SEC Provides Additional COVID-19 Relief

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Foley Hoag LLP - IPO, Then What?

On March 26, 2020, the SEC announced that it is providing additional temporary relief to market participants in light of the COVID-19 pandemic. The relief covers (i) parties needing to file a Form ID to gain access to the EDGAR system and (ii) certain company filing obligations under Regulation A and Regulation Crowdfunding.

Temporary Relief from Form ID Notarization Requirement

To use the SEC’s EDGAR system to make required filings, applicants must complete an online application and submit a notarized document that includes the Form ID and confirms its authenticity. In light of the COVID-19 pandemic, the SEC recognized that many applicants have been unable to secure the required notarization. Accordingly, the SEC adopted a temporary final rule that provides relief from the notarization requirement from March 26, 2020 through July 1, 2020, subject to certain conditions. An applicant relying on this temporary rule must indicate on its manually signed Form ID that it could not provide the required notarization due to circumstances relating to COVID-19 and submit a PDF of the notarized manually signed document within 90 days of obtaining EDGAR codes.

Compliance with Regulation A and Regulation Crowdfunding

In light of COVID-19, the SEC also adopted temporary final rules to extend the filing deadlines for specified reports and forms that companies must file pursuant to Regulation A and Regulation Crowdfunding. The temporary rules provide, subject to certain conditions, affected companies with an additional 45 days to file certain reports or forms that would otherwise have been due between March 26, 2020 and May 31, 2020. A company relying on the temporary final rules must satisfy the following conditions:

  • The company cannot meet a filing deadline due to COVID-19;
  • The company promptly discloses that it is relying on the temporary final rules on its public website or, for Regulation Crowdfunding companies, through an intermediary’s platform, or by providing direct notification to its investors;
  • The company files the required report or form with the SEC no later than 45 days after its original filing deadline; and
  • The company discloses in the required report or form that it is relying on the temporary final rules and indicates why it could not file such report or form on a timely basis.

Regulation A Covered Filings

With respect to Regulation A, the covered reports and forms are:

  • post-qualification amendments required to include updated financial statements;
  • annual reports on Form 1-K;
  • semi-annual reports on Form 1-SA;
  • special financial reports on Forms 1-K or 1-SA;
  • current reports on Form 1-U; and
  • exit reports on Form 1-Z.

Regulation Crowdfunding Covered Filings

For Regulation Crowdfunding, the relief applies to:

  • annual reports on Form C-AR;
  • progress updates on Form C-U; and
  • termination of reporting on Form C-TR.

The relief does not apply to a Form 1-A that has not been qualified under Regulation A or to a Form C or Form C/A under Regulation Crowdfunding.

The temporary final rule regarding relief from the notarization requirements for Form ID will be effective from the date of public inspection by the Federal Register through September 30, 2020 and the temporary final rules regarding Regulation A and Regulation Crowdfunding relief will be effective from the date of public inspection by the Federal Register through July 15, 2020.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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