The SEC cuts some slack for financial advisors slammed by Hurricane Sandy. How will the rules affect your financial services?
The devastation caused by Hurricane Sandy has created a logistical nightmare for financial advisors and other financial service providers required to file reports and statements in keeping with federal securities laws. Today the U.S. Securities and Exchange Commission, the federal agency charged with ensuring fair and orderly financial markets, extended some disaster relief to financial advisors and a broad class of companies impacted by the devastating storm.
The SEC has issued conditional exemptions to financial advisors, as well as publicly traded companies, investment companies, accountants, transfer agents and other financial service providers affected by the hurricane. The companies and individuals may have lost power, property, mail delivery service or transportation due to the Sandy, and the disruptions may make it nigh impossible to comply with reporting rules.
The SEC order announced today conditionally exempts these parties from certain reporting requirements in an effort “to address compliance issues caused by Hurricane Sandy and its aftermath,” according to a statement from the agency.
What do the new orders mean for investors? Shareholders may face a delay in receiving annual and semi-annual reports that registered investment companies are required to file under the Investment Company Act. The SEC is conditionally exempting reports for the period from Oct. 29, 2012 to Nov. 20, 2012. Conditional exemptions may also apply to the delivery of proxy and information statements to residents in affected areas, according to the SEC.
What do the changes mean for registered investment advisors, who must comply with the Investment Advisers Act? Advisors prevented by Hurricane Sandy from meeting Form ADV filing deadlines from Oct. 29 to Nov. 20 will receive an extension to Nov. 21. Registered investment advisors serving clients in areas with suspended mail service as a result of Hurricane Sandy will be conditionally exempted from sending these clients required written disclosure statements for the period from Oct. 29 to Nov. 20 until Nov. 21 or until mail service is restored.
The SEC has also offered conditional exemptions for reporting requirements imposed by the Exchange and Securities acts. The agency may also address compliance issues on a case-by-case basis for companies and individuals who need additional help complying with federal securities law. Click here for more details on the SEC exemptions for financial advisors and other financial service providers.