Alert
Financial Institutions Law Alert
04.01.2020

On March 26, 2020, the U.S. Securities and Exchange Commission (“SEC”) adopted a new temporary rule and entered an Order providing certain additional regulatory relief and assistance as a result of the COVID-19 pandemic.  The temporary rule provides relief relating to an EDGAR filing process and certain filing obligations applicable under Regulation Crowdfunding and Regulation A.  The Order extends the deadline, subject to certain conditions, for municipal advisors to file annual Form MA updates.  ‚Äč

Access to EDGAR

Pursuant to Regulation S-T and rules promulgated thereunder, Form ID must be submitted to the SEC to gain access to EDGAR for filing purposes.  Applicants who apply for EDGAR filing access are required to submit a notarized authentication document with Form ID.  As a result of the COVID-19 pandemic, there are significant challenges associated with having documents notarized.   The temporary rule gives the SEC Staff the authority to establish EDGAR filing accounts and issue access codes irrespective of whether the authentication documentation is notarized during the period of March 26, 2020 through July 1, 2020 subject to certain conditions.  The applicant must indicate in the authentication document that they were unable to have said document notarized due to the circumstances surrounding the COVID-19 pandemic.   Notably, the applicant is required to submit a notarized copy of the authentication document within 90 days after receiving the authentication code or their access could be terminated.

A copy of the temporary rule is located at:  https://www.sec.gov/rules/interim/2020/33-10768.pdf

Regulation A and Regulation Crowdfunding Filings

Regulation Crowdfunding and Regulation A permit offers and sales of securities without registration under the Securities Act, subject to certain limitations and conditions, including compliance with ongoing reporting requirements.  The SEC issued a temporary rule exempting issuers who are required to file reports or forms pursuant to Regulation Crowdfunding and Regulation A from having to file said reports and/or forms if they are unable to meet the filing deadline due to circumstances related to COVID-19.  For Regulation Crowdfunding, the relief applies to annual reports on Form C-AR, progress updates on Form C-U, and termination of reporting on Form C-TR.13.  For Regulation A, the relief applies to post-qualification amendments required at least every 12 months after the qualification date to include updated financial statements, annual reports on Form 1-K, semi-annual reports on Form 1-SA, special financial reports on Forms 1-K or 1-SA, current reports on Form 1-U, and exit reports on Form 1-Z.14

The temporary rule requires that the issuer promptly disclose that it is relying on the temporary rule on its public website, a website for Regulation Crowdfunding issuers intermediary’s platform, or via direct investor notification.   The issuer is required to file any filing or form that was delayed during the period of March 26, 2020 to May 31, 2020 within 45 days from the filings original due date.  The issuer must indicate in the filing or form that it relied on the temporary rule and state the reasons why, in good faith, it could not timely file the report or form. 

A copy of the temporary rule is located at: https://www.sec.gov/rules/interim/2020/33-10768.pdf

Annual Update to Form MA for Municipal Advisors

The SEC issued an Order granting a temporary conditional exemption from certain of the requirements applicable to municipal advisors under the Securities and Exchange Act 0f 1934.  The temporary conditional exemption relates to annual Form MA updates due from March 26 to June 30, 2020.  The relief is not self-executing.  Municipal Advisors who are unable to meet the deadline for filing their annual Form MA update due to COVID-19 must notify the SEC Staff via email (munis@sec.gov) that they are relying on the Order and include a brief description of the reasons why it could not file its annual update to Form MA on a timely basis.

A copy of the Order is located at: https://www.sec.gov/rules/exorders/2020/34-88491.pdf

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