Regulatory Good Day/Bad Day: SEC offers some COVID-19 reliefs and pays whistleblower

The Securities and Exchange Commission (SEC) was in a giving mood. The Commission announced it would provide conditional regulatory relief for registered transfer agents and discrete others.

Is the SEC COVID-19 compassionate?

Yes. The Commission acknowledges that the impacts of COVID-19 may present challenges for transfer agents and other persons affected either directly or indirectly by COVID-19. To address these challenges, the SEC has issued an order that, subject to certain conditions, will provide exemptive relief for certain regulatory obligations under the federal securities laws through May 30, 2020. 

This is not blanket relief as these professionals will continue to be subject to the requirements of Exchange Act Rule 17Ad-12, which requires transfer agents to ensure that they adequately safeguard securities and funds in their possession or custody.

How-to qualify for regulatory relief?

The SEC says that those interested in taking advantage of the relief must provide written notification to the Commission. The communication must include a description of the specific regulatory obligations with which an agent cannot comply and an explanation of why compliance is not possible.

“The relief provided by this Order, says Brett Redfearn, Director of the SEC’s Division of Trading and Markets, “reflects the continued focus of the SEC and the Division of Trading and Markets on monitoring the effects of COVID-19 on regulated entities, financial professionals, and other market participants…This temporary relief recognizes that circumstances related to COVID-19 may prevent [timely compliance].”

And then, there is the $1.6 million whistleblower award

The Commission awarded more than $1.6 million to a whistleblower whose information tipped the agency to securities law violations and helped form part of the basis for charges brought in a successful enforcement action. 

“The violations would have been difficult to detect without the whistleblower’s information and assistance,” says Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “This matter highlights the importance of the SEC’s whistleblower program to the agency’s enforcement efforts and to its ability to maximize staff resources.”

With all this good news, what about compliance?

It still matters. Especially for companies hoping not to end up like the company investigated thanks to the whistleblower. That’s where Patrina comes in. For more than 25 years, Patrina has been helping uniquely committed compliance professionals like you to stay on the “straight and narrow” efficiently and cost-effectively. So, let’s talk. Call 212-233-1155 to ask about Patrina’s cost-effective, designated third-party services, our comprehensive 8-module compliance solution, and compliant data capture & file archiving, and records archiving specifically designed for the financial services community. Be smart. Be covered.Let’s talk.