March 27, 2020

Summary of Regulatory Reliefs

By Sara Carlson, Partner, Assurance Services & Qiqi Wei, Partner, Assurance Services

Summary of Regulatory Reliefs SEC Services

The impacts of the current COVID-19 crisis are presenting challenges for many companies throughout the nation. To address these challenges, many regulators have issued orders, releases and statements which allow, subject to certain conditions, companies to take advantage of any applicable relief. Companies need to make sure they meet all applicable criteria and comply with the requirements outlined below, as in many cases, extensions are not automatic. The following is a list of regulatory reliefs as of April 2, 2020. Please check back regularly, as regulators are making announcements frequently.

SEC

  1. Conditional Regulatory Relief for Registered Transfer Agents and Certain Other Persons Affected by the Coronavirus Disease 2019 (COVID-19) – extensions through May 30, 2020. Learn More
  2. CorpFin has also issued guidance (see link below) providing the staff’s current view regarding disclosure obligations that registrant’s should consider. The guidance encourages timely reporting while recognizing that it may be difficult to assess or predict with precision the broad effects of COVID-19 on industries or individual companies. Learn More
  3. Conditional regulatory relief has been added for Regulation A and Regulation Crowdfunding issuers. The rules provide, subject to certain conditions, affected companies with an additional 45 days to file certain disclosure reports that would otherwise have been due between March 26, 2020 and May 31, 2020. Learn More
  4. Conditional Regulatory Relief and Assistance for Companies Affected by the Coronavirus Disease 2019 (COVID-19) provides publicly traded companies with an additional 45 days to file certain disclosure reports that would otherwise have been due between March 1 and July 1, 2020. Utilizing the relief requires a registrant to file an 8-K or 6-K with specified information required. Learn More

Investment Adviser

  1. Relief Related to the Investment Advisers Act of 1940
    https://www.sec.gov/rules/other/2020/ia-5469.pdf
    https://www.sec.gov/rules/other/2020/ia-5463.pdf:
    1. The Order would extend the following obligations for which the original due date is on or after the date of the original order but on or prior to June 30, 2020. The original order extended to April 30, 2020. Filing or delivery, as applicable, would still need to be made as soon as practicable but no later than 45 days after the original due date.
      https://www.sec.gov/news/press-release/2020-73
      1. Registered investment advisers and exempt reporting advisers affected by Coronavirus to file an amendment to Form ADV or file reports on Form ADV Part 1A, respectively;
      2. Registered investment advisers affected by Coronavirus from requirements to deliver amended brochures, brochure supplements or summary of material changes to clients where the disclosures are not able to be timely delivered because of circumstances related to Coronavirus; and
      3. Private fund advisers affected by Coronavirus from Form PF filing requirements.
    2. New FAQ Question IV.7 added to the Staff Responses to Questions About the Custody Rule. This discusses that the Division would not recommend enforcement action for a violation of rule 206(4)-2 against an adviser that reasonably believed that its independent public accountant would complete its examination and submit Form ADV-E to file its certificate of accounting by the 120-day deadline, but failed to do so due to the logistical disruptions described in the FAQ, as long as the independent public accountant files such report as soon as practicable, but not later than 45 days after the original due date. (Posted March 30, 2020)
      https://www.sec.gov/divisions/investment/custody_faq_030510.htm
    3. For advisers to pooled investment vehicles, the Staff is referencing Investment Advisors to FAQ Question VI.9 of the Staff Responses to Questions About the Custody Rule with regards to 120-day deadline of distributing their pooled vehicle financial statements. The FAQ states the Division would not recommend enforcement action for a violation of rule 206(4)-2 against an adviser that is relying on rule 206(4)-2(b)(4) and that reasonably believed that the pool’s audited financial statements would be distributed within the 120-day deadline, but failed to have them distributed in time under certain unforeseeable circumstances. (Modified March 5, 2010.)
      https://www.sec.gov/divisions/investment/custody_faq_030510.htm

FDIC

  1. The Federal financial institution regulatory agencies and the state banking regulators issued an interagency statement encouraging financial institutions to work constructively with borrowers affected by COVID-19 and providing additional information regarding loan modifications. The agencies encourage financial institutions to work with borrowers, will not criticize institutions for doing so in a safe and sound manner, and will not direct supervised institutions to automatically categorize loan modifications as troubled debt restructurings (TDRs). Learn More

Single Audit Reporting

  1. Delay the completion and submission of the Single Audit reporting package, as required under Subpart F of 2 CFR § 200.501Audit Requirements, to six (6) months beyond the normal due date. No further action by awarding agencies is required to enact this extension. Learn More

FINRA

  1. Any member that (1) meets the exemptive provisions in SEA Rule 15c3-3(k) or (2) files a Part IIA FOCUS Report is being provided a 30 calendar day extension for submitting to FINRA its annual report related to fiscal years ending in January 2020 through March 2020. Learn More
  2. Any member that (1) meets the exemptive provisions in SEA Rule 15c3-3(k) or (2) files a Part IIA FOCUS Report is being provided a 10 business day extension for submitting any FOCUS report to FINRA related to a period ending in February 2020 through April 2020.

Freddie Mac/Fannie Mae

  1. Fannie Mae and Freddie Mac extended their annual financial filing deadlines by 30 days. Further, one practitioner shared with us that NMLS has elected NOT to grant any extensions. Learn More (Freddiemac.com) | Learn More (Fanniemae.com)

HUD

  1. HUD announced a blanket 30-day extension for the filing of all REAC financial statements. That extension is automatic and does not require any action by the project. However, REAC has clarified that the extension DOES NOT EXTEND THE 60-day RESIDUAL RECEIPTS deposit requirement. Learn More

CFTC

  1. Form CPO-PQR. The due date for Form CPO-PQR filings has been extended such that small and mid-sized CPOs (i.e., CPOs with assets under management of less than $1.5 billion) have until May 15, 2020, to file reports for 2019, and large CPOs (i.e., CPOs with assets under management equal to or greater than $1.5 billion) have until July 15, 2020, to file reports for the first quarter of 2020. Learn More
  2. Annual Reports. A CPO with a pool annual report previously due on or before April 30, 2020, now has an additional 45 days to file such report with the National Futures Association and distribute such report to pool participants. This relief does not prevent a CPO from requesting an additional extension of time not to exceed a total of 180 days from the end of the pool’s fiscal year consistent with CFTC regulation 4.22(f).
  3. Account Statements. Pool periodic account statements, which, for a CPO relying on CFTC regulation 4.7, are due within 30 days after the end of each quarter, are not required to be provided until 45 days of the end of the reporting period for all reporting periods ending on or before April 30, 2020.

Canada

  1. The Canadian Securities Administrators (CSA) provides a 45-day extension for periodic filings normally required to be made by issuers, investment funds, registrants, certain regulated entities and designated rating organizations on or before June 1, 2020. Learn More

If you have any questions, do not hesitate to contact your Marcum audit professional or contact Sara Carlson at 312.632.5030 or email Sara.

Coronavirus Resource Center

Have more questions about the impact of the coronavirus on your business? Visit Marcum’s Coronavirus Resource Center for up-to-date information.

Related Industry

SEC