On March 25th, the SEC’s Division of Corporation Finance released Guidance Topic No, 9, which focuses on guidance for disclosure given the impacts of the ongoing coronavirus pandemic. This guidance provides the Division of Corporation Finance’s current views regarding disclosure and other securities law obligations that companies should consider in light of business and market disruptions. The Division of Corporation Finance reminds readers that this guidance is not a rule, regulation, or statement of the SEC. Like all staff guidance, the advice has no legal force or effect. It does not alter or amend applicable law, and it creates no new or additional obligations for any person.
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The SEC and its staff recognize that the COVID-19 public health crisis has presented challenges for some entities and individuals who require initial access to file through the EDGAR system, particularly those applicants who have experienced trouble obtaining notarization of the authorized signature on the Form ID application. This notarization process is required by Rule 10(b) of Regulation S-T.
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On March 26th, the SEC announced it will provide additional temporary regulatory relief to market participants due to the impacts of Coronavirus Disease (COVID-19). These actions involve 1) parties needing to gain access to make filings on the EDGAR system, 2) certain company filing obligations under Regulation A and Regulation Crowdfunding, and 3) a filing requirement for municipal advisers.
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The SEC announced on March 25th that it is extending the filing periods covered by its previously enacted conditional reporting relief for certain public company filing obligations under the federal securities laws. It is also extending regulatory relief that was previously provided to funds and investment advisers whose operations may be affected by COVID-19. In addition, the SEC’s Division of Corporation Finance has now issued its views regarding disclosure obligations and other securities law matters as the impact of COVID-19 increases. Continue reading "SEC Extends Conditional Exemptions From..." »

The SEC released an announcement concerning Form ID and difficulties with form notorization given the recent coronavirus pandemic and its impact on business. The SEC understands that the COVID-19 public health crisis is presenting challenges for some entities and individuals who are seeking initial access to file submissions through the EDGAR system. In particular, users are encountering trouble in meeting the notary requirement in the Form ID access application process. This problem with notary access is also affecting other EDGAR access processes that require notarization.
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On March 23rd, the SEC announced temporary flexibility for registered funds affected by recent market events. New exemptions will provide additional flexibility for registered open-end management investment companies other than money market funds (“open-end funds”) and insurance company separate accounts registered as unit investment trusts (“separate accounts”) to obtain short-term funding. The flexibility detailed in this order will permit these funds to borrow funds from certain affiliates and to enter into certain other lending arrangements. The relief is designed to provide funds with additional tools to manage their portfolios for the benefit of all shareholders as investors possibly seek to rebalance their investments in light of market turmoil.
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The SEC released for immediate effectiveness a proposed rule filing submitted by New York Stock Exchange LLC (NYSE) to facilitate electronic auctions in light of the NYSE’s decision to temporarily close its New York trading floor. NYSE announced that it will temporarily close its trading floor effective Monday, March 23, as a precautionary measure in response to COVID-19. The NYSE rule filing modifies certain rules to set wider price parameters and to remove volume limits, within which NYSE designated market makers (DMMs) can facilitate auctions in an electronic trading environment.
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The SEC announced on March 22nd that it is providing further regulatory relief due to the effects of COVID-19, in this case for registered transfer agents and certain other persons with regulatory obligations under the federal securities laws. The impacts of COVID-19 may directly or indirectly present challenges for transfer agents and other persons. To address these challenges, the SEC issued an order that provides registered transfer agents and certain other persons with exemptive relief for certain regulatory obligations under the federal securities laws subject to certain conditions. This relief is applicable through May 30, 2020. Importantly, at all times transfer agents are subject to the requirements of Exchange Act Rule 17Ad-12. This rule requires transfer agents to ensure that they adequately safeguard securities and funds in their possession or custody, and the mandate is unaltered by the current situation.
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To aid our clients in their efforts to transition to telecommuting and remote work, we are offering a webinar on Tuesday, March 24 from 11:00am to 12:00pm EDT that will cover the different methods of deploying GoFiler remotely.

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With the emergence and spread of COVID-19 in the United States and, in particular, within New York State, Novaworks has been planning and preparing to ensure that this event causes minimal disruption to the services and software we provide for our clients. In that vein and in the interest of transparency, we would like to share some information about how we are currently addressing this situation and what steps your organization can take to ensure you are also prepared.

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On March 14th, the SEC released a proposed rule filing submitted by Cboe Exchange, Inc. to facilitate the continued operation of the options exchange in light of Cboe’s decision to temporarily suspend open outcry trading on its Chicago trading floor. This SEC action has immediate effectiveness.
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On March 13th, the SEC announced regulatory relief for funds and investment advisers whose operations may be affected by the coronavirus. This relief information covers in-person board meetings and certain filing and delivery requirements for particular investment funds and investment advisers. The effects of the coronavirus may delay or prevent funds and advisers who operate in affected areas from complying with some regulatory obligations due to restrictions on large gatherings, travel and access to facilities, the potential limited availability of personnel. The SEC’s relief is intended to allow funds and advisers to meet those obligations and to continue their operations, given that there may be temporary disruptions outside of their control.
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On March 2nd, the SEC amended financial disclosure requirements applicable to debt offerings that include credit enhancements, such as subsidiary guarantees. The changes are intended to both improve the quality of disclosure and increase the likelihood that issuers will conduct debt offerings on a registered basis.
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The SEC announced on March 13th that its staff has published guidance to assist public companies, investment companies, shareholders, and other market participants affected by COVID-19 with their upcoming annual shareholder meetings. This guidance is designed to facilitate the ability of companies to hold these important meetings and engage with shareholders while complying with the federal securities laws and maintaining social distancing. Many public companies and investment companies are mandated to hold annual meetings of security holders, and federal securities laws require the delivery of proxy materials to the voting shareholders. COVID-19 and its continuing spread has impacted the ability to hold these in-person meetings due to health, transportation, and other logistical issues.
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On March 11th, the SEC adopted a new rule and related form changes and other amendments to simplify and streamline disclosures for investors about variable life insurance contracts. These changes permit the use of a concise prospectus designed to improve readers’ understanding of the contracts’ features, fees, and risks. The new framework makes use of layered disclosure and technology, in particular Inline XBRL, to provide investors with ways to access information more easily and make informed investment decisions. The new amendments represent an important milestone in the SEC’s efforts to improve investors’ experience as they study material information. Continue reading "SEC Adopts Investor Disclosure Improvements for..." »