Understanding the Regulatory Impact of COVID-19


The COVID-19 pandemic has brought unprecedented circumstances to the financial services industry and the world around us.

Amy Lynch, CEO of FrontLine Compliance, joined the Human Capital Podcast on March 20 to provide insight on the regulatory impact of the pandemic, emergency relief measures and recent guidance  including Form ADV extensions, Fund Board meetings, Business Continuity Plans, and virtual exams.

Here are some key points from the podcast:

  • The SEC issued an order providing Investment Advisers whose operations are disrupted by COVID-19 with filing extensions for Form ADV. Lynch highlighted that this extension is not automatic. Firms must file and receive SEC approval to qualify for the extension of the March 30 deadline to April 30.

  • The SEC issued a no-action letter providing flexibility around Fund Board in-person meeting requirements, allowing meetings to be held in a virtual setting including phone or video conference through June 15 of this year.

  • SEC exams are still happening. If an exam started prior to the SEC home office’s telecommute policy, the exams are continuing, but remotely. Phone exam mode means the timelines may be extended. It also means SEC examiners will have a harder time getting a feel for the culture of a firm than when conducting an exam on site.

  • The bottom line is firms should be following their Business Continuity Plans right now. Firms can likely expect new and updated rules on Business Continuity Plans, and regulators will likely be looking at how a firm’s BCP held up in practice during exams in the future.

A summary of the SEC’s evolving actions on the COVID-19 crisis can be found here.

A summary of FINRA’s response to COVID-19 can be found here.

Listen to the full ThinkAdvisor Human Capital podcast, “FrontLine Compliance’s Lynch Details Regulatory Relief in Light of Coronavirus” March 20, 2020 here.

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