In response to widespread disruptions and difficulties caused by the recent COVID-19 outbreak and the significant impact on financial markets, federal regulatory authorities (including the Securities and Exchange Commission (SEC)), have closely coordinating in order to provide much-needed guidance and temporary relief to those affected by COVID-19. 

Most notably, this includes the SEC’s March 4, 2020 order granting a 45-day filing extension for publicly traded companies as it pertains to certain disclosure reports, as well as a March 13, 2020 order providing further relief permitting virtual board meetings and conditional relief from certain filing and delivery requirements for certain investment funds and investment advisors.

These deadlines were further broadened and extended on March 25, 2020, with the deadlines for disclosure reports otherwise due between March 1 and April 30, extended to include July 1, 2020. A complete list of regulatory assistance and relief can be found here.

Following the federal government’s lead, many state financial regulatory authorities across New England (including Maine, Rhode Island, and Massachusetts) have implemented similar temporary relief in the wake of the expanding COVID-19 pandemic.  This includes:

Maine: On March 25, 2020, the Maine Securities Administrator (Maine Department of Professional and Financial Regulation – Office of Securities) issued an order providing temporary regulatory relief for the financial industry to “help eliminate regulatory obstacles and barriers” that some in the financial services industry may be facing as a result of the COVID-19 pandemic. This includes: 

• Allowing out-of-state financial professionals who are displaced due to the pandemic to temporarily operate in Maine to service existing clients if they meet certain conditions

• Allowing an investment adviser that may no longer be able to service a client to transfer or reassign the client to another firm with the client's verbal consent

• Allowing investment advisory firms flexibility in the deadline to provide updated firm information annually to clients

• Suspending on-site training requirements for new licensees and the requirement that broker-dealer firms conduct on-site audits of branch offices located in Maine

• Waiving late fees for issuers of securities who miss a filing deadline because of the pandemic, and permitting filing by email

Please click here for a copy of the Order from the Maine Office of Securities.

Rhode Island:  The Department of Business Regulation (Securities Division) has also issued an order (Securities Bulletin No. 2020-1) providing temporary relief for “financial professionals” (i.e., broker-dealers, investment advisers, and their registered agents) affected by the COVID-19 outbreak.  This includes:

• Registration or filing relief including a temporary exemption from registration and filing requirements of the Rhode Island Uniform Securities Act (RIUSA) in certain circumstances including, but not limited to, (1) activities for which registration or filing with the Securities Division as a “financial professional” would be required; (2) opening and maintaining a temporary branch office or office of supervisory jurisdiction in Rhode Island that was not in operation as of March 1, 2020; and (3) relief from maintaining an updated Form U4 for any firm that opens a temporary branch office. These exemptions are available in the following circumstances:

  • The financial professional is working from a location outside of the jurisdiction in which they are currently registered

  • The financial professional was properly registered and/or notice filed with all required securities regulators and self-regulatory organizations as of March 1, 2020

  • The financial professional is not currently the subject of an ongoing enforcement proceeding (in any jurisdiction

  • The financial professional limits activities to existing customers or clients and does not solicit new customers or clients in or from Rhode Island

• Relief from the requirement of obtaining a physical signature on Forms U4 in a timely manner and will accept Forms U4 electronically without physical signatures provided the submitting firm: (a) provides the individual with a copy of the completed Form U4 prior to filing; (b) obtains the individual’s written agreement prior to filing that the form’s content is accurate and complete; (c) retains the written acknowledgment in accordance with Rhode Island’s laws and regulations; and (d) obtains the applicant’s physical signature as soon as practicable.

• Relief from annual update filings and document delivery requirements by state-registered investment advisors (including Forms ADV) including a filing extension of up to 45 days for any of the Form ADV filing, updating and customer delivery requirements set forth by RIUSA.  

• Note:  The Securities Division stressed that financial professionals who rely on any provision of this order must keep a copy in their records to document their reliance on it and that “any activities that do not meet the conditions outlined above may be treated by the Division as non-exempt and may constitute unregistered securities activity subject to state enforcement action.”

Please click here for a copy of the complete order from the Rhode Island Department of Business Regulation, Securities Division.

Massachusetts:  On March 24, 2020, the Massachusetts Securities Division issued an Emergency Order granting temporary relief from manual signature and notarization requirements in corporate finance filings (i.e., securities registration applications, exemption filings, securities notice filings, and consent to service of process forms and related corporate resolutions), noting that electronic signatures, PDF copies of signed documents, or “any recognized means of showing that a documents is signed” will suffice.  In addition, the Division has also granted temporary relief for registered financial professionals, including:

• Relief from the requirement of obtaining a physical signature on Forms U4 in a timely manner (as required by FINRA rules and similar provisions of the Massachusetts Uniform Securities Act (MUSA)) and will accept Forms U4 electronically without physical signatures as long as the submitting firm: (a) provides the individual with a copy of the completed Form U4 prior to filing; (b) obtains the individual’s written agreement prior to filing that the form’s content is accurate and complete; (c) retains the written acknowledgment in accordance with Massachusetts laws and regulations; and (d) obtains the applicant’s physical signature as soon as practicable.

• Relief from the requirement to submit a notarized Criminal Offender Record Information (CORI) form in connection with an application for registration by filing and allowing applicants to instead submit an affidavit stating they have: (a) submitted all components of the application in accordance with Massachusetts laws/regulations other than a notarized CORI form; and (b) within 10 days after the end of the Order (which shall remain in effect until April 30, 2020), will submit a notarized CORI form to the Division.

• Relief from annual update filings and document delivery requirements by state-registered investment advisors (including Forms ADV) including a filing extension of up to 45 days for any of the Form ADV filing, updating and customer delivery requirements set forth by MUSA.

• Note:  The Securities Division stressed that financial professionals who rely on any provision of this order must keep a copy in their records to document their reliance on it and that “any activities that do not meet the conditions outlined above may be treated by the Division as non-exempt and may constitute unregistered securities activity subject to state enforcement action.”

Please click here for the complete Massachusetts Order.