SEC ISSUES ORDER EXTENDING CONDITIONAL EXEMPTIONS FROM REPORTING AND PROXY DELIVERY

As part of its response to the effects and economic disruption that the novel coronavirus disease 2019 (“COVID-19”) is causing to the worldwide economy, on March 25, 2020, the Securities and Exchange Commission (“SEC”) issued an order to extend the conditional relief for certain public company filing obligations and to offer relief from proxy delivery rules under the Securities Exchange Act of 1934, as amended (“Exchange Act”).^[1]

This client alert supplements and updates our client alert issued on March 16, 2020, which discusses disclosure and capital markets considerations for U.S. public companies.^[2]

Order Modifying Exemptions from Reporting Requirements

The SEC’s latest conditional exemption order grants public companies affected by COVID-19 a 45-day extension to file or furnish Exchange Act reports that are due between March 1 and July 1, 2020 (extended from reports due between March 1, 2020 and April 30, 2020 that were covered by the SEC’s original exemption order of March 4, 2020).^[3] This extension is subject to certain conditions, including filing a Current Report on Form 8-K (or Form 6-K for foreign private issuers) by the report’s original filing deadline with a statement as to why the delayed report could not be timely filed, an estimated filing date and any company specific risk factors explaining the impact, if material, of COVID-19 on the company’s business. A separate Form 8-K (or Form 6-K) must be furnished for each delayed filing.

The SEC has stated that it may be necessary to further extend the time period during which this relief applies, with any additional conditions the SEC deems appropriate and/or issue other relief.

Furnishing of Proxy and Information Statements

The SEC’s order also, as the March 4, 2020 order did, exempts companies from Exchange Act requirements to furnish proxy materials, annual reports and other soliciting materials by mail where delivery is not possible as a result of COVID-19. Specifically, a company is exempt from the requirements with respect to a shareholder that has a mailing address in an area where, as a result of COVID-19, a common carrier has suspended delivery service of the type or class that the registrant customarily uses to make the solicitation and the registrant has made a good faith effort to furnish the soliciting materials to the shareholder as required by the rules.