SEC provides ‘conditional’ disclosure relief for firms hit by coronavirus

By Katanga Johnson

WASHINGTON (Reuters) – Companies affected by the coronavirus outbreak can apply for more time to file financial disclosures normally due between March 1 and April 30, the U.S. Securities and Exchange Commission (SEC) said on Wednesday.

Companies affected by the health crisis can seek a delay of 45 days to file certain disclosures, including quarterly reports, but must explain why the relief is needed, the agency said.

While companies may secure more time to make any disclosures, directors and officers should refrain from buying and selling stock until investors have been appropriately informed about any relevant risk, the agency said.

Known and unknown impact on earnings and supply chains, as well as other business matters, are likely to be material for some companies and require disclosure.

The SEC said it would also consider providing additional extensions, if necessary.

The fast-spreading coronavirus has killed more than 3,000 people and sickened least 0,000, mostly in China. Investors fear the epidemic could derail the longest U.S. economic expansion in history through disruptions to supply chains and exports.

SEC Chairman Jay Clayton urged all U.S.-listed companies to disclose risks stemming from coronavirus under regular filing conditions if material to investors, even if the companies plan to take advantage of disclosure extensions.

“I urge companies to work with their audit committees and auditors to ensure that their financial reporting, auditing and review processes are as robust as practicable in light of the circumstances in meeting the applicable requirements,” Clayton added.

Reuters reported in February that auditors for New York-listed Chinese companies will likely struggle to complete their work by stock exchange deadlines because of bans and other restrictions designed to limit the spread of the new coronavirus.

Later that month, the SEC and its accounting oversight arm, the Public Company Accounting Oversight Board, said it was the Big Four accountancy firms to ramp up internal controls on audits of U.S.-listed Chinese companies, especially in light of growing business risks due to the outbreak.

Top U.S. regulators were likely to discuss the impact of the coronavirus at the Financial Stability Oversight Council’s deputy-level meeting on Wednesday.

(Reporting by Katanga Johnson; Editing by Paul Simao, Jonathan Oatis and Sonya Hepinstall)



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