SBIA Update on Coronavirus: SEC Issues Two Orders to Provide Relief for Registered Funds and Investment Advisers Affected by COVID-19

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SEC Issues Two Orders to Provide Relief for Registered Funds and Investment Advisers Affected by COVID-19

On March 13, the Securities and Exchange Commission (SEC) issued two separate orders that provide relief for registered funds and investment advisers that have been affected by the COVID-19 outbreak. The orders encompass rules related to in-person board meetings for registered funds as well as several filing and delivery requirements for certain investment funds and investment advisers. The SEC’s goal is to “enable funds and advisers to meet…obligations and to continue their operations, while recognizing that there may be temporary disruptions outside their control.”

An outline of each order is provided below.

 

Order for Relief Related to the Investment Company Act

The Investment Company Act order includes relief for registered management investment companies, closed-end investment companies, business development companies (BDCs), and unit investment trusts. The order would:

  • Allow registered management investment companies, BDCs, and any investment adviser or principal underwriter of such companies to conduct virtual board meetings provided that, amongst other conditions, directors participate in a means of communications that allows them to hear each other simultaneously during the meeting. (Relief expires June 15, 2020);
  • Exempt registered investment companies and unit investment trusts whose operations are affected by COVID-19 from Form N-CEN and Form N-PORT filing deadlines, provided that they promptly notify the SEC they are unable to meet current filing deadlines and file the Form N-CEN or Form N-PORT no later than 45 days after the original due date. (Relief expires April 30, 2020);
  • Exempt registered investment companies and unit investment trusts whose operations are affected by COVID-19 from annual and semi-annual report transmittal deadlines, provided that they promptly notify the SEC they are unable to meet current filing deadlines and file either report no later than 45 days after the original due date. (Relief expires April 30, 2020); and
  • Exempt registered closed-end investment companies and BDCs from the requirement to file Form N-23C-2 at least 30 days before calling or redeeming securities, provided that they promptly notify the SEC they are unable to meet the deadline, and ensure that filing the notice on an abbreviated time frame is permitted under relevant state law and company governing documents. (Relief expires June 15, 2020)

 

Order for Relief Related to the Investment Advisers Act of 1940

The Investment Advisers Act order includes a number of relief provisions for registered investment advisers (RIAs), including:

  • Providing an exemption for RIAs from current Form ADV amendment filing deadlines, provided that an RIA promptly notify the SEC they are unable to meet a deadline, and file the Form ADV amendments no later than 45 days after the original due date (Relief expires April 30, 2020);
  • An exemption for RIAs from obligations to deliver amended brochures, brochure supplements or summary of material changes to clients if such disclosures are not able to be delivered in a timely fashion due to circumstances related to COVID-19. RIAs would be required to deliver such material within 45 days of the original due date (Relief expires April 30, 2020); and
  • An exemption for private fund advisers from Form PF filing deadlines, so long as the private fund adviser files a Form PF within 45 days of the original due date (Relief expires April 30, 2020).

Given the ongoing uncertainty regarding COVID-19, it is possible that the SEC could extend these deadlines or issue relief in other areas.

 

More information from the SEC may be found here>

 


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