SEC provides additional relief for Hurricane Sandy victims

On November 14, 2012, the U.S. Securities and Exchange Commission (SEC) issued an Order providing further regulatory relief and assistance to a broad class of companies and others affected by Hurricane Sandy. The Order conditionally exempts registrants and others from compliance with the federal securities laws as it relates to Securities Exchange Act of 1934 (Exchange Act) filing requirements; proxy and information statement delivery requirements; Investment Company Act of 1940 delivery requirements for annual and semi-annual reports of registered investment companies; transfer agent compliance with certain Exchange Act sections and rules; and auditor independence requirements.

Deadlines pursuant to the Exchange Act for any filing due during the period from October 29, 2012 to November 20, 2012 were extended, provided that such report, schedule or form is filed on or before November 21, 2012 and includes the reasons why, in good faith, the filing is delayed. Since the due date is considered November 21, companies will be permitted to rely on Rule 12b-25 if they are unable to file the required reports on or before November 21, 2012.

Also, the SEC provided a limited exemption from auditor independence requirements of the Exchange Act and Regulation S-X. The Order allows an auditor to assist its audit clients in the reconstruction of previously existing accounting records that were lost or destroyed as a result of Hurricane Sandy, provided that such services

  • Cease as soon as the lost or destroyed records are reconstructed, the financial systems are fully operational, and orderly and efficient transition to management or other service provider can be effected
  • Are pre-approved by the Audit Committee

For purposes of eligibility to use Form S-3 and Form S-8, as well as well-known seasoned issuer status, a company relying on the Order will be considered current and timely in its Exchange Act reports prior to and as of November 21 if it was current and timely in its Exchange Act reports as of October 28 and has made any filings required during the period from October 29 to November 20 on or before November 21, 2012.

In addition, the Order provides that when certain conditions are met:

  • A registered open-end investment company and a registered unit investment trust will have satisfied its prospectus delivery requirements
  • A registered investment adviser will have satisfied Form ADV filing requirements
  • A registered investment adviser will have satisfied the requirement to deliver written disclosure statements to its advisory client

The Order encourages those affected by Hurricane Sandy with additional or different assistance requests than provided for in the Order to contact the SEC staff directly.

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