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SEC Division of Corporation Finance Issues New C&DIs about the SEC’s Conditional Relief Order and Compliance with Rule 12b-25

On March 31, the Securities and Exchange Commission’s (SEC) Division of Corporation Finance (the Division) issued two new Compliance and Disclosure Interpretations (C&DIs) related to compliance with Rule 12b-25 in connection with the SEC’s conditional relief order (the Order) that was issued in the wake of the Coronavirus Disease 2019 (COVID-19). As detailed in the March 27 edition of Corporate & Financial Weekly Digest, the Order gives publicly traded companies an additional 45 days to file certain reports, including most periodic or current reports, that would have been due during the period of March 1-July 1, if the company is unable to meet a filing deadline due to circumstances related to COVID-19. In order to take advantage of the relief, an issuer must, among other things, issue a current report on Form 8-K or Form 6-K, as applicable, with a summary of why the relief is necessary in the particular circumstances.

The new C&DIs address the following issues:

C&DI 135.12 clarifies that, if a company is unable to timely file a report due to COVID-19 without unreasonable effort or expense and is uncertain that it will be able to file the required report within the applicable period under Rule 12b-25, the company should file a current report on Form 8-K or Form 6-K, as applicable, including the required statements under the Order. If the company only files a Form 12b-25 (but does not file a Form 8-K or a Form 6-K pursuant to the Order) by the original due date of the report, the company will not have satisfied the conditions required to rely upon the Order, in which case the 45 day relief provided under the Order will not be available, and the company will only be entitled to the relief provided under Rule 12b-25. Under Rule 12b-25, and assuming compliance with all of the requirements thereunder, if the subject filing is an annual report, semi-annual report or transition report on Form 10-K, 20-F, 11-K, N-CEN, or N-CSR, the report will be considered timely only if it is filed no later than the fifteenth calendar day following the original deadline; or, if the subject filing is a quarterly report or transition report on Form 10-Q, if it is filed no later than the fifth calendar day following the original deadline. The full text of this C&DI is available here.

In C&DI 135.13, the Division explains that the filing of a Form 12b-25 does not change the due date of a periodic report and that a company may only rely upon the Order to extend the filing deadline of the underlying report if the company files a Form 8-K or a Form 6-K, in accordance with the Order, by the original due date of the report. The Division further clarified that, if the company takes the required actions to be able to rely on the Order with respect to a report, the due date of the report will be extended for 45 days after the report’s original filing deadline, and the company would subsequently be able to rely on Rule 12b-25 if it is ultimately unable to file the report on or before the extended filing deadline. The full text of this C&DI is available here.

Both C&DIs encourage registrants, who are unable to rely on the Order, to contact the Staff to discuss the collateral consequences of late filings

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 94


About this Author

Mark Reyes Securities Lawyer Katten Muchin law firm Chicago office

Mark J. Reyes concentrates his practice in corporate and securities matters, including representing issuers and investors in public offerings and private placements of equity and debt securities and advising clients in complex corporate transactions such as mergers, acquisitions, private investments in public equity (PIPEs), private equity investments and joint ventures. He also counsels public companies on securities law compliance, disclosures and corporate governance matters.

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Alyse Sagalchik concentrates her practice on corporate matters, with an emphasis on mergers and acquisitions, joint ventures, private equity and securities transactions. Alyse also advises companies on a broad range of general corporate, federal securities laws and corporate governance matters, including Securities Exchange Act of 1934 reporting and disclosure matters. She has represented strategic and financial buyers and sellers in M&A transactions ranging in value from $10 million to more than $15 billion and spanning a wide variety of industries, including health care, technology, telecommunications, aerospace, food and beverage, hotels and energy.  In addition, Alyse maintains an active pro bono practice.

During law school, Alyse served as an associate editor for the University of Illinois Law Review and was an extern for the Honorable David Bernthal at the US District Court for the Central District of Illinois.

Mark D. Wood, corporate securities lawyer Katten Muchin Chicago Law firm

Mark D. Wood is head of Katten's Securities practice and concentrates in corporate and securities law. Mark represents public companies, issuers and investment banks in initial public offerings (IPOs) and other public offerings, private investment in public equity (PIPE) transactions, debt securities and other securities matters.

Mark also represents clients in complex corporate transactions, including tender offers, mergers, acquisitions, dispositions, going-private transactions, private equity investments, joint ventures and...