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The SEC Announces Relief Measures for Those Affected by Hurricane Sandy

Yesterday the Securities and Exchange Commission announced the issuance of an order exempting publicly traded companies and others affected by Hurricane Sandy and its aftermath from certain Exchange Act rules and requirements.

Exchange Act Reports, Schedules and Forms

In particular, the order conditionally exempts issuers subject to Sections 13(a) or 15(d) of the Exchange Act from the requirement to file certain Exchange Act reports, schedules or forms during the period from and including October 29, 2012 through November 20, 2012, provided that the issuer:

  • is unable to meet a filing deadline due to Hurricane Sandy and its aftermath;
  • files the required report, schedule or form by November 21, 2012; and
  • discloses in the report, schedule or form that it is relying on the Commission’s order and states the reasons why, in good faith, it could not file the report, schedule or form on a timely basis.

Proxy Solicitation Materials and Information Statements

The order also conditionally exempts issuers from the requirement to furnish proxy statements, annual reports and other soliciting materials, and information statements and annual reports to a security holder, provided:

  • the security holder has a mailing address located in a zip code where the postal service has suspended mail service of the type or class of mail customarily used by the issuer;
  • the issuer has followed normal procedure when furnishing solicitation or information materials to the security holder in accordance with applicable rules; and
  • if requested by the security holder, the issuer provides the solicitation or information materials by a means reasonably designed to furnish the materials to the security holder.

Any issuer or other person unable to meet a deadline, including any shareholder who is unable to meet a deadline applicable to a shareholder proposal, or delivery obligation as a result of Hurricane Sandy or who is in need of other assistance related to public filings, can also call or email CorpFin.

Auditor Independence and Reconstruction of Accounting Records

In addition, the order conditionally exempts independent certified public accountants that are engaged to provide audit services for an issuer from Exchange Act rules and requirements that prohibit auditors from providing bookkeeping or other services related to the accounting records of an audit client, provided that any such services are:

  • limited to reconstruction of previously existing accounting records that were lost or destroyed as a result of Hurricane Sandy and cease as soon as the lost or destroyed records are reconstructed, financial systems are fully operational and the issuer can effect an orderly and efficient transition to management or other service provider; and
  • subject to pre-approval by the issuer’s audit committee.

Filing Date Adjustments

The Commission also announced that it will take the following positions regarding filing dates:

For purposes of eligibility to use Form S-3 (as well as well-known seasoned issuer status) for an issuer relying on the Commission’s order, any of that issuer’s Exchange Act reports that would have been required to be filed during the period from October 29, 2012 to November 20, 2012 will be due by November 21, 2012. Such an issuer will, therefore, be considered:

  • current in its Exchange Act reports prior to November 21, 2012 if it was current in its Exchange Act reports as of October 28, 2012;
  • current in its Exchange Act reports as of November 21, 2012 if it was current in its Exchange Act reports as of October 28, 2012 and it has made any filings required during the period from October 29, 2012 to November 20, 2012;
  • timely in its Exchange Act reports prior to November 21, 2012 if it was timely in its Exchange Act reports as of Oct. 28, 2012; and
  • timely in its Exchange Act reports as of November 21, 2012 if it was timely in its Exchange Act reports as of October 28, 2012 and it has made any filings required during the period from October 29, 2012 to November 20, 2012 on or before November 21, 2012.

For purposes of eligibility to use Form S-8 and the current public information eligibility requirements of Rule 144(c), an issuer relying on the Commission’s order will be considered:

  • current in its Exchange Act reports prior to November 21, 2012 if it was current in its Exchange Act reports as of October 28, 2012; and
  • current in its Exchange Act reports as of November 21, 2012 if it was current in its Exchange Act reports as of October 28, 2012 and it has made any filings required during the period from October 29, 2012 to November 20, 2012.

Notification of Late Filing on Form 12b-25

Issuers that receive an extension on filing Exchange Act annual reports or quarterly reports pursuant to the Commission’s order will be considered to have a due date of November 21, 2012 for those reports for purposes of Exchange Act Rule 12b-25. As such, those issuers will be permitted to rely on Rule 12b-25 where they are unable to file the required reports on or before November 21, 2012.

Investment Companies, Transfer Agents and Other Persons

The Commission’s order and announcement also detail certain conditional exemptions and filing date adjustments for transfer agents, investment companies and others, which are not addressed here.

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