Among the government agencies that have extended deadlines for filing reports in light of the COVID-19 pandemic is the Securities and Exchange Commission (“SEC”). The SEC has provided public companies with a 45-day extension to file certain disclosure reports that would otherwise have been due between March 1 and July 1, 2020. Claiming the extension is relatively simple – companies must convey through a current report (a Form 8-K) a summary of why the relief is needed in their particular circumstances for each periodic report that is delayed.
The extension was announced in a press released dated March 25, 2020. Also included in that press release were other types of relief afforded to investment advisers and funds.
Perhaps the biggest takeaway from the press release was the SEC’s emphasis on disclosure. A company should evaluate whether it has an affirmative disclosure obligation that would require the company to publicly address the risks and uncertainties arising from COVID-19. If a company chooses to disclose material information regarding the impact of COVID-19, it should “take the necessary steps to avoid selective disclosures and to disseminate such information broadly.” Also, the company may need to consider whether it is necessary to “revisit, refresh, or update previous disclosure to the extent that the information becomes materially inaccurate.”
While directed at public reporting companies, this advice applies to private companies as well. With the executive teams of companies responding to constantly changing conditions in their operating environments, management should consider whether investors, strategic partners, and lenders should be apprised of changes that may affect their relationships so that expectations can be adjusted appropriately. Doing so may facilitate requests for waivers and modifications to agreements down the road and make life easier for all concerned.
For more information on SEC-related matters, please contact Fay Matsukage, Senior Counsel.