SEC provides temporary relief from form ID notarization requirements, extends crowdfunding filing deadlines 

April, 2020 - Marc Adesso, David Clay, Renee Wilson

As discussed on this blog, the Securities and Exchange Commission (SEC) has issued a number of orders providing conditional regulatory relief for certain publicly traded company filing obligations as a result of the challenges created by the spread of the coronavirus (COVID-19).

More specifically, one of the key items of relief was an extension of filing deadlines for public companies’ proxy statements, annual reports and periodic reports, based on an exemption from certain provisions under the Securities Exchange Act of 1934, as amended (Exchange Act), similar to the relief normally granted under Rule 12b-25 of the Exchange Act.

On March 26, the SEC issued a temporary final rule offering additional relief for certain market participants that are directly or indirectly impacted by COVID-19. In particular, the relief granted in the temporary final rule extended filing deadlines for Regulation Crowdfunding and Regulation A issuers, similar to the orders discussed above. As further discussed below, the temporary final rule also alleviated the notarization requirement associated with Form ID.

Interestingly, the relief for Regulation Crowdfunding and Regulation A issuers was provided through a temporary final rule, but all prior relief stemming from COVID-19 issues has been provided through SEC orders, most commonly pursuant to the authority granted under Section 36 of the Exchange Act. It is the only temporary final rule that the SEC has issued in 2020, and only one of five such temporary final rules issued by the SEC in the last three years. In contrast, the SEC issued nine orders in the first quarter of 2020 alone, and a total of 36 orders in the last three years. Orders are issued more commonly in large part because they do not amend SEC rules or regulations, and instead, typically provide for exemptions from or extensions to pre-existing rules. On the other hand, temporary final rules actually amend SEC rules or regulations as soon as they are issued (albeit temporarily), and are therefore generally only issued in extreme circumstances, as they circumvent several steps in the SEC’s typical rulemaking process.

 

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