Skip to content
US Securities and Exchange Commission

SEC Will Not Extend Extra Time Granted to File Financial Reports

Thomson Reuters Tax & Accounting  

Thomson Reuters Tax & Accounting  

By Soyoung Ho

The SEC said it will not extend the additional time given to public companies to file various reports, including Form 10-Q quarterly reports and Form 10-K annual reports because it “believes further extension of this relief is unnecessary.”

In March, the commission issued Release No. 34-88465Order Under Section 36 of the Securities Exchange Act of 1934 Modifying Exemptions from the Reporting and Proxy Delivery Requirements for Public Companies, to grant 45 extra days for companies to file certain reports that would otherwise have been due from March 1 to July 1, 2020.

It came as authorities limited people’s gatherings and travel to combat the spread of a novel coronavirus. But since then, states have begun to ease the restrictions.

The commission provided the notice in a June 26 statement that provides a summary of all the previous relief, and what the divisions—CorpFin, Division of Investment Management (IM), and Division of Trading and Markets (TM)—have decided or are thinking about each relief going forward.

The statement—An Update on the Commission’s Targeted Regulatory Relief to Assist Market Participants Affected by COVID-19 and Ensure the Orderly Function of our Markets—is by Chairman Jay Clayton, CorpFin Director William Hinman, IM Director Dalia Blass, and TM Director Brett Redfearn.

“It is clear that the need for certain relief remains, such as relief to ensure continued remote operations and to provide flexibility in light of continued market volatility,” SEC officials said. “Other forms of current relief, however, are unlikely to be extended…. As market participants have worked to implement business continuity plans and adjusted in many cases to a more remote and distributed workforce, the present need for extensions of certain regulatory deadlines has diminished.”

Update on Some Other Reliefs

CorpFin and IM issued a statement that companies can change the dates and locations of their shareholder meetings, switch to virtual or hybrid meetings, and furnish proxy materials through the “notice-only” electronic delivery option. The staff said companies should let shareholders present their proposals without having to attend the meeting in person such as by telephone.

“These positions continue in effect, although the staff expects that the number of companies availing themselves of the relief will decrease as the bulk of annual shareholder meetings typically are held in the first half of the calendar year,” the statement said.

CorpFin is monitoring to determine whether to extend temporary relief provided to expedite fundraising under Regulation Crowdfunding. It applies to offerings under the regulation initiated between May 4 and August 31. The division will recommend to commissioners whether to extend the relief before the end of August.

Most of the other relief will not be extended, according to the statement.

Extension of Relief for Transfer Agents

Separately, the SEC on June 26 extended relief provided to transfer agents that expires on June 30. Transfer agents keep track of public company shareholders and process stock trades. They were granted relief on certain recordkeeping, reporting, and processing time obligations.

“The time period for the Exemptions specified in the Order is hereby extended to the date to be specified in a public notice from Commission staff specifying the date on which the Exemptions will terminate,” stated Release No. 34-89170Order under Section 17A and Section 36 of the Securities Exchange Act of 1934 Extending Temporary Exemptions from Specified Provisions of the Exchange Act and Certain Rules Thereunder. “Such date shall be at least two weeks from the date of the Commission staff public notice.”

 

This article originally appeared in the June 30, 2020 edition of Accounting & Compliance Alert, available on Checkpoint.

Subscribe to our Checkpoint Daily Newsstand email to get all the latest tax, accounting, and audit news delivered to your inbox each weekday. It’s free!

More answers