On April 16, 2020, the North American Securities Administrators Association (NASAA) released a chart detailing each state’s regulatory response to the COVID-19 pandemic. While the Securities and Exchange Commission (SEC) has well-known securities laws imposing requirements on entities offering and selling securities, the US states also maintain state-level securities laws known as Blue Sky Laws, typically requiring sellers of new issues to register offerings and provide financial details of a deal and the entities involved; Blue Sky Laws also generally mandate licenses for broker firms, investment advisers and individual brokers offering securities in a state. As observed by the NASAA President, the chart reveals that state securities regulators, charged with implementing such laws, remain active, responsive and committed to “maintaining essential regulatory operations,” even as most have shifted to working remotely through telecommuting.
The chart first sets forth information about the continued operation of state securities regulators, including whether staff are available by phone/email, whether regulators have flagged possible delays for the Central Registration Depository for broker-dealers and associated persons (CRD) and the Investment Advisor Registration Depository (IARD) licensing or mail processing, and whether electronic filings are encouraged or mandated in response to the COVID-19 shutdowns. The chart also specifies forms of relief from certain state regulatory requirements, including relief for displaced securities professionals in the event that, for example, they are working outside of the jurisdiction in which they are currently registered because of the COVID-19 outbreak. In addition, many states’ Blue Sky Laws require state-level filing of certain securities offerings including, for example, securities offered under Regulation D. The chart notably indicates any state relief for late paper filings of such offering documents, and provides links to further information about related forms of relief offered. We are not aware of any states that have suspended such filing requirements at this time.
This note provides a brief overview of the manner in which the securities regulators in three key jurisdictions captured in the NASAA chart—New York, California and Texas—have responded to the adverse impacts caused by COVID-19 on the securities industry. Though different in nature, each have taken steps to ensure some form of regulatory relief to industry participants, including broker-dealers, investment advisers and those submitting filings of securities offerings pursuant to state law requirements. Our COVID-19 Resource Center has details of other regulatory responses across the globe. Our Financial Regulatory Developments Focus site provides snapshots of the regulatory responses in the EU and U.K. as well as at international level.
The New York Department of Law overseen by the Office of the Attorney General has published guidance from the Investor Protection Bureau (IPB) and the Real Estate Finance Bureau (REF) granting forms of relief from certain filing requirements under the Martin Act, General Business Law (GBL) because of logistical challenges posed by the COVID-19 outbreak. Most significantly, the IPB and REF have extended relief for the filing of Form 99 as required by the Martin Act. Unlike most states which require only a notice filing of the federally required Form D for issuers relying on certain exemptions from registration of applicable securities with the SEC (such as Rule 506 of Regulation D, among others), New York requires that issuers file the New York-specific Form 99 with the IPB or REF (as applicable) when planning to sell exempt securities to New York investors.
However, the relief granted by each bureau is not uniform and there are a few significant differences. The IPB has granted and specified relief in the form of deadline extensions for certain registration filings and electronic supplements to Form 99 (and other) filings. The REF, meanwhile, provides more detailed guidance and associated relief, encouraging those making certain filings with the bureau not to do so until further notice (subject to certain exceptions). Notably, both bureaus have stipulated that those making submissions should expect delays in reviews due to alternative work schedules and telecommuting.
On its website, the Texas State Securities Board (Securities Board) has indicated that it remains fully operational and has helpfully instituted various forms of relief applicable to security industry participants, the most notable of which are detailed below.
The California Department of Business Oversight (DBO) has also provided relief for industry participants, similar to that afforded by the Texas State Securities Board.
As described above, state regulators are taking steps to provide relief to the security industry and industry participants in light of the current environment, and the NASAA chart provides a helpful tool for quickly evaluating such efforts. Our team at Shearman & Sterling LLP is committed to staying abreast and informed of such developments and would be pleased to answer any questions.
 North American Securities Administrators Association, NASAA Member COVID-19 Regulatory Response Overview (April 16, 2020).
 North American Securities Administrators Association, New Resource Shows Strong State COVID-19 Regulatory Response (April 16, 2020).
 Relatedly, the SEC has issued relief from certain notarization requirements for Form ID, a prerequisite to gaining access to the EDGAR platform where Form D is filed. Currently, those filing Form ID must simply include a line beneath the notary box stating that: “Applicant was unable to obtain notarization due to COVID-19 difficulties.” However, the SEC requires applicants to follow-up within 90 days of obtaining access to EDGAR with notarization of the authorized signature on a copy of the completed Form ID. The notarized version of Form ID must be uploaded to the EDGAR platform.
 E.g., relief from certain notarization requirements.
 See the Regulatory Responses section of our COVID-19 Resource Center.
 See the COVID-19 section of our Financial Regulatory Developments Focus site.
 Form D is used to file a notice of an exempt offering of securities with the SEC within 15 days after the first sale of securities in the offering. Form D must be filed by companies that have sold securities without registration under the Securities Act of 1933 (“Securities Act”) in an offering made under Rules 504 or 506 of Regulation D or Section 4(a)(5) of the Securities Act.
 Office of the Attorney General, Notice of Coronavirus Conditional Relief and Limited Service Continuity Plan by the Investor Protection Bureau (March 24, 2020).
 Specifically, GBL § 359-e or GBL § 359-eee, GBL §680 et seq., and the regulations promulgated thereunder (13 NYCRR 10, 13 NYCRR11, or 13 NYCRR 200) related to registration including CRD and IARD rules, other than real estate related filings.
 Investment adviser representatives of New York-registered investment advisor firms must file a Form NY-IAQ with the IPB. Investment adviser representatives of SEC-registered investment advisor firms do not need to file the Form NY-IAQ with the IPB.
 Applicable to all filings required to be submitted directly to IPB or the Department of Law: (1) under GBL § 359-e or GBL § 359-eee, 13 NYCRR 10 or 13 NYCRR 11 related to registration, other than real estate related filings, and (2) under GBL §680 et seq. or 13 NYCRR 200.
 New York Department of Law, Memorandum regarding Temporary Submission and Review Policies and Procedures Due to COVID-19 State of Emergency (March 25, 2020).
 Executive Order 202.7, Continuing Temporary Suspension and Modification of Laws Relating to Disaster Emergency.
 Texas State Securities Board, State Securities Board Response to Coronavirus (COVID-19).
 The Form U4 is used by broker-dealers to register associated persons with self-regulatory organizations (SROs) and jurisdictions; the Form U5 is used terminate the registrations of associated persons. The Form BD is used by broker-dealers to register with the Securities and Exchange Commission, SROs, and jurisdictions. The Form BDW is used or to withdraw their registration with such entities.
 Texas State Securities Board, Waiver by the Securities Commissioner: Temporary Office and Work Locations – Filing Relief for Securities Professionals.
 Form ADV is the uniform form used by investment advisers to register with both the SEC and state securities authorities. Form PF is required to be filed by SEC-registered investment advisers (and those required to be SEC-registered) who manage any number of private funds with at least $150 million in private fund assets under management as of the adviser’s most recent fiscal-year end.
 Texas State Securities Board, Waiver by Securities Commissioner: Filing Extension Relief for Investment Advisers.
 For example, Reg A Tier 2 Offerings, Initial/Amendment/Renewal for fully registered securities offerings, Secondary Trading Exemption filings, etc. See Texas State Securities Board, Notification to Certain Securities Filers.
 Press Release, Governor Abbot Temporarily Suspends Certain Statutes to Allow for Appearance Before Notary Public Via Videoconference (April 9, 2020).
 Business, Consumer Services, and Housing Agency, Department of Business Oversight, Guidance to Broker Dealers and Investment Advisers (March 30, 2020).
 Business, Consumer Services, and Housing Agency, Department of Business Oversight, Notice to Securities and Franchise Filers (March 22, 2020).
Special thanks to Caitlin Hutchinson Maddox for her contribution to this publication.