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SEC Issues C&DIs Providing Guidance on the Conditional Relief from Filing Deadlines as a Result of Coronavirus (COVID-19)

As discussed in our recent Viewpoints advisories on March 5, 2020 and on March 26, 2020, the Securities and Exchange Commission (the “SEC”) granted conditional relief to certain issuers that provides an additional 45 days to file certain disclosure reports as a result of the coronavirus (“COVID-19”) pandemic (the “COVID-19 Order”). The conditional relief applies to reports that would have otherwise been due between March 1, 2020 and July 1, 2020. The SEC has since issued new Compliance and Disclosure Interpretations (“C&DIs”) to provide guidance to issuers regarding the COVID-19 Order.[1]

C&DI 135.12 under the Exchange Act Rules

C&DI 135.12 provides that filing only a Notification of Late Filing on Form 12b-25 (a “Form 12b-25”) by the initial due date of a report does not comply with the COVID-19 Order. Instead of filing a Form 12b-25, if an issuer expects that due to COVID-19 it will be unable to file a report of the type covered by Rule 12b-25 on a timely basis without incurring an unreasonable effort or expense and it is uncertain as to its ability to file the required report within the applicable Rule 12b-25 grace period, the issuer should furnish a Form 8-K or Form 6-K, as applicable, complying with the requirements of the COVID-19 Order.

C&DI 135.13 under the Exchange Act Rules

C&DI 135.13 provides that an issuer that filed a Form 12b-25 may not be able to subsequently rely on the COVID-19 Order to extend the filing deadline for the subject report if the issuer did not initially comply with the COVID-19 Order. The C&DI states that the COVID-19 Order is conditioned on an issuer having furnished a Form 8-K or Form 6-K, as applicable, by the later of March 16, 2020 or the original due date of the report and that a Form 12b-25 filing does not extend the original due date of a report. Therefore, unless an issuer that filed a Form 12b-25 also furnished a Form 8-K or Form 6-K, as applicable, by March 16, 2020 or the original due date of the report, the issuer would not be able to rely on the COVID-19 Order. The C&DI also states that, on the other hand, if an issuer relies on the COVID-19 Order, a report will be considered to have a due date 45 days after the original filing deadline for the report and the issuer would be permitted to subsequently rely on Rule 12b-25 if it is unable to file the report on or before the extended due date.

C&DI 104.18 under Exchange Act Forms

C&DI 104.18 provides that an issuer may rely on the COVID-19 Order if it is unable to file the Part III information for its Form 10-K, which is usually incorporated by reference from the issuer’s definitive proxy or information statement or filed as an amendment to the Form 10-K, not later than 120 days after the end of the related fiscal year as long as the 120-day deadline falls within the relief period specified in the COVID-19 Order and the issuer meets the conditions of the COVID-19 Order. The C&DI specifies that:

  • An issuer that timely filed its Form 10-K without relying on the COVID-19 Order should furnish a Form 8-K with the disclosures required in the COVID-19 Order by the 120-day deadline and the issuer would then need to provide the Part III information within 45 days of the 120-day deadline by including it in a Form 10-K/A or definitive proxy or information statement.
  • An issuer may invoke the COVID-19 Order with respect to both the Form 10-K and the Part III information by furnishing a single Form 8-K by the original deadline for the Form 10-K that provides the disclosures required by the COVID-19 Order, indicates that the issuer will incorporate the Part III information by reference and provides the estimated date by which the Part III information will be filed. The Part III information must then be filed no later than 45 days following the 120-day deadline.
  • An issuer that properly invoked the COVID-19 Order with respect to its Form 10-K by furnishing a Form 8-K but was silent on its ability to timely file Part III information may (1) include the Part III information in its Form 10-K filed within 45 days of the original Form 10-K deadline, or (2) furnish a second Form 8-K with the disclosures required in the COVID-19 Order by the original 120-day deadline and then file the Part III information no later than 45 days following the 120-day deadline by including it in a Form 10-K/A or definitive proxy or information statement.

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The SEC has stated that it will address other issuer-related COVID-19 issues on a case-by-case basis in light of their fact-specific nature. The SEC is also encouraging issuers that are unable to rely on the COVID-19 Order to contact the SEC to discuss collateral consequences of late filings.
 

Endnotes
1 In addition to the C&DIs discussed in this Viewpoints advisory, the SEC issued C&DI 112.02 under Exchange Act Forms that provides guidance with respect to the Multijurisdictional Disclosure System (MJDS) and requirements with respect to filing Forms 40-F in light of the COVID-19 Order.

 

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Author

Dan is a corporate and securities attorney whose practice spans the full gamut of corporate law. He has advised clients for nearly two decades in public and private equity and debt financings, securities law matters, mergers and acquisitions, and strategic advice on a broad range of other corporate matters. He capably counsels public and private companies with offerings, compliance, and securities questions and leads buyers and sellers throughout the transaction process. Dan represents life sciences companies as well as clients in other technology fields, financial services, and professional services firms.