: Relief from Rule 302(b) of Reg. S-T requiring a manually signed signature form to accompany electronic filings, executed at or before the time of the electronic filing; relief allows signatories to provide manually signed signature page to filer “as promptly as reasonably practicable.” 

https://www.sec.gov/corpfin/announcement/staff-statement-regarding-rule-302b-regulation-s-t-light-covid-19-concerns

Type of Policy: Staff No-Action Statement

Expires: No expiration date set.

21 - Securities and Exchange Commission (SEC)

Date of Action:

03/23/2020

Summary of Action: Permits mutual funds (but not money market funds) to borrow from affiliated entities/sponsors.

https://www.sec.gov/news/press-release/2020-70

Type of Policy: Exemptive Order

Expires: 06/30/2020

22 - Securities and Exchange Commission (SEC)

Date of Action:

03/20/2020

Summary of Action: Provides temporary relief for transfer agents from certain reporting and recordkeeping requirements, as well as requirement for transfer agents, exchanges, BDs, clearing agencies, securities information processors, and national securities associations to submit fingerprints of officers and directors to DOJ.

https://www.sec.gov/rules/exorders/2020/34-88448.pdf

Type of Policy: Exemptive Order

Expires: 05/30/2020

23 - Securities and Exchange Commission (SEC)

Date of Action:

03/19/2020

Summary of Action: Provides relief allowing affiliates of money market funds to purchase securities from those funds without complying with the provisions of Rule 17a-9 that conflict with banking regulations affiliates are subject to. 

https://www.sec.gov/investment/investment-company-institute-031920-17a

Type of Policy: No-Action Letter

Expires: No expiration date set.

24 - Securities and Exchange Commission (SEC)

Date of Action:

03/16/2020

Summary of Action: Provides stock exchanges with relief from Consolidated Audit Trail (CAT) implementation deadlines so that those firms that report into CAT can maintain focus on operational readiness, allowing them to reduce operational risk.  Exchanges announced they would not take disciplinary action against members for failing to meet deadlines following announcement of SEC relief.

https://www.sec.gov/divisions/marketreg/mr-noaction/2020/consolidated-audit-trail-reporting-031620.pdf

Type of Policy: No-Action Letter

Expires: 05/20/2020

25 - Securities and Exchange Commission (SEC)

Date of Action:

03/13/2020

Summary of Action: Provides relief for funds and investment advisers from requirements for in-person board meetings and certain filing deadlines.  

https://www.sec.gov/news/press-release/2020-63

Type of Policy: Exemptive Order

 

Expires: Relief related to in-person board meetings and FORM N-23C-2 expires on June 15, 2020; all other relief expires on April 30, 2020

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