The SEC has issued new rules relating to the reporting requirements of investment advisers, funds, and public companies, extending deadlines and providing exemptions aimed at offering relief to the investment industry from the effects of the novel coronavirus.
The agency cited material risks and negative impacts for financial entities posed by the pandemic, whether those entities are aware of them or not.
“The division is monitoring how companies are reporting the effects and risks of COVID-19 on their businesses, financial condition, and results of operations, and is providing this guidance as companies prepare disclosure documents during this uncertain time,” the agency said in a statement.
Among the measures provided are a 45-day extension for public companies to file “certain disclosure reports” that would have been due by March 1 and July 1 following a normal, unaffected schedule. If a company wishes to extend the timeframe, it is required to explain why the relief is needed and how the pandemic is impacting its business operations.
Investment funds and advisers are permitted additional time to take care of their in-person board meetings and filing certain disclosures by predetermined dates. To provide more tailored guidance to public companies in relation to the assistance they might need in the future, the agency also is soliciting comments from public companies pertinent to the pandemic’s effects on their work.
Additionally, the SEC is aiming to provide additional measures to market participants across the board by not requiring notarization to make filings on the EDGAR system until July 1, subject to certain conditions.
Investors are being impacted in different ways by COVID-19. For example, New Jersey’s treasury department froze about $1 billion in spending due to the potential of the pandemic lowering its valuation, and Bridgewater’s flagship fund tumbled about 20% from the virus’ influence.
The municipal bond market is taking a beating and fell 11% in the 11-day period ending March 20. The San Francisco Employees’ Retirement Association called for the industry to gather its resources and unite to combat the effects of the virus. Meanwhile, New York’s state pension fund stated it believes it will fail to meet its 6.8% fiscal year target because of the pandemic.