IN BRIEF

How Are the SEC and the Fed Responding to the Coronavirus?

April 7, 2020

Federal Reserve building
The Marriner S. Eccles Federal Reserve building in Washington, D.C., on March 17, 2020.

Covid-19 has had an impact on virtually every element of global business, and the securities law space is no exception. Below, Bloomberg Law securities experts highlight how the U.S. financial system is handling the crisis.

[For more information on how the coronavirus is affecting global markets and more, please visit our resource page.]

What type of regulatory relief is the SEC offering companies?

On Jan. 30, SEC Chairman Jay Clayton said in a public statement that he asked staff to “monitor and, to the extent necessary or appropriate, provide guidance and other assistance to issuers and other market participants regarding disclosures related to the current and potential effects of the coronavirus.”

The SEC announced on March 25 an order offering publicly traded companies additional time to file certain disclosure reports originally due between March 1 and July 1, 2020, an extension of an earlier announcement. In the same release, the agency also announced relief measures for investment funds and advisers to offer additional time related to holding in-person board meetings and meeting certain filing and delivery requirements.

On March 26, the SEC published another release, announcing more relief measures. Those include permitting companies to gain access to the EDGAR system without the typically required notarization through July 1, 2020, and the extension of filing deadlines for reports related to Regulation A and Regulation Crowdfunding issuers, as well as the annual updates to Form MA required of municipal advisers.

How are companies handling shareholder meetings when they can’t meet in person?

SEC issued guidance on March 13 urging companies to make virtual accommodations for meetings. To facilitate this, the agency is letting companies announce a change of meeting plans without sending out a full filing to investors.

“The affected parties can announce in filings made with the SEC the changes in the meeting date or location or the use of ‘virtual’ meetings without incurring the cost of additional physical mailing of proxy materials,” the agency states. “The guidance also encourages companies to provide shareholder proponents with alternative means, such as by telephone, to present their proposals at the annual meetings.”

[Sign up for our April 15 webinar: Health Law and the Coronavirus: What Attorneys at the Front Line of the Pandemic Need to Know]

Practical Guidance: Coronavirus Toolkit

Bloomberg Law’s new toolkit will help you navigate an array of Covid-19 issues, including employment policies and procedures, contract management, and more.

What information about Covid-19 are organizations including in disclosures and SEC filings?

More than 1,940 companies have now included coronavirus risks in their Form 10-K risk disclosures filed with the SEC since Levi Strauss & Co. first did so on January 30, 2020.

Additionally, more than 40 asset managers have updated their shareholder prospectuses to include warnings about the financial risks due to pandemic in U.S. Securities and Exchange Commission filings. Most are using similar language, stating that pandemics are among a range of potential hazards for investors, though some statements are more comprehensive than others.

On March 25, the SEC released guidance related to disclosure and other legal obligations that companies should consider in light of Covid-19-related business and market disruptions. The guidance includes a series of “illustrative but not exhaustive” questions that companies should be asking while “assessing the evolving effects of COVID-19 and related risks.”

What measures is the Federal Reserve taking to mitigate Covid-19 impacts?

The U.S. central bank has added more than $1 trillion to the financial system in recent weeks, with more money to come. This time, unlike during the 2008 financial crisis, the Fed’s support is much more widespread than propping up the banking system.

In the last two weeks alone, the central bank has purchased $942 billion in Treasuries and mortgage-backed securities. The Fed this week also provided more than $50 billion in cheap loans to banks through its discount window.

Additionally, the Fed also announced in an April 1 statement that it will temporarily relax its leverage ratio rule to allow Wall Street banks to take on more leverage. The goal of the move is “to ease strains in the Treasury market resulting from the coronavirus and increase banking organizations’ ability to provide credit to households and businesses.”


Bloomberg Law’s resource page offers additional guidance to help you advise clients and businesses through the impact of Covid-19.

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