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COVID-19 Update—“Essential” Investment Company/Advisory Functions in the Wake of Shelter in Place Orders

In an effort to contain the spread of COVID-19, several state and local governments (and more are soon to follow) have taken the unprecedented action of issuing “stay at home” or “shelter in place” orders that mandate the closure of “non-essential” or “not critical” businesses for varying periods of time. In the wake of these orders, investment company and adviser personnel will need to identify which, if any, of their business operations cannot be properly continued by personnel working from home and then determine whether such operations are “essential” or “critical” to the well-being of the public such that they can continue to be performed on-site.

As a threshold question, decision makers should identify which aspects of their operations, if any, require on-site functionality, including physical processing and support of mail and other systems. In determining whether any such operations are exempt under the orders, and therefore may continue unabated, decision makers should review the specific requirements of all applicable orders (especially where city, county or other local orders overlap or depart with statewide or federal orders) and thoughtfully consider the role such operations play in the country’s critical capital, liquidity and other financial markets including, but not limited to, maintaining (i) essential investor services at a time when financial markets may be experiencing significant volatility and uncertainty, (ii) critical information technology and data security to defend against cyberattacks, to support financial indexes or other benchmarks and to process trades or other transactions and (iii) the integrity and privacy of proprietary data, systems and investor information.

For assistance with navigating these orders, establishing appropriate protocols and procedures, and making “essential” or “critical” business function determinations, investment company and adviser personnel are encouraged to consult with their counsel and other advisors. In some situations, an exemptive order or other governmental assurance may be sought to ensure continued operations will not violate such orders.

© 2020 Vedder Price


About this Author

Adam Goldman Investment Attorney Vedder Price

Adam S. Goldman is an Associate in the Chicago office of Vedder Price and a member of the firm’s Investment Services practice group.

Prior to joining Vedder Price, Mr. Goldman practiced at a boutique financial services firm, representing broker-dealers, investment advisers, commodity pool operators, private equity funds, and other investment services clients in transactional, litigation, and compliance matters. Mr. Goldman also counseled public companies on required filings under the 1933 and 1934 Acts and other regulatory issues.

While in law school, Mr. Goldman competed in...

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Joseph Mannon, Investment Lawyer, Vedder Price Law Firm

Joseph M. Mannon is a member of Vedder Price P.C.’s Investment Services group.

Mr. Mannon focuses his practice on legal and compliance matters for investment advisers, mutual funds, closed-end funds and unregistered vehicles such as hedge funds, hedge fund of funds and other investment entities.  With regard to unregistered vehicles, he frequently counsels clients on fund formation and structuring matters for funds organized both in the United States and abroad.  He also counsels clients on issues relating to commodity trading advisers and commodity pool operators.  

Cody J. Vitello, Vedder Price Law Firm, Investment Attorney

Cody J. Vitello is an Associate in the firm’s Financial Institutions group.

Prior to joining Vedder Price, Mr. Vitello worked at the Federal Deposit Insurance Corporation, where he researched and analyzed federal and state bank statutes, regulations and opinions and drafted memoranda, letters and guidelines to be used by in-house staff and outside bank officials. Mr. Vitello also gained general corporate and financial regulation experience while he was an extern at the Commodity Futures Trading Commission and as a student-attorney at the Loyola University Chicago...

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