Document ID: SEC-2020-0445-0001
Agency: sec
Document Type: Notice
Title: Order Granting Exemptions from Specified Provisions of the Exchange Act and Certain Rules Thereunder
Posted Date: 2020-03-26T04:00Z

[Federal Register Volume 85, Number 59 (Thursday, March 26, 2020)]
[Notices]
[Pages 17122-17123]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-06292]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88448/March 20, 2020]

Order Under Section 17A and Section 36 of the Securities Exchange 
Act of 1934 Granting Exemptions From Specified Provisions of the 
Exchange Act and Certain Rules Thereunder

    The Commission understands from transfer agents and their 
representatives, as well as other persons, that COVID-19 may present 
challenges in timely meeting certain of their obligations under the 
federal securities laws. In light of this, we are issuing this Order to 
address the currently anticipated needs of transfer agents (and of 
other persons with regard to Exchange Act section 17(f)(2) and Rule 
17f-2), that have been directly or indirectly affected by COVID-19.
    Section 36 of the Exchange Act authorizes the Commission, by rule, 
regulation or order, to exempt, either conditionally or 
unconditionally, any person, security or transaction, or any class or 
classes of persons, securities or transactions, from any provision or 
provisions of the Exchange Act or any rule or regulation thereunder, to 
the extent that such exemption is necessary or appropriate in the 
public interest, and is consistent with the protection of investors.
    Section 17A(c)(1) of the Exchange Act provides that the appropriate 
regulatory agency, by rule or by order, upon its own motion or upon 
application, may conditionally or unconditionally exempt any person or 
security or class of persons or securities from any provision of 
Section 17A or any rule or regulation prescribed under Section 17A, if 
the appropriate regulatory agency \1\ finds that such exemption is in 
the public interest and consistent with the protection of investors and 
the purposes of Section 17A, including the prompt and accurate 
clearance and settlement of securities transactions and the 
safeguarding of securities and funds.
---------------------------------------------------------------------------

    \1\ Section 3(a)(34)(B) of the Exchange Act defines 
``appropriate regulatory authority.''
---------------------------------------------------------------------------

    Transfer agents and other persons who are unable to meet a deadline 
as extended by this relief, or in need of additional assistance, should 
contact the Division of Trading and Markets at (202) 551-5777 or 
tradingandmarkets@sec.gov.

I. Time Period for the Relief

    The time period for the relief specified in Section II of this 
Order is as follows:
     With respect to those transfer agents and other persons 
impacted by COVID-19, the period from and including March 16, 2020, to 
May 30, 2020.
     The Commission may extend the time period during which 
this relief applies, with any additional conditions the Commission 
deems appropriate.

II. Compliance With Sections 17A and 17(f) of the Exchange Act

    Exchange Act Section 17A and Section 17(f), as well as the rules 
promulgated under Sections 17A and 17(f), contain requirements for 
registered transfer agents and other regulated persons relating to, 
among other things, processing securities transfers, safekeeping of 
investor and issuer funds and securities and maintaining records of 
investor ownership. As a result of issues related to COVID-19, 
registered transfer agents and other persons directly affected by 
COVID-19 may have difficulty complying with some or all of their 
regulatory obligations. In addition, registered transfer agents 
indirectly affected by COVID-19 may be unable to conduct business with 
entities or security holders who themselves have been directly or 
indirectly affected, thereby making it difficult to process securities 
transactions and corporate actions in conformance with Section 17A, 
Section 17(f) and the rules thereunder.
    While the national clearance and settlement system continues to 
operate well in light of these challenges, the Commission recognizes 
that the need to comply with Section 17A and Section 17(f) of the 
Exchange Act, as well as the rules promulgated thereunder, may present 
compliance issues for those affected by COVID-19. Therefore, the 
Commission is using its authority under Section 17A and Section 36 of 
the Exchange Act to provide temporary relief from certain regulatory 
provisions. This Order temporarily exempts: (1) Transfer agents from 
the requirements of Sections 17A and 17(f)(1) of the Exchange Act, as 
well as Rules 17Ad-1 through 17Ad-11, 17Ad-13 through 17Ad-20, and 17f-
1 thereunder (the ``Transfer Agent Exempted Provisions''); and (2) 
transfer agents and other persons subject to such requirements, from 
the requirements of Section 17(f)(2) of the Exchange Act and Rule 17f-2 
thereunder (the ``Fingerprinting Exempted Provisions'') (collectively, 
the Transfer Agent Exempted Provisions and Fingerprinting Exempted 
Provisions are the ``Exempted Provisions''). The Commission finds the 
following exemption to be in the public interest and consistent with 
the protection of investors and the purpose of Section 17A of the 
Exchange Act, including the prompt and accurate clearance and 
settlement of securities transactions and the safeguarding of 
securities and funds.
    Accordingly, it is ordered, pursuant to Sections 17A and 36 of the 
Exchange Act, that any registered transfer agent that is unable to 
comply with any or all of the Exempted Provisions, as applicable, due 
to COVID-19, as well as any other person subject to the Fingerprinting 
Exempted Provisions, is hereby temporarily exempted from complying with 
such provisions for the period from and including March 16, 2020 to May 
30, 2020 where the conditions below are satisfied.

Conditions

    (a) A registrant or other person relying on this Order must provide 
written notification to the Commission by May 30, 2020 of the 
following:
    (1) The registrant or other person is relying on this Order;
    (2) A description of the specific Exempted Provisions the 
registrant or other person is unable to comply with and a statement of 
the reasons why, in good faith, the registrant or other person

[[Page 17123]]

is unable to comply with such Exempted Provisions; and
    (3) If a transfer agent knows or believes that it has been unable 
to maintain the books and records it is required to maintain pursuant 
to Section 17A and the rules thereunder, a complete and accurate 
description of the type of books and records that were not maintained, 
the names of the issuers for whom such books and records were not 
maintained, the extent of the failure to maintain such books and 
records, and the steps taken to ameliorate any such failure to maintain 
such books and records.
    (b) The Exempted Provisions do not include, and this order does not 
provide relief from, Rule 17Ad-12 under the Exchange Act. Transfer 
agents affected by COVID-19 that have custody or possession of any 
security holder or issuer funds or securities shall continue to comply 
with the requirements of Rule 17Ad-12 under the Exchange Act. If a 
transfer agent's operations, facilities, or systems are significantly 
affected as a result of COVID-19 such that the transfer agent believes 
its compliance with Rule 17Ad-12 could be negatively affected, to the 
extent possible, all security holder or issuer funds that remain in the 
custody of the transfer agent should be maintained in a separate bank 
account held for the exclusive benefit of security holders until such 
funds are properly processed, transferred, or remitted.
    The notification required under (a) above shall be emailed to: 
tradingandmarkets@sec.gov.
    The Commission encourages registered transfer agents and the 
issuers for whom they act to inform affected security holders whom they 
should contact concerning their accounts, their access to funds or 
securities, and other shareholder concerns. If feasible, issuers and 
their transfer agents should place a notice on their websites or 
provide toll free numbers to respond to inquiries.

    By the Commission.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-06292 Filed 3-25-20; 8:45 am]
 BILLING CODE 8011-01-P