SEC Provides Relief Related to Mailing Adviser and Fund Documents to Clients in International Jurisdictions
June 25, 2020
The SEC’s Divisions of Investment Management and Trading and Markets have issued a statement providing no-action relief from failure to deliver certain international adviser and fund communications. The relief applies to clients – who have not consented to electronic delivery – who have international mailing addresses in jurisdictions where the U.S. Postal Service or other common carrier has temporarily suspended international mail service due to COVID-19. The relief will expire when the respective jurisdiction resumes mail delivery.
Mailings covered by this relief include:
- Annual and semi-annual reports to shareholders;
- Prospectuses and prospectus supplements;
- Form ADV brochures (or summary of material changes) and brochure supplements;
- Form CRS;
- Regulation Best Interest written disclosures;
- Written confirmations and alternative periodic reporting; and
- Written statements with respect to free credit balances.
The conditions for relief are that the adviser or other registrant:
- Is unable to mail the communication to clients in an affected jurisdiction due to mail service suspensions;
- Sends a notification by email to IM-EmergencyRelief@sec.gov(for the Division of Investment Management) or firstname.lastname@example.org (for the Division of Trading and Markets) identifying the specific types of mailings that it will be holding temporarily due to mail service suspensions, and updates the notification to reflect any material changes;
- Prominently publishes the information contained in the notification on its website and updates that information to reflect any material changes;
- Uses “reasonable best efforts” to deliver the documents electronically (g., sends them to an email address that it has a reasonable basis to believe is current, explains why it is delivering the documents electronically, and states that unless the client elects electronic delivery going forward it will physically mail the documents once the common carrier has resumed service; and if it does not have an email address or receives a bounce back or other indication that the contact information is not current, uses “reasonable best efforts” to obtain a current email address through commercially available resources;
- Maintains contemporaneous records reflecting its satisfaction of these steps; and
- Monitors the relevant common carrier websites regularly for updates regarding the status of mail delivery, and promptly (within seven days following resumption of mail service) sends the mailing if it was unable to deliver the mailing electronically or the client requests a paper copy.
Other conditions apply to written confirmations or alternative periodic reporting and written statements with respect to free credit balances.
TAGS: Coronavirus, COVID-19, Form ADV, Form CRS, Investment Company