On Wednesday, March 25, 2020, the U.S. Securities and Exchange Commission (the “SEC”) issued an order under the Investment Advisers Act of 1940, as amended (the “Advisers Act”) and an order under the Investment Company Act of 1940, as amended (the “Investment Company Act”) extending the period for which previously-granted conditional relief is available, as summarized in the chart below.

The previously-granted relief was announced on March 13, 2020 and provided exemptions related to (i) certain filing and delivery requirements for investment advisers, registered investment companies and business development companies (“BDCs”) and; (ii) in-person board meeting requirements for registered investment companies and BDCs.  The orders issued on March 25, 2020 supersede those issued on March 13, 2020.  For additional information on the original orders, see our previous client alert here.

In addition to extending the period for which the conditional relief is available, the SEC eliminated certain conditions from the original orders that registrants believed would be difficult to comply with given the quickly-changing situation relating to the ongoing coronavirus outbreak.

INVESTMENT ADVISERS

Relief Granted by SEC in Original Advisers Act Order* Period Covered by Original Order Extended Period Under New Order Conditions Eliminated

45-day extension for the following filing/delivery obligations:

• Registered investment advisers’ Form ADV filing requirements;

• Exempt reporting advisers’ obligation to file reports on Form ADV Part 1A;

• Registered investment advisers’ obligation to deliver amended brochures, brochure supplements or a summary of material changes to clients; and

• Private fund advisers’ Form PF filing requirements.

Obligations for which the original due date is on or after March 13, 2020 but on or prior to April 30, 2020. Obligations for which the original due date is on or after March 13, 2020 but on or prior to June 30, 2020.

No longer required to:

• Include, in its email correspondence to the SEC and on its website, as applicable, why it is unable to meet a filing deadline or delivery requirement; or

• Provide an estimated date of filing or delivery completion.

* https://www.sec.gov/rules/other/2020/ia-5463.pdf

INVESTMENT COMPANIES AND BDCs

Relief Granted by SEC in Original Investment Company Act Order* Period Covered by Original Order Extended Period Under New Order Conditions Eliminated
Relief from requirements that certain agreements, plans or arrangements be approved by a fund’s board of directors by an in-person vote. March 13, 2020 to (and including) June 15, 2020 March 13, 2020 to (and including) August 15, 2020 N/A
45 day extension to Form N‑CEN and Form N-PORT filing deadlines. Filings for which the original due date is on or after March 13, 2020 but on or prior to April 30, 2020. Filings for which the original due date is on or after March 13, 2020 but on or prior to June 30, 2020.

No longer required to:

• Include, in its email correspondence to the SEC and on its website, why it is unable to File Form N-CEN or Form N-PORT; or

• Provide an estimated date by which it expects to file such report.

45 day extension from annual and semi-annual report transmittal deadlines. Filings for which the original due date is on or after March 13, 2020 but on or prior to April 30, 2020. Filings for which the original due date is on or after March 13, 2020 but on or prior to June 30, 2020.

No longer required to:

• Include, in its email correspondence to the SEC and on its website, why it is unable to time its report on a timely basis; or

• Provide an estimated date by which it expects to file such report.

Exemption from the requirement to file Form N-23C-2 at least 30 days prior to calling or redeeming securities. March 13, 2020 to (and including) June 15, 2020. March 13, 2020 to (and including) August 15, 2020. No longer required to include, in email correspondence to the SEC, a brief description of the reasons why it needs to file a notice fewer than 30 days in advance of the date set by the closed-end fund or BDC, as applicable, for calling or redeeming the securities of which it is the issuer.
45 day extension from registered fund prospectus delivery requirements [1] Delivery was originally required on or after March 13, 2020 but on or prior to April 30, 2020. Delivery was originally required on or after March 13, 2020 but on or prior to June 30, 2020.

No longer required to:

• Include, in its email correspondence to the SEC and on its website, a brief description of why it or any other person required could not deliver the prospectus to investors on a timely basis; or

• Provide an estimated date by which it expects the prospectus to be delivered.

https://www.sec.gov/rules/other/2020/ic-33817.pdf

Conclusion

The SEC and its staff continue to assess impacts relating to the coronavirus on investors and market participants.  The SEC may provide additional relief as circumstances warrant and, as evidenced by these recent events, may extend and/or modify currently available relief.

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[1] Unlike the other relief described herein, where the SEC used its exemptive authority pursuant to various provisions of the Advisers Act and the Investment Company Act, the relief granted with respect to prospectus delivery requirements is an SEC statement that it would not provide a basis for an SEC enforcement action so long as a registered fund operated within the terms of the order.

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Photo of Howard Beber Howard Beber

Howard J. Beber is a partner in the Corporate Department and co-head of the Private Funds Group, which is recognized by Chambers GlobalChambers USA and US Legal 500. His practice focuses on representing private funds sponsors in all aspects of…

Howard J. Beber is a partner in the Corporate Department and co-head of the Private Funds Group, which is recognized by Chambers GlobalChambers USA and US Legal 500. His practice focuses on representing private funds sponsors in all aspects of their business, including fund formation and ongoing operations and internal structuring and compliance. His practice includes buyout, growth equity, venture capital, private credit, secondary and fund-of-funds, ranging from some of the largest and well known sponsors in the industry to newly-formed managers.

He advises clients on a broad range of secondary transactions, including the acquisition and sale of partnership interests, tender offers, preferred equity financings, continuation funds,  fund restructurings and other GP-led transactions, and has worked with several management teams on large spin-out transactions. Howard routinely represents some of the most active institutional and fund-of-fund investors when investing in venture capital, growth equity, buyout, private credit and other private investment funds, as well as co-investment transactions.

Howard has been an active member of the Private Investment Funds industry for many years. He is frequently invited to speak at major industry events and has authored numerous articles regarding managing and investing in private investment funds. Howard is a contributing author to “The Business of Venture Capital,” a leading book on the venture capital industry.

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Stuart Coleman has counseled registered funds and their independent board members and market-leading investment advisers for more than 35 years, through cycles of industry expansion and innovation and in times of economic and regulatory crisis. His clients include funds and/or boards in more…

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A well-known individual in the industry, Stuart has chaired the New York City Bar Association Committee on Investment Management Regulation and has served on the ABA’s Task Force on the Fund Director’s Guidebook. In addition, he has spoken at numerous prominent industry conferences and before industry groups.

He is passionate about the performing arts in New York City. He and his wife serve on the boards of a number of dance companies and performing arts venues.

Before joining Proskauer, Stuart was the co-managing partner of a national law firm for 12 years.

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Janna Manes has worked with registered investment companies and their boards of directors (primarily mutual funds and ETFs) for all of her more than 25 years of practice. In addition to private practice, Janna served as General Counsel of a major asset management…

Janna Manes has worked with registered investment companies and their boards of directors (primarily mutual funds and ETFs) for all of her more than 25 years of practice. In addition to private practice, Janna served as General Counsel of a major asset management firm. As a result, her skill set covers the full range of the Investment Company Act practice. Her background and diverse experiences with a varied client base enable her to provide practical, timely advice appropriate to a client’s specific circumstances.

Janna advises many of her clients on a day-to-day basis on legal requirements and industry practices regarding compliance matters, SEC filings, board governance matters and fund formations and reorganizations.  She also has extensive experience negotiating both routine and complex service provider agreements, structuring and reviewing compliance programs, and assisting clients in managing long term projects to comply with new regulations or implement fund management or board initiatives.

Photo of Stephen T. Mears Stephen T. Mears

Stephen T. Mears is a partner in the Corporate Department and co-head of the Private Funds Group. He concentrates on private investment funds, including venture capital, growth equity and buyout funds. He represents fund sponsors in all aspects of fund formation, operation and…

Stephen T. Mears is a partner in the Corporate Department and co-head of the Private Funds Group. He concentrates on private investment funds, including venture capital, growth equity and buyout funds. He represents fund sponsors in all aspects of fund formation, operation and management, including fund structuring, portfolio investments, sales and distributions, internal governance and management, regulatory compliance and ongoing maintenance and administration. Stephen also represents institutional investors in connection with their participation in private investment funds.

Stephen has recently represented sponsors in raising funds ranging in size from under $100 million to over $2.5 billion.

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Robert Plaze’s experience gives him a unique understanding of the SEC and the federal securities laws affecting our clients. Following nearly 30 years in the SEC’s Division of Investment Management, most recently as Deputy Director, Bob is a partner in Proskauer’s Registered Funds…

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David Stephens is a partner and a member of the Registered Funds Group. David has particular expertise in matters arising under the Investment Company Act. David’s experience covers virtually all types of investment companies, including registered and unregistered, open-end and closed-end, ETF’s, and…

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