The SEC is granting investment advisors modest regulatory relief amid the ongoing response to the coronavirus pandemic — at the same time warning that this is no time to get complacent about compliance.
The commission has extended the filing deadline for advisors affected by the coronavirus to submit updates to their ADV and PF forms within 45 days, but cautions that firms that choose to delay their filings must promptly notify the commission and post an update on their websites.
The SEC acknowledges that the sweeping disruptions to work and travel that have taken shape since the onset of the pandemic "may limit investment advisors' access to facilities, personnel and third-party service providers," the SEC says in its
However, it cautions that advisors who plan to rely on the order to delay their filings must explain to the commission and their clients how the effects of COVID-19 prevented them from submitting their forms on time, and to provide an estimated date for when they do plan to file. Those seeking to take advantage of the filing extension should notify the SEC via email at IARDLive@sec.gov.
The SEC is also
"Investment funds and advisors are at the forefront of Main Street investor access to financial markets, and the Commission is monitoring closely the impacts of the coronavirus on investors and market participants," SEC Chairman Jay Clayton said in a statement announcing the regulatory relief package.
But just because the SEC is offering advisors a grace period to file amendments to their registration forms doesn't necessarily mean that firms should take advantage of it.
"The pandemic crisis does not give advisors a free pass to miss the filing deadline," Cipperman Compliance services cautioned in an email responding to the SEC's announcement. "Our recommendation is to file if you can."
Cipperman noted that firms whose fiscal and calendar years align should already be well on their way to preparing changes to their ADV forms, and that they can always submit corrections in the form of an amendment.
"If an advisor legitimately cannot file because it cannot obtain the necessary information, we recommend that the SEC and website disclosure include a well-presented rationale for delaying the filing," Cipperman says.
In the order announcing the filing relief, the commission also sought to "remind investment advisors who rely on this order to continue to evaluate their obligations, including their fiduciary duty, under the federal securities laws."
The SEC’s move is the latest in its multifaceted efforts to respond to the coronavirus, including broadly adopting telework for employees at its Washington, D.C. headquarters.
An SEC spokeswoman declined to comment on whether staffers are still actively visiting firms to conduct advisor examinations, but pointed to a passage on the
In its order, the commission also acknowledged that, given the uncertainty of how the coronavirus pandemic will play out, that it could grant an additional filing delay or take other steps to ease advisors' regulatory burden.
"The time period for any or all of the relief may, if necessary, be extended with any additional conditions that are deemed appropriate, and the commission may issue other relief as necessary or appropriate," the agency said.
