Client Alert
SEC Extends Advisers Act Temporary Exemptive Relief Related to COVID-19 (Form ADV and Form PF) to June 30, 2020
Client Alert
SEC Extends Advisers Act Temporary Exemptive Relief Related to COVID-19 (Form ADV and Form PF) to June 30, 2020
March 26, 2020
As we mentioned in our previous Client Briefing, which is available here, in an effort to address disruptions due to the COVID-19 global pandemic, the Securities and Exchange Commission (the “SEC”) issued an order on March 13, 2020 (the “Original Order”)[1] providing temporary exemptive relief until April 30, 2020 (unless extended) to registered investment advisers and exempt reporting advisers relating to their obligations to file and deliver Form ADV amendments and, to the extent applicable, file Form PF.
On March 25, 2020, the SEC issued an order (the “Subsequent Order”)[2] further extending the time period for the temporary exemptive relief under the Original Order, and providing additional guidance for investment advisers and exempt reporting advisers wishing to avail themselves of the temporary exemptive relief, including removing the Original Order’s conditions that advisers (i) include in their email correspondence to the SEC and on their website, as applicable, why the adviser is unable to meet a filing deadline or delivery requirement, and (ii) provide an estimated date of filing or delivery.
Generally, while an adviser’s applicable filing and delivery obligations must still be satisfied no later than 45 days after the original due date for filing or delivery, the Subsequent Order generally makes the temporary exemptive relief available for filing and delivery obligations due on or prior to June 30, 2020 (unless further extended).
Temporary Exemptive Relief Provided by the Subsequent Order
Subject to certain conditions described below, the Subsequent Order provides the following temporary exemptive relief:
- A registered investment adviser is exempt from the requirement to file an amendment to Form ADV under Rule 204-1 of the Advisers Act.
- A registered investment adviser is exempt from the requirement 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.
- An exempt reporting adviser is exempt from the requirement to file a report on Form ADV under Rule 204-4 under the Advisers Act.
- To the extent required, a registered investment adviser is exempt from the requirement to file Form PF under Section 204(b) of and Rule 204(b)-1 under the Advisers Act.
Conditions to Temporary Exemptive Relief Under the Subsequent Order
As with the Original Order, the temporary exemptive relief granted under the Subsequent Order is not self-executing. Registered investment advisers and exempt reporting advisers wishing to avail themselves of the temporary exemptive relief provided under the Subsequent Order must meet the following conditions, to the extent applicable:
- General Condition:
- A registered investment adviser or exempt reporting adviser must be unable to meet a filing deadline or delivery requirement due to circumstances related to current or potential effects of COVID-19.
- Registered Investment Advisers:
- A registered investment adviser relying on the Subsequent Order with respect to the filing of Form ADV or delivery of its brochure, summary of material changes, or brochure supplement, must promptly notify the SEC at IARDLive@sec.gov, and disclose on its public website,[3] that it is relying on the Subsequent Order.
- A registered investment adviser relying on the Subsequent Order with respect to filing Form PF must promptly notify the SEC at FormPF@sec.gov that it is relying on the Subsequent Order.
- The registered investment adviser must file Form ADV and, to the extent applicable, Form PF, and deliver its brochure (or summary of material changes) and brochure supplement, to the extent required, as soon as practicable, but no later than 45 days after the original due date for filing or delivery, as applicable.
- Exempt Reporting Advisers:
- An exempt reporting adviser relying on the Subsequent Order with respect to the filing of Form ADV must promptly notify the SEC at IARDLive@sec.gov, and disclose on its public website,[4] that it is relying on the Subsequent Order.
- The exempt reporting adviser must file Form ADV as soon as practicable, but no later than 45 days after the original due date for filing.
As with the Original Order, the Subsequent Order asks registered investment advisers and exempt reporting advisers relying on the temporary exemptive relief to evaluate their obligations, including their fiduciary duty, under the federal securities laws.
As we mentioned in our previous Client Briefing, which is available here, we generally expect further guidance in respect of business continuity planning, and perhaps definitive rulemaking activity, from the SEC once the COVID-19 crisis is over.
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We understand that many of you will have questions regarding your compliance and fiduciary obligations during this difficult time and we are available to answer your questions. For more information on the topics included herein, please contact a member of Winston & Strawn’s Investment Management or Private Investment Funds group.
View all of our COVID-19 perspectives here. Contact a member of our COVID-19 Legal Task Force here.
[1] The SEC’s Original Order is available here.
[2] The SEC’s Subsequent Order is available here.
[3] If the registered investment adviser does not have a public website, it must promptly provide such notice to its clients and/or private fund investors.
[4] If the exempt reporting adviser does not have a public website, it must promptly provide such notice to its clients and/or private fund investors.