September 21, 2020

Volume X, Number 265

September 21, 2020

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SEC Issues FAQs Regarding COVID-19 Order

On May 4, 2020, the Securities and Exchange Commission (“SEC”) issued four frequently asked questions and related responses (“FAQs”) regarding the COVID-19 Order (the SEC’s Order issued on March 25, 2020 (Release No. 34-88465 available here), which as we previously reported here, gave public companies a 45-day extension to file certain periodic reports otherwise due between March 1 and July 1, 2020, subject to specified conditions). The FAQs address the impact of the COVID-19 Order in certain situations, specifically the disclosure required in order to take advantage of the extended filing deadline relief and the use of Form S-3 when taking advantage of such relief.

The FAQs provided by the SEC can be found here.

FAQ Regarding Disclosure Required for Extended Filing Deadline Relief

The first FAQ addresses the disclosure required in order to take advantage of the extended filing deadline relief under the COVID-19 Order; the registrant must disclose certain information on Form 8-K, which must be filed by the original filing deadline. In the FAQ, the SEC reiterated the substantive disclosure that must be set forth in Form 8-K, which we previously reported here (see “Conditions to Take Advantage of Extension”).

The SEC stated that all of the specified disclosures are necessary to appropriately rely on the COVID-19 Order.

FAQs Regarding Form S-3 if Taking Advantage of the Extended Filing Deadline Relief

The first FAQ regarding Form S-3 addresses whether a registrant may continue to conduct takedowns using an already-effective registration statement while relying on the extended filing deadline under the COVID-19 Order for a quarterly or annual report. The SEC clarified that a registrant can continue to conduct such takedowns if the registrant determines that the prospectus used complies with Section 10(a) of the Securities Act of 1933 (the “Securities Act”)[1], noting that the COVID-19 Order does not delay or exempt compliance with requirements for Securities Act registration statements.

The SEC specified that the decision whether to update the prospectus should be made by registrants and their legal advisers, as registrants remain responsible for the accuracy and completeness of their disclosure. 

The second FAQ regarding Form S-3 addresses the timing of when a registrant must reassess its eligibility to remain on an effective Form S-3 if the registrant has relied on the COVID-19 Order to delay filing its Form 10-K. The SEC clarified if a registrant relies on the COVID-19 Order to extend its Form 10-K due date, the registrant must reassess its eligibility when it files its Form 10-K. The registrant must meet all requirements of Form S-3 at the time the Form 10-K is filed on or prior to the extended due date in order to remain on Form S-3. The SEC specified that the Form 10-K will be considered timely if all of the required conditions of reliance on the COVID-19 order are met.

The final FAQ regarding Form S-3 clarifies that a registrant relying on the COVID-19 Order to extend a periodic report filing deadline may file a new Form S-3 registration statement even if the registrant has not filed the required periodic report prior to the filing of the registration statement. If the registrant has properly complied with the requirements to rely on the COVID-19 Order and files the relevant report by the extended due date, the SEC will consider such registrant to be current and timely in its reporting requirements under the Securities and Exchange Act of 1934. The SEC noted that it is not likely that the effective date of Form S-3 would be accelerated until the registrant files any information required to be included in Form S-3.

© 2020 Jones Walker LLPNational Law Review, Volume X, Number 132


About this Author

Alexandra Clark Layfield Corporate Attorney Jones Walker Law Firm

Alexandra Layfield joined Jones Walker's Corporate & Securities Practice Group in 2008. Ms. Layfield's practice is exclusively transactional, concentrating principally on the areas of securities law, mergers and acquisitions, general corporate law and corporate governance matters.

Ms. Layfield's principal area of focus is counseling corporations on corporate governance matters and the related disclosure requirements of the securities laws and trading markets, including reviewing annual, quarterly, and current reports, proxy statements, and...

Kaitlyn Daniel McGowan Associate Corporate Practice Group

Kaitlyn Daniel McGowan is an associate in the Corporate Practice Group.

While in law school, Kaitlyn externed for Judge John W. deGravelles of the US District Court for the Middle District of Louisiana and served as a research assistant. She also served as a production editor for the LSU Journal of Energy Law and Resources.