Regulation A and Crowdfunding Issuers granted SEC Extensions
The SEC recently granted issuers using Regulation A and Regulation Crowdfunding known as Regulation CF have been granted extensions to their SEC reporting obligations. Last month, the SEC published new temporary final rules extending the due dates for certain ongoing SEC reporting requirements imposed by Regulation Crowdfunding also known as Regulation CF and Regulation A under the Securities Act of 1933 (the “Securities Act”). The SEC’s rules were created due to potential disruptions of COVID-19 which could prevent issuers and other filers from complying with their SEC filing deadlines.
An issuer may only rely on the SEC’ extended due dates if its failure to comply with the original due date relates to circumstances arising from COVID-19. The SEC’s new temporary rule does not relieve issuers from their obligation to evaluate and comply with their obligations to make true and complete disclosures to investors under federal securities laws.
Extended Due Dates to Comply with SEC Reporting Requirements
The SEC extended the filing deadlines for certain ongoing SEC reports for Regulation Crowdfunding and Regulation A issuers from March 26, 2020 through May 31, 2020.
Conditions to the Extension of SEC Reporting Requirements
The SEC rules require the following conditions:
- The issuer must be unable to comply with a filing due date because of COVID-19;
- A Regulation Crowdfunding issuer must promptly provide direct notification to its investors or provide notice through a crowdfunding intermediary’s platform that it is relying on the SEC’s temporary rule or, or a Regulation A issuer must promptly disclose that is relying upon the SEC’s temporary rules on its website.
- No later than 45 days after the original filing deadline of the report or filing, the issuer must submit the report or filing required for the period from and including March 26, 2020 to May 31, 2020; and
- In any such report or form, the issuer must disclose that it is relying on the SEC’s temporary rule and provide the reasons why it could not submit the report or filing on a timely basis.
Regulation A Reports and Filings Eligible for the Extension to SEC Reporting Requirements
The SEC’s temporary final rules grant extended deadlines for certain reports and filings required by Regulation A during the period from and including March 26, 2020 to May 31, 2020,:
- Post-qualification amendments required at least every 12 months after the qualification date to include updated financial statements;
- Form 1-K Annual Reports;
- Semi-annual reports on Form 1-SA Annual Reports;
- Form 1-K or 1-SA Special Reports;
- Form 1-U Current reports; and
- Form 1-Z Exit Reports.
The SEC’s temporary final rules are not available to a Form 1-A Offering Circular that has not been qualified.
Regulation Crowdfunding Filings Eligible for the Extension to SEC Reporting Requirements
The SEC’s temporary final rules for Regulation Crowdfunding do not extend due dates for Form C or Form C/A. The final rules grant extended deadlines for the following reports and filings required by Regulation Crowdfunding during the period from and including March 26, 2020 to May 31, 2020:
- Form C-AR Annual Reports;
- Form C-U Reports; and
- Form C-TR Termination of Reporting
Hamilton & Associates Law Group, P.A. is providing guidance to help its clients identify and understand issues arising from COVID-19 Disclosure Requirements, address COVID-19’s potential effects on their businesses, and identify resources available to private and public companies that have been harmed by COVID-19.
This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship.