As a continued response to the outbreak of Coronavirus Disease 2019 (COVID-19), the US Securities and Exchange Commission (SEC) took additional regulatory actions to address potential compliance issues in SEC filings.
Extended SEC Filing Relief for Public Companies through July 2020
On March 25, 2020, the SEC issued an Order extending the time period subject to its prior regulatory relief for certain public company filing obligations under the Exchange Act. The Order supersedes and extends the SEC's prior March 4, 2020 order.
Subject to certain conditions, the Order provides public companies with an additional 45 days to file certain disclosure reports that would otherwise have been due between March 1 and July 30, 2020 (the original extension applied to filings through April 30, 2020). Filings covered by the Order include Forms 10-K, 10-Q, 8-K, and 20-F, and Schedule 13G (but not Schedule 13D or filings under Section 16 of the Exchange Act).
A company may qualify for the relief if it is not able to meet a filing deadline for a covered report or document due to circumstances related to COVID-19 and satisfies the following additional conditions:
- The company files with the SEC a Form 8-K or furnishes a Form 6-K, as applicable, by the original filing deadline of the report, providing a summary of why the relief is needed in their particular circumstances. A Form 8-K or Form 6-K is required for each filing that is delayed. Specifically, the report must include:
- a statement that the company is relying on the Order;
- a brief description of the reasons why it could not file the report on a timely basis and the estimated date by which the filing is expected to be made;
- if the reason is due to the inability of someone other than the company to furnish timely a required opinion, report or certificate, an exhibit with a signed statement of that person giving the specific reasons why such opinion, report or certificate cannot be provided to the company by the deadline for the company's SEC filing; and
- if appropriate, a risk factor explaining, if material, the impact of COVID-19 on its business.
- The company files with the SEC the report no later than 45 days after the original due date and discloses in the report that it is relying on the Order and the reasons why it cannot make the filing on a timely basis.
The SEC has taken the position that for purposes of eligibility to use Form S-3 or Form F-3, a company relying on the Order will be considered current and timely in its Exchange Act filing requirements if (i) it was current and timely as of the beginning of the relief period, and (ii) it files any report due during the relief period within 45 days of the filing deadline for the report.
The SEC has also taken the position that for purposes of Form S-8 eligibility and the current public information requirements of Rule 144(c), a company relying on the Order will be considered current in its Exchange Act filing requirements if (i) it was current as of the beginning of the relief period, and (ii) it files any report due during the relief period within 45 days of the filing deadline for the report.
Companies relying on the Order will be considered to have a due date 45 days after the filing deadline for the applicable report. Accordingly, if a company is unable to file the report on or before the extended due date, the company will be able to rely on Rule 12b-25 for an additional 15 days in which to file the report.
Relaxed "Manual Signature" Requirement under Regulation S-T
On March 25, 2020, the SEC also issued Guidance regarding the manual signature requirement of Rule 302(b) of Regulation S-T. Rule 302(b) requires that, prior to or at the time of an electronic filing, each signatory to the filing manually sign the filing. Filers must retain such manually signed documents for a period of five years and provide copies to the SEC or its staff upon request.
In light of the difficulties the COVID-19 pandemic has created in obtaining manual paper signatures, the staff has stated that it will not recommend enforcement action if:
- a signatory manually signs the filing and provides the manually signed document to the filer as promptly as reasonably practicable for retention in the ordinary course;
- the manually signed filing indicates the date and time when it was executed; and
- the filer establishes and maintains policies and procedures governing the process.
The staff also stated that the signatory may provide to the filer an electronic copy (such as a photograph or pdf) of the manually signed filing when it was signed.
We encourage you to check Baker McKenzie’s Coronavirus Resource Center for other analysis and resources designed to help understand, prepare and respond to the challenges posed by COVID-19 and its impact on capital markets and the economy. To the extent that we can be helpful in thinking through questions or concerns regarding any compliance and disclosure best practices during the COVID-19 pandemic, please do not hesitate to reach out to your Baker McKenzie contact.