The Securities and Exchange Commission (SEC) recently approved the temporary relief proposed by both the Nasdaq Stock Market (NASDAQ) and the New York Stock Exchange (NYSE) relating to compliance with the minimum price and minimum market capitalization continued listing standards of each exchange. In short, the cure period for regaining compliance with these standards is tolled through June 30, 2020. Listed companies that either (1) were in a cure period at the time the temporary relief took effect or (2) receive a notice of noncompliance after the temporary relief took effect and, in either case, have not regained compliance by June 30, 2020, will have their cure period either restart or begin on July 1, 2020. However, note that listed companies that receive a notice of noncompliance during the relevant toll period will still have to issue a press release, file a Form 8-K with the SEC, and, for NYSE-listed companies, submit a compliance plan to the NYSE.

Continue Reading Update: NYSE and NASDAQ Receive Approval for Additional Temporary Relief from Continued Listing Standards During COVID-19 Pandemic

SEC Chairman’s Public Statements

On April 2, 2020, Securities and Exchange Commission (SEC) Chairman Jay Clayton issued public statements available here and here encouraging public companies to provide material information to investors as soon as practicable. The SEC chairman stated, “Our investors and our markets thirst for information as a general matter. This is particularly the case in times of economic shock and uncertainty. Couple this fundamental premise with the reality that for COVID-19-related reasons issuers may not be able to file required quarter-end reports on time, and we have a challenge.” He went on to remind companies that “an inability to file required reports does not prevent issuers from issuing earnings releases and filing current reports on Forms 8-K.”

SEC Chief Accountant’s Public Statement

On April 3, 2020, SEC Chief Accountant Sagar Teotia issued a public statement emphasizing the importance of high-quality financial reporting in light of the significant impacts of COVID-19, available here. He stated, “We recognize that the accounting and financial reporting implications of COVID-19 may require companies to make significant judgments and estimates. Certain judgments and estimates can be challenging in an environment of uncertainty. As we have stated for a number of years, [the Office of the Chief Accountant] has consistently not objected to well-reasoned judgments that entities have made, and we will continue to apply this perspective.”Continue Reading SEC Chairman Encourages Public Companies to Keep Investors Informed, SEC Chief Accountant Discusses COVID-19 Challenges