SEC Extends Deadline for Form ADV and Form PF Filing for Advisers, Disclosure Relief for Registered Funds and Business Development Companies

SEC Extends Deadline for Form ADV and Form PF Filing for Advisers, Disclosure Relief for Registered Funds and Business Development Companies

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On March 13, 2020, the Securities and Exchange Commission (SEC) issued an order (the Advisers Act Release) under the Investment Advisers Act of 1940 (Advisers Act) providing regulatory relief for investment advisers whose operations are affected by COVID-19.1 The relief gives affected SEC-registered investment advisers (RIAs) and exempt reporting advisers (ERAs) that are subject to Form ADV filing deadlines between March 13, 2020, and April 30, 2020, an extension of 45 days to submit Form ADV filings and to meet delivery obligations regarding Form ADV Part 2.2 Similarly, the relief gives RIAs an extension of 45 days to file Form PF.3

Simultaneously, the SEC issued an order (the 1940 Act Release) under the Investment Company Act of 1940 (Investment Company Act) granting similar relief to registered funds and business development companies (BDCs) from certain filing requirements.4 The SEC order also formally adopts the temporary relief provided by the SEC staff in a prior no-action position from statutory and regulatory in-person board meeting requirements for approvals and renewals. The order also provides limited relief from requirements to deliver prospectuses to existing investors. 

This relief to investment advisers, registered funds and BDCs is conditioned on the adviser or fund encountering an actual COVID-19-related disruption and being “unable to meet a filing deadline or delivery requirement due to circumstances related to current or potential effects of COVID-19.”5

This alert highlights the specific relief granted and the conditions and notice requirements that advisers and funds need to meet in each case.

Advisers Act Relief

Under the Advisers Act Release, if the conditions described below are satisfied, the deadlines for the following filing and delivery obligations (“for which the original due date is on or after [March 13, 2020], but on or prior to April 30, 2020”) are extended for 45 days:

  • RIAs to file an amendment to Form ADV under Rule 204-1 of the Advisers Act;
  • RIAs to deliver Form ADV Part 2 (or a summary of material changes) to existing clients under Rule 204-3(b)(2) and (b)(4) of the Advisers Act (collectively with the above bullet, the RIA ADV Obligations);
  • ERAs to file reports on Form ADV under Rule 204-4 of the Advisers Act; and
  • RIAs to file Form PF if required by Section 204(b) and Rule 204(b)-1 of the Advisers Act.6

Conditions required for relief:

  • The RIA or ERA cannot meet a filing deadline or delivery requirement due to current or potential effects of COVID-19;
  • An RIA relying on the relief with respect to RIA ADV Obligations promptly notifies the SEC via email at [email protected] and discloses on its public website (i) that it is relying on the applicable relief, (ii) a brief description of why it was unable to meet the applicable deadline/obligation and (iii) an estimated date by which it expects to complete the relevant obligation (clauses (i) through (iii) collectively, the Required Items);
  • An RIA relying on the relief with respect to filing Form PF promptly notifies the SEC via email at [email protected] of the Required Items; and
  • The RIA completes the RIA ADV Obligations or file Form PF as soon as practicable, “but no later than 45 days after the original due date for [the] filing or delivery, as applicable.”7

1940 Act Relief

The 1940 Act Release provides the following relief:

In-person voting

  • Registered investment companies, BDCs, and their advisers and principal underwriters are granted relief from requirements that votes of the board of directors of either the registered investment company or BDC be cast in person from March 13, 2020, through June 15, 2020, provided that:
    • Reliance on the 1940 Act Release is necessary or appropriate due to current or potential effects of COVID-19;
    • Votes required at an in-person meeting are instead cast at a meeting in which directors can participate by any means of a communication that allows the directors to hear each other simultaneously; and
    • The majority of non-interested directors ratify the relevant action at the next in-person meeting.89

Forms N-CEN and N-PORT

  • Registered investment companies that are required to file Form N-CEN pursuant to Rule 30a-1 under the Investment Company Act or Form N-PORT pursuant to Rule 30b1-9 under the Investment Company Act are temporarily exempt from such filing requirements from March 13, 2020, through April 30, 2020, provided that:
    • The registered fund is unable to meet a filing deadline due to current or potential effects of COVID-19;
    • Any registered fund relying on the 1940 Act Release promptly notifies the SEC via email at [email protected] of the Required Items;
    • Any registered fund relying on the 1940 Act Release states on its public website that it is relying on such relief and why it is unable to meet the relevant deadline;
    • The registered fund files such Form N-CEN or Form N-PORT report “as soon as practicable, but not later than 45 days after the original due date”; and
    • Any Form N-CEN or Form N-PORT filed pursuant to the 1940 Act Release includes “a statement of the filer that it relied on the [1940 Act Release]” and the reasons why it was unable to timely file such report.10

Annual and semi-annual reports

  • A registered investment company is temporarily exempt from the requirements of Section 30(e) and Rule 30e-1 of the Investment Company Act and a registered unit investment company trust is temporarily exempt from the requirements of Section 30(e) and Rule 30e-2 of the Investment Company Act to transmit annual and semi-annual reports to investors from March, 13, 2020, through April 30, 2020, provided that:
    • The registered fund is unable to prepare or transmit the report due to current or potential effects of COVID-19;
    • Any registered fund relying on the 1940 Act Release promptly notifies the SEC via email at [email protected] of the Required Items;
    • Any registered fund relying on the 1940 Act Release states on its public website that it is relying on such release and why it is unable to meet the relevant deadline; and
    • The registered fund transmits the reports to shareholders “as soon as practicable, but not later than 45 days after the original due date[,] and files the report within 10 days of its transmission to shareholders.”11

Form N-23C-2

  • Closed-end funds and BDCs are temporarily exempt from the requirement to file with the Commission notices of their intention to call or redeem securities at least 30 days in advance under Sections 23(c) and 63, as applicable, of the Investment Company Act and Rule 23c-2 thereunder if such company files a Form N-23C-2 with the SEC “fewer than 30 days prior to, including the same business day as, the company’s call or redemption of securities of which it is the issuer” from March 13, 2020, through June 15, 2020, provided that it:
    • Promptly notifies the SEC via email at [email protected] stating that it is relying on the 1940 Act Release and a brief description of “the reasons why it needs to file a [Form N-23C-2] fewer than 30 days in advance of the date set by [it] for calling or redeeming the securities of which it is the issuer”;
    • Ensures that the filing of the Form N-23C-2on an abbreviated time frame is permitted under relevant state law and its governing documents; and
    • Files a Note containing all of the information required by Rule 23c-2 before “any call or redemption of existing securities, the commencement of any offering of replacement securities, and providing notification to the existing shareholders whose securities are being called or redeemed.”12

Prospectus delivery

  • The SEC will not bring forth an enforcement action if a registered fund does not timely deliver to its investors its current prospectus due to COVID-19-related issues, provided that:
    • The sale of shares to the investor was not an initial purchase by the investor of shares of the registered fund;
    • The registered fund notifies the SEC via email at [email protected] of the Required Items;
    • The registered fund publishes on its public website that it intends to rely on this relief and briefly states why it could not timely deliver the prospectus;
    • The registered fund publishes its current prospectus on its public website; and
    • Delivery originally was required between March 13, 2020 and April 30, 2020, and the prospectus “is delivered to investors as soon as practicable, but not later than 45 days after the date originally required.”13

Conclusion

The SEC’s orders will provide useful relief to certain investment advisers and funds negatively affected by the COVID-19 pandemic. The SEC noted that it “will consider additional relief from other regulatory requirements” and “may extend the time period for relief.”14 Advisers and funds interested in taking advantage of the relief should keep in mind that the relief is not self-executing – it often requires taking affirmative steps as noted above, such as sending an email to the SEC with certain required information. Also, it is currently unclear how the SEC will determine whether an adviser or fund is sufficiently affected by COVID-19 to warrant the relief. The SEC encourages those with questions or concerns relating to COVID-19’s impact on advisers and funds to email the SEC.15

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