On March 25, 2020, the SEC issued exemptive orders replacing prior orders granting temporary relief from certain provisions of the Investment Advisers Act of 1940 (the “Advisers Act”) and the Investment Company Act of 1940 (the “1940 Act”). The SEC said that it has been monitoring developments related to the effect that COVID-19 and related remote work environments have had on the asset management industry. The new orders therefore generally extend previously granted relief by two months and eliminate certain conditions of the prior orders.
For the period beginning on March 13, 2020 and extending until August 15, 2020, a registered fund or a business development company (BDC), and any investment adviser of or principal underwriter for that fund or BDC, are exempt from the in-person voting requirements related to approval or renewal of investment advisory and sub-advisory agreements, approval of a fund or BDC’s independent auditor, or approval of distribution agreements and Rule 12b-1 plans, provided that:
The SEC also said that registered funds that are otherwise required to file Form N-CEN pursuant to Rule 30a-1 under the 1940 Act or Form N-PORT pursuant to Rule 30b1-9 under the 1940 Act—in cases where the original due date of such filings is on or after March 13, 2020 but on or prior to June 30, 2020—are temporarily exempt from such form-filing requirements provided that:
The revised order also clarifies that registered funds, including unit investment trusts (UITs) that otherwise would be required to transmit annual and semi-annual reports to investors during the time period from March 13, 2020 until June 30, 2020 can delay such transmission under the following conditions:
The SEC also provided temporary relief from the requirement that closed-end funds and BDCs (“Companies”) file with the SEC a notice of intention to call or redeem securities at least 30 days in advance. Such Companies may file a Form N-23C-2 with the SEC fewer than 30 days prior to, including the same business day as, a Company’s call or redemption of securities of which it is the issuer provided that the Company meets the following conditions:
Finally, the SEC granted relief exempting a registered fund that is otherwise required to deliver the fund’s current prospectus to investors (other than in the case of an initial purchase of shares) during the period from March 25, 2020 until June 30, 2020 from such delivery obligation under the following conditions:
In light of the rapidly changing circumstances in which such funds find themselves, the SEC will no longer require a fund relying on this relief to include, in its email correspondence to SEC staff and on its website, a description of the reasons why it or any other person could not deliver the prospectus to investors on a timely basis, or to provide the SEC staff with an estimated date by which it expects the prospectus to be delivered.
The SEC extended previously granted exemptions to registered investment advisers and exempt reporting advisers that are unable to meet certain filing deadlines or delivery requirements due to circumstances related to current or potential effects of COVID-19, and that are otherwise obligated to make their filings or deliver certain documents during the period beginning on March 13, 2020 and ending June 30, 2020. Specifically, such exemptions are granted to:
These exemptions apply only to advisers that meet the following conditions:
An adviser relying on the Advisers Act relief must file its Form ADV or Form PF, as applicable, and deliver the brochure (or summary of material changes) and brochure supplement as soon as practicable, but no later than 45 days after the original due date.