The novel coronavirus pandemic that began in China last year and is now circling the globe is leading to a raft of changes in the US and elsewhere when it comes to regulatory agility and adaptability. The Securities and Exchange Commission has extended conditional regulatory reporting requirements for public companies in order to give them some breathing room during the COVID-19 pandemic. Applying to filings due to the SEC by July 1, the extension mirrors those offered by the agency for the months of March and April where it allowed companies 45-days to complete their necessary filings. SEC staff further advised companies to more broadly disclose coronavirus-related setbacks for their company rather than employ “selective disclosures” around this area, Reuters reports. Further, the agency advised that companies may need to re-examine previously submitted filings for material inaccuracies given how much the situation on the ground is changing due to the COVID-19 pandemic. Another piece of advice delivered by the SEC to impacted companies is that company executives should refrain from stock purchases and other transactions until relevant knowledge is made public.
The SEC is not the only government agency taking direct action to stem the negative impacts of the pandemic. The US Congress passed a stimulus package aimed at ameliorating the most negative effects of the pandemic while also providing both citizens and companies with relief in the form of loans and direct payments.
As for why companies might need more time when it comes to filing required reporting, the COVID-19 pandemic has had unexpected consequences for the broader economy and has impacted different companies in varying ways that may not be fully understood at the present. The extension not only allows this cohort some breathing room to assess and develop a strategy for moving forward but also gives investors, lenders, and others more flexibility when it comes to various mechanistic functions of the economy.
SEC Chairman Jay Clayton said in a statement to the press, “These actions provide temporary, targeted relief to issuers…At the same time, we encourage public companies to provide current and forward-looking information to their investors.”
Other accommodations include allowing company boards more time to meet and finalize yearly submissions as well. Given the extremely contagious nature of the COVID-19 virus, many companies around the world are being encouraged to have staff work from home where possible. When impossible, many people have found themselves furloughed or laid off from work. Such restrictions make public gatherings not only difficult but nearly impossible. Since procedural matters like board meetings nearly impossible to have.
In addition to the stimulus package, government agencies are trying to make it as easy as possible for necessary supplies and logistics to continue flowing regardless of what either the stock market or broader financial markets dictate hence why agencies like the SEC are placing less of an emphasis on routine reporting than they are on maintaining continuity of business operations to the greatest extent possible.
