In light of the recent coronavirus outbreak, on March 4, 2020, the U.S. Securities and Exchange Commission (SEC) announced that it issued an Order granting exemptions from specified provisions of the Securities Exchange Act of 1934 (Exchange Act) and certain rules thereunder for companies affected by COVID-19 who are, as a result, facing challenges meeting their obligations under the federal securities laws in a timely manner.

What is the time period covered by the Order?

The Order relates to the filing obligations of publicly-traded companies that are due between March 1, 2020 and April 30, 2020. However, the SEC stated that it "intends to monitor the current situation and may, if necessary, extend the time period during which this relief applies, with any additional conditions the Commission deems appropriate and/or issue other relief."

What filings are eligible for an exemption?

Subject to certain conditions (see below), the Order provides exemptions from:

• Filing Materials with SEC. Any requirement to file or furnish materials with the SEC under Exchange Act Sections 13(a), 13(f), 13(g), 14(a), 14(c), 14(f), 15(d) and Regulations 13A, 13D-G, 14A, 14C and 15D, and Exchange Act Rules 13f-1 and 14f-1. These materials include, among other things, Forms 10-K, 20-F,10-Q, 8-K, and 6-K, Schedules 13F and G, and proxy statements and annual reports. Of note, the exemption does not apply to "those provisions mandating the filing of Schedule 13D or amendments to Schedule 13D."
• Furnishing Materials to Security Holders. The requirements of the Exchange Act and the rules thereunder to furnish proxy and information statements, annual reports, and other soliciting materials to security holders.

What are the conditions for eligibility for an exemption from filing materials with the SEC?

In order for an exemption to apply, all of the following conditions must be satisfied:

• COVID-19. The registrant or any person required to make any filings with respect to such registrant must be unable to meet the filing deadline due to circumstances related to COVID-19.
• Form 8-K/6-K. The registrant must furnish to the SEC a Current Report on Form 8-K (or a Form 6-K) by the later of March 16 or the original filing deadline of the report stating:
  • that it is relying on the Order;
  • a brief description of why it could not make the filing on a timely basis;
  • the estimated date by which the filing is expected to be made;
  • if appropriate and material, a risk factor explaining the impact of COVID-19 on its business; and
  • if the reason that the filing "cannot be filed timely relates to the inability of any person, other than the registrant, to furnish any required opinion, report or certification, the Form 8-K or Form 6-K shall have attached as an exhibit a statement signed by such person stating the specific reasons why such person is unable to furnish the required opinion, report or certification on or before the date such report must be filed."
• Filing Deadline. The filing is made no later than 45 days after the original due date. Of note, the SEC stated that any registrant relying on the order would not be required to file a Form 12b-25 so long as the filing is made within the 45-day extended deadline for the report. However, if a registrant is unable to file the report within such extended deadline, the registrant will be permitted to rely on Rule 12b-25.
• Disclosure in Filing. In the delayed filing itself, the registrant or the person required to make such filing with respect to such registrant must disclose that it is relying on the Order and state why it could not make the filing on a timely basis.

What are the conditions for eligibility for an exemption from furnishing materials to security holders?

In order for an exemption to apply, all of the following conditions must be satisfied:

• Suspended Mail Delivery. The "security holder has a mailing address located in an area where, as a result of COVID-19, the common carrier has suspended delivery service of the type or class customarily used by the registrant or other person making the solicitation[.]"
• Good Faith Efforts. The registrant or other person making a solicitation, as applicable, has made a good faith effort to furnish the soliciting materials or information materials, as applicable, to the security holder in accordance with applicable rules.

What filers are eligible for an exemption?

The exemption relating to filing materials with the SEC is available to registrants subject to the reporting requirements of the Exchange Act and any person required to make any filings with respect to such a registrant. The exemption relating to furnishing materials to security holders is available to registrants subject to the reporting requirements of the Exchange Act and any other persons. In addition, the SEC noted that such relief is available not only to those entities located in the affected areas, but also to U.S. companies with significant operations in the affected areas.

How will reliance on an exemption impact Form S-3 eligibility, well-known seasoned issuer (WKSI) status, Form S-8 eligibility, and the current public information requirement in Rule 144(c)?

• Form S-3 Eligibility/WKSI status. Any company relying on an exemption will remain current and timely in Exchange Act filing requirements so long as: 1) it was current and timely as of the first day of the relief period; and 2) it files any report due during the relief period within 45 days of the filing deadline for the report.
• Form S-8 Eligibility/Rule 144(c). Any company relying on an exemption will remain current in its Exchange Act filing requirements so long as: 1) it was current as of the first day of the relief period; and 2) it files any report due during the relief period within 45 days of the filing deadline for the report.

What to Do Now?

Companies that are or may be impacted by COVID-19 but are able to meet their filing deadlines will not be able to avail themselves of these exemptions. However, those companies located in affected areas or with significant operations in affected areas that are unable to meet a filing deadline between March 1 and April 30, 2020 as a result of COVID-19, whether due to disruptions to transportation, limited access to facilities, staff, and professional advisors, or otherwise, may be able to avail themselves of an exemption from filing so long as they comply with each of the conditions set forth in the SEC's Order and discussed above.

In addition, these companies may also be able to avail themselves of an exemption from furnishing proxy and information statements, annual reports, and other soliciting materials to security holders where the applicable common carrier has suspended service as a result of COVID-19 and they have made a good faith effort to furnish those materials to the security holder. If companies avail themselves of this exemption, then they should ensure that they have sufficient written back-up materials to support the existence of the conditions required for the exemption.

Finally, in providing for these exemptions the SEC also reminded "public companies and other persons who are the subject of this Order to continue to evaluate their obligations to make materially accurate and complete disclosure in accordance with the federal securities laws." As an example, the SEC stated that "where a company has become aware of a risk related to the coronavirus that would be material to its investors, it should refrain from engaging in securities transactions with the public and [should] take steps to prevent directors and officers (and other corporate insiders who are aware of these matters) from initiating such transactions until investors have been appropriately informed about the risk." If companies or other affected persons require additional assistance, they are encouraged to contact SEC staff.