SEC Continues to Roll Out Guidance and Exchange Act Filing Relief During COVID-19

March 30, 2020

As public companies continue to grapple with how to meet their disclosure obligations in light of the novel coronavirus (COVID-19) pandemic, the U.S. Securities and Exchange Commission and its Division of Corporation Finance continue to provide disclosure guidance on Regulation FD and other matters and extended temporary Exchange Act filing relief.

Read on for an update on SEC guidance and exemptive relief issued March 25, 2020.

SEC Division of Corporation Finance Issues Disclosure Guidance

On March 25, 2020, the SEC’s Division of Corporation Finance issued CF Disclosure Guidance: Topic No. 9 to set forth its current views regarding disclosure and securities laws obligations, given the ongoing global coronavirus crisis. The Division noted that COVID-19 related issues can be material to investment and voting decisions, including the effects COVID-19 has had on a company, what management expects its future impact will be, how management is responding to evolving events, and how it is planning for COVID-19-related uncertainties.

The Division stated that registrants should be diligent in providing specific disclosures relating to COVID-19 risks and the evolving impacts of the pandemic on their business. In particular, the Division offered a list of over 20 illustrative questions for registrants to consider in disclosing the impact of COVID-19 with respect to the following aspects of the registrant’s business:

  • its financial condition and results of operations, both potential short- and long-term impacts,
  • its capital and financial resources, liquidity position and outlook,
  • its balance sheet or assets (including material impairments),
  • its operations and financial reporting system, including the impact of its staff working remotely or travel restrictions or border closures affecting its ability to operate and achieve its business goals, and
  • potential risks to the registrant’s supply chain, demand for the registrant’s products, human capital resources or productivity.

The Division noted that the list of potential disclosure questions is only a sample of potential impacts of COVID-19 on companies and encouraged registrants to tailor the disclosures to their business and proactively revise and update disclosures as facts and circumstances change.

The Division also reminded registrants regarding their obligations (1) under Regulation FD related to selective disclosures and (2) to institute controls preventing corporate insiders who become aware of a risk related to COVID-19 that would be material to investors from trading in the registrant’s stock until such information is publicly disclosed. (See also the March 23 Statement Regarding Market Integrity from the SEC Division of Enforcement reminding market participants of the importance of controlling material nonpublic information in connection with the unprecedented market and economic conditions caused by COVID-19, as summarized in McGuireWoods’ March 25 Subject to Inquiry blog post.)

Finally, the Division provided guidance regarding earnings estimates and other financial results prior to finalizing financial reporting for a given period. Noting that the impact of COVID-19 on businesses may present novel or complex accounting issues that may take more time for companies and their auditors to resolve, the Division encouraged companies to proactively address financial reporting matters earlier than usual. This would include, for example, engaging experts promptly as necessary to determine any goodwill or other asset impairment arising out of the COVID-19 situation.

The Division also reminded registrants of existing requirements with respect to disclosing non-GAAP financial measures in reporting their earnings releases. Of note, the Division stated that it would not object to an issuer reconciling non-GAAP financial measures to preliminary GAAP financial measures in earnings releases when the preliminary GAAP measure includes either provisional amount(s) based on a reasonable estimate, or a range of reasonably estimable GAAP results. Furthermore, the Division stated that if a registrant presents non-GAAP financial measures that are reconciled to provisional amounts, it should limit the non-GAAP measures in its earnings presentation to those used to report financial results to its board.

SEC Grants Additional Exemptive Relief to Registrants

Also on March 25, 2020, the SEC Staff issued an order extending the conditional relief previously granted to registrants who may have a filing hardship related to the COVID-19 pandemic. The exemptive order applies to Form 10-Ks, 10-Qs, 8-Ks, definitive proxy statements and related soliciting materials, and Schedule 13G filings. Section 16 reports on Forms 3, 4 and 5, and Schedule 13D filings (and amendments thereto) were not covered.

The SEC originally issued on March 4, 2020, an order granting an exemption from certain filing requirements under the Securities Exchange Act of 1934 during the period from March 1, 2020, through April 30, 2020. The new order extends the period during which registrants may seek exemptive relief until July 1, 2020. The SEC further noted that it may provide additional extensions if it deems such extensions appropriate. The SEC issued comparable guidance to investment funds and investment advisers.

To be eligible for the exemption, registrant must (1) be unable to meet the deadline due to COVID-19 issues and (2) furnish a Form 8-K (or, if eligible, a Form 6-K) by the later of March 16, 2020, or original filing deadline of the report, stating the following:

  1. That the registrant is relying on the SEC’s exemptive order;
  2. A brief description of why the registrant cannot timely file the report;
  3. The estimated date for the filing of the report that is being delayed;
  4. A company specific risk factor or factors explaining the impact, if material, of COVID-19 on the registrant’s business; and
  5. If the report cannot be filed on time due to the inability of a person other than the registrant to issue a required opinion, report, or certification, the 8-K or 6-K should also contain a statement signed by such other person stating why they are unable to provide the required opinion, report, or certification.

Registrants (or persons required to make filings) must make the delayed filing no later than 45 days after the original due date.


Expect the SEC to continue to monitor and potentially issue new guidance and additional relief.

McGuireWoods’ COVID-19 Response Team helps clients navigate urgent and evolving legal and business issues arising from the novel coronavirus pandemic. Lawyers in the firm’s 21 offices are ready to assist quickly on questions involving compliance with securities laws, corporate governance, insurance, labor and employment, real estate and more. For assistance, contact a team member listed or send an email to [email protected].

McGuireWoods has published additional thought leadership related to how companies across various industries can address crucial COVID-19-related business and legal issues.