The SEC has also made several moves to extend deadlines related to the Investment Company Act, said Simon, including those for board meetings and certain filings.
More importantly for advisors, Simon said that the SEC is also suspending some enforcement surrounding the custody rule.
“This is a situation where advisors are working remotely and they may be unable to check on a daily basis what has been received at their home office in the mail,” said Simon. “The SEC has made clear that it does not consider advisors to have received client assets at their office location until their personnel are able to access the mail at that office location.”
The SEC has also eased –temporarily—some audit and reporting requirements around pooled investment vehicles, said Simon.
SEC staff are also taking a “no-action” position in regards to EDGAR filings requiring manual signatures, he said.
Simon said that the Covid-19 outbreak highlights the need for e-delivery of documents and reports to be the default for advisors moving forward. Currently, advisors are required to get client consent for e-delivery, which may be challenging amid the pandemic if consent has not already been given.
Since firm’s business continuity plans are “being stressed” by the shut downs, the SEC’s OCIE has told the IAA that it will not inquire about firm’s business continuity planning outside of the context of one of its eams.
“In future exams, you should all assume this is something that is going to be looked at more closely than before,” said Simon.