Compliance

SEC Provides Its Own Relief for Hurricane Victims

Joining a number of other regulatory agencies, the SEC has issued important easements and compliance relief provisions for companies and individuals impacted by three recent hurricanes striking the U.S. and its territories.

By John Manganaro editors@strategic-i.com | September 29, 2017

The Securities and Exchange Commission (SEC) announced that it is providing regulatory relief to publicly traded companies, investment companies, accountants, transfer agents, advisers and others affected by Hurricane Harvey, Hurricane Irma, and Hurricane Maria.  

As the SEC explains, the loss of property, power, transportation, and mail delivery due to the hurricanes poses challenges for some individuals and entities that are required to provide information to the SEC and shareholders. To address compliance issues of this nature, the commission issued an order that “conditionally exempts affected persons from certain requirements of the federal securities laws for periods following the weather events.” 

The SEC also adopted interim final temporary rules that extend the filing deadlines for specified reports and forms that companies must file pursuant to Regulation Crowdfunding and Regulation A.

The relief and rule easements are structured for a broad class of companies and others affected by the hurricanes and their respective aftermaths. Some companies and other affected persons may require additional or different assistance in their efforts to comply with the requirements of the federal securities laws. The commission staff will address these and any disclosure-related issues on a case-by-case basis in light of their fact-specific nature.

There is a significant amount of relief described in the SEC’s orders, relating both to conduct required of registered investment advisers as well as actions prescribed for public companies and other stakeholders. Perhaps most important for the readership of PLANADVISER, with this relief, a registered investment adviser will be considered to have satisfied Form ADV filing requirements under Section 204(a) of the Advisers Act and Rule 204-1 thereunder, if the following conditions are met: “The registrant’s Form ADV filing deadline falls within the period from Aug. 25, 2017 to Oct. 6, 2017; the registrant was or is not able to meet its filing deadline due to Hurricane Harvey; and the registrant makes the required Form ADV filing by Oct. 10, 2017.” The same language is used to provide relief or Hurricanes Irma and Maria.

The SEC further explains: “During the period from Aug. 25, 2017 to Nov. 1, 2017, a registered investment adviser will be considered to have satisfied the requirements of Section 204 of the Advisers Act and Rule 204-3(b) thereunder to deliver the written disclosure statements required thereunder to its advisory client, provided that:  (1) the client’s mailing address for delivery, as listed in the records of the investment adviser, has a ZIP code for which the common carrier has suspended mail service, as a result of Hurricane Harvey, Hurricane Irma, or Hurricane Maria, of the type or class customarily used by the adviser to deliver written disclosure statements; and (2) the investment adviser or other person promptly delivers the written disclosure statement either (a) if requested by the client, or (b) at the earlier of (i) Nov. 2, 2017 or (ii) the resumption of the applicable mail service.”