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SEC Answers COVID-19 Questions with New FAQs
Blog
May 8, 2020
On May 4, 2020, the staff of the SEC’s Division of Corporation Finance (the Staff) issued four COVID-19 related FAQs in response to inquiries about Release No. 34-88465 (March 25, 2020), which grants filing deadline relief for Exchange Act Reports if the company (or registrant) makes certain prescribed disclosures on Form 8-K (the COVID-19 Relief Order). The Staff noted that these responses were not published as standard Compliance and Disclosure Interpretations because the responses relate to “unique circumstances arising from COVID-19.”
COVID-19 Relief Order FAQ
| Question | Answer | |
| What disclosure is required under the COVID-19 Order to extend the filing deadline for Exchange Act reports? | To take advantage of an extended filing deadline under the COVID-19 Relief Order, a registrant must disclose on Form 8-K (or Form 6-K, if applicable):
If a registrant cannot file a report on a timely basis because of the inability of a person to furnish a required opinion, report, or certification, the registrant is required to attach an exhibit to its current report with a statement signed by that person stating the specific reasons why he or she is not able to furnish the required materials before the original due date. |
Form S-3 FAQs
| Question | Answer | |
| May a registrant continue to conduct takedowns using an already effective Securities Act registration statement while relying on the COVID-19 Relief Order for a periodic report, including a Form 10-K? |
Yes, if the registrant determines (subject to the guidance summarized below) that the prospectus to be used for the takedown complies with Section 10(a) of the Securities Act of 1933. The Staff noted that the COVID-19 Relief Order does not automatically delay or exempt compliance with the requirements for registration statements. In particular, the Staff noted that Section 10(a)(3) of the Securities Act requires that a prospectus used more than nine months after its effective date by a registrant that is relying on the COVID-19 Relief Order (for delays in filing Exchange Act reports) must not contain information dated more than 16 months after the time of use, unless updated information can’t be furnished without unreasonable effort or expense. In addition, shelf offerings pursuant to Rule 415 may not be conducted if, because of the delayed report, the prospectus included in the registration statement does not contain facts/events that represent a fundamental change in the information included in the registration statement, as required by the undertaking applicable to shelf registration statements. | |
| With respect to an effective Form S-3, when must a registrant reassess its eligibility to remain on the form if it has relied on the COVID-19 Relief Order to delay filing a Form 10-K that will serve as a Section 10(a)(3) update? | When a registrant properly relies on the COVID-19 Relief Order, the due date for filing the Form 10-K is extended and the registrant must reassess its eligibility to use Form S-3 on the date when it files the Form 10-K. In addition, at the time the Form 10-K is filed, it must meet all other requirements of Form S-3, including that it has filed all of the material required to be filed pursuant to Sections 13, 14, or 15(d) for a period of at least 12 calendar months immediately preceding the date of its 10-K filing. | |
| Form 10-K that will serve as a Section 10(a)(3) update? | When a registrant properly relies on the COVID-19 Relief Order, the due date for filing the Form 10-K is extended and the registrant must reassess its eligibility to use Form S-3 on the date when it files the Form 10-K. In addition, at the time the Form 10-K is filed, it must meet all other requirements of Form S-3, including that it has filed all of the material required to be filed pursuant to Sections 13, 14, or 15(d) for a period of at least 12 calendar months immediately preceding the date of its 10-K filing. | |
| Is the registrant relying on the COVID-19 Relief Order to delay a required filing eligible to file a new Form S-3 registration statement between the original due date of a filing and the extended due date? Will the Staff accelerate the effectiveness of registration statements that do not contain all of the required information? |
Between the original due date of a required filing and the due date as extended by the COVID-19 Relief Order, a registrant may file a new Form S-3 registration statement even if the registrant has not filed the required periodic report. The staff will consider the registrant to be current and timely in its Exchange Act reporting if the Form 8-K disclosing reliance on the COVID-19 Relief Order is properly furnished. Staff stated that it will be “unlikely” to accelerate the effective date of a Form S-3 until such time as any information required to be included in the Form S-3 is filed. |
View all of our COVID-19 perspectives here. Contact a member of our COVID-19 Legal Task Force here.
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This entry has been created for information and planning purposes. It is not intended to be, nor should it be substituted for, legal advice, which turns on specific facts.