April 3, 2020

Stroock Special Bulletin

By: Eric Requenez

In response to the outbreak of coronavirus disease 2019 (“COVID-19”) and subsequent operational disruptions throughout the world, the Securities and Exchange Commission (the “SEC”) issued guidance and conditional regulatory relief for fund managers, registered investment companies and their respective boards. As outlined in a Stroock Alert on March 17, 2020, “SEC Issues Regulatory Relief for Advisers and Registered Funds Amid Coronavirus Pandemic,” the SEC issued two orders under the Investment Company Act of 1940 (the “’40 Act Order”)[1] and the Investment Advisers Act of 1940 (the “Advisers Act Order”[2] and, together with the ’40 Act Order, the “Original Orders”) that provided conditional relief to fund managers and registered investment companies that are confronting COVID-19-related disruptions in connection with certain filing and delivery requirements.[3] On March 25, 2020, the SEC issued two new orders (the “New Orders”) that supersede and extend the filing and delivery periods outlined in the Original Orders.[4]

Form ADV and Form PF Filings[5]

• The SEC extended the exemption for registered investment advisers and exempt reporting advisers (each, an “Adviser”) from the timeliness requirements of Form ADV and Form PF filings and the Form ADV Part 2 client delivery obligations. The relief applies when the original due date of such filing is on or after March 13, 2020, but on or prior to June 30, 2020.
• Advisers relying on the New Orders are no longer required to provide the SEC with (i) a description of the reasons why they could not meet the filing deadline or delivery requirements on a timely basis or (ii) an estimated date by which it expects to complete such filing or delivery.

Relief Applicable to Registered Investment Companies, Business Development Companies and their Advisers[6]

In-Person Meetings:

• The SEC extended the exemption that allows boards of registered investment companies and any investment adviser of, or principal underwriter for, such registered investment companies to meet virtually and avoid in-person meetings until August 15, 2020.

Certain SEC Filings:

• The SEC has extended relief from Forms N-CEN and N-PORT filing obligations until June 30, 2020, and from Form N-23C-2 filing obligations until August 15, 2020.
• Advisers relying on the New Orders are no longer required to provide the SEC with (i) a description of the reasons why they could not meet the filing deadline or delivery requirements on a timely basis or (ii) an estimated date by which it expects to complete such filing or delivery.

Delivery of Prospectuses and Shareholder Reports:

• The SEC has extended relief from delivery of certain shareholder reports and fund filings until June 30, 2020.

• Advisers relying on the New Orders are no longer required to provide the SEC with (i) a description of the reasons why they could not meet the filing deadline or delivery requirements on a timely basis or (ii) an estimated date by which it expects to complete such filing or delivery.

The SEC’s release also covers other public company filings and can be found here.

At Stroock, we have established a multidisciplinary task force focused on coronavirus-related legal issues. Our aim is to provide holistic and proactive business guidance.

Please do not hesitate to contact us with any questions or concerns you may have during this period and for assistance with the requirements or the conditions for relying on the relief granted by the SEC’s recently issued orders, including assistance drafting any of the emails referenced in the New Orders.

______________________________

For More Information

Eric Requenez

Abdulmajeed F. Alhogbani

[1] Release No. IC-33817 (Mar. 13, 2020), https://www.sec.gov/rules/other/2020/ic-33817.pdf.

[2] Release No. IA-5463 (Mar. 13, 2020), https://www.sec.gov/rules/other/2020/ia-5463.pdf.

[3] Press Release 2020-63, SEC Takes Targeted Action to Assist Funds and Advisers, Permits Virtual Board Meetings and Provides Conditional Relief from Certain Filing Procedures (Mar. 13, 2020), https://www.sec.gov/news/press-release/2020-63.

[4] Press Release 2020-73, SEC Extends Conditional Exemptions From Reporting and Proxy Delivery Requirements for Public Companies, Funds, and Investment Advisers Affected By Coronavirus Disease 2019 (COVID-19) (Mar. 25, 2020), https://www.sec.gov/news/press-release/2020-63.

[5] Release No. IA-5469 (Mar. 25, 2020), https://www.sec.gov/rules/other/2020/ia-5469.pdf.

[6] Release No. IC-33824 (Mar. 25, 2020), https://www.sec.gov/rules/other/2020/ic-33824.pdf.

This Stroock publication offers general information and should not be taken or used as legal advice for specific situations, which depend on the evaluation of precise factual circumstances. Please note that Stroock does not undertake to update its publications after their publication date to reflect subsequent developments. This Stroock publication may contain attorney advertising. Prior results do not guarantee a similar outcome.

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