United States

SEC extends conditional relief and issues disclosure guidance


(Updated April 8, 2020)

Due to the effects of the coronavirus on U.S.-listed companies located, or with operations, in affected areas, the SEC has extended its conditional regulatory relief to address compliance issues with respect to certain federal securities laws. The SEC’s March 25, 2020 Order provides, subject to certain conditions, publicly traded companies an additional 45 days to file certain disclosure reports, such as Exchange Act annual and quarterly reports (e.g., Forms 10-K, 10-Q, 11-K), that would have been due between March 1 and July 1, 2020. Among other conditions, companies must furnish a Form 8-K by the later of March 16 or the original reporting deadline to convey, among other matters, why the relief is needed in their particular circumstances. In addition, the Order includes certain exemptions from proxy delivery requirements, the application of which should be discussed with SEC legal counsel. Further information regarding the application of the March 25, 2020 Order to the filing of Form 10-K Part III information is available in Question 104.18 of the SEC’s Exchange Act Forms Compliance and Disclosure Interpretations

On March 25, 2020, the SEC Division of Corporation Finance also issued Disclosure Guidance: Topic No. 9, Coronavirus (COVID-19), to provide the staff’s current views regarding disclosure and other securities law obligations companies should consider with respect to COVID-19 and related business and market disruptions. The guidance states that disclosure about the evolving effects of COVID-19 and related risks, including how the company and management are responding to them, should be specific to a company’s situation. The guidance encourages timely reporting while recognizing that it may be difficult to assess or predict with precision the broad effects of COVID-19 on industries or individual companies.

In light of their disclosure obligations, companies are advised to take steps to prevent their directors, officers and other corporate insiders from initiating securities transactions until investors have been appropriately informed about such risks. When companies disclose material information related to the effects of the coronavirus, they are reminded to avoid selective disclosures and to disseminate such information broadly. A company may need to update previous disclosures to the extent that the information becomes materially inaccurate. 

The SEC reminds registrants that the impact of COVID-19 on business may present a number of novel or complex accounting issues that take time to resolve. Companies are advised to proactively address financial reporting matters earlier than usual and, as necessary, consult with experts promptly so that reporting remains as timely as possible, as well as complete and accurate. 

If a company presents a non-GAAP financial measure or performance metric to adjust for or explain the impact of COVID-19, such presentations should be in accordance with Regulation S-K, Regulation G and the recent Commission Guidance on Management’s Discussion and Analysis of Financial Condition and Results of Operations. The guidance in Topic No. 9 addresses certain circumstances in which it may be permissible to reconcile, and provide appropriate disclosures related to, a non-GAAP financial measure to preliminary GAAP results that either include provisional amounts based on a reasonable estimate, or a range of reasonably estimable GAAP results. However, where GAAP financial statements are required, such as in filings on Form 10-K or 10-Q, companies should reconcile to GAAP results and not include provisional amounts or a range of estimated results.

Companies requiring additional or different assistance in their efforts to comply with the requirements of the federal securities laws are encouraged to contact SEC staff. The staff will address issues on a case-by-case basis in light of their fact-specific nature. Further information regarding the SEC’s response to COVID-19 and the related effects on the securities markets is available on the SEC’s website

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