SEC and COVID-19: Relief for Investment Advisers
March 26, 2020
On March 25, 2020, the Securities and Exchange Commission (“SEC”) superseded the original relief of March 13, 2020 it had provided to certain registered investment advisers and exempt reporting advisers that met the conditions of the relief regarding their obligations with respect to Form ADV and Form PF. The original relief provided that the due date with respect to filing and delivery obligations due between March 13, 2020 and April 30, 2020 was extended for 45 days after the original due date. As of March 25, the 45-day extension applies to filing and delivery obligations due between March 13, 2020 and June 30, 2020.
Absent the relief, registered investment advisers and exempt reporting advisers with a fiscal year end of December 31, 2020 are required to fulfill the annual updating requirement with respect to Form ADV and deliver the Part 2 amended brochures (or summary of material changes) as of March 30, 2020. Additionally, certain registered investment advisers must file Form PF as of April 30, 2020.
While the original relief required investment advisers to tell the SEC why they were relying on the relief and when they expected to file the required materials, the conditions of the revised relief remove those requirements and are set forth below:
- The registered investment adviser or exempt reporting adviser is unable to meet the applicable filing deadline or delivery requirement due to current or potential effects of COVID-19.
- With respect to Form ADV filing and delivery requirements, the investment adviser must promptly notify the SEC by email at IARDLive@sec.gov and disclose on the investment adviser’s website (or if it does not maintain a website, provides prompt notice to its clients and investors) that it is relying on the SEC relief.
- With respect to Form PF filing requirements, the investment adviser must promptly notify the SEC by email at FormPF@sec.govthat it is relying on the relief.
- The investment adviser files Form ADV or Form PF, as applicable, and delivers the brochure (or statement of material changes) within 45 days after the original due date.
Additionally, the SEC provided guidance in its Form ADV frequently asked questions (“FAQs”) that the addresses of employees who are teleworking due to COVID-19 do not have to be disclosed on Form ADV as additional offices, provided that the temporary teleworking arrangements are part of the investment adviser’s business continuity plan due to circumstances related to COVID-19.
The SEC continues to monitor the COVID-19 situation as it affects investments and indicated that the time period for the foregoing relief may be extended, as may be appropriate. We will continue to monitor these developments.
Both registered investment advisers and exempt reporting advisers are expected to have cybersecurity and business continuity plans to effectively service their clients during times of disruption, such as the COVID-19 pandemic that we are currently experiencing. This may be a good time to re-visit those procedures and make corrections. Please let us know if we can help.
The contents of this Alert are for informational purposes only and do not constitute legal advice. If you have any questions about this Alert, please contact the Shulman Rogers attorney with whom you regularly work or a member of the Shulman Rogers Business and Financial Services Department.