SEC Approves Regulatory Relief and Assistance for Hurricane Katrina Victims

FOR IMMEDIATE RELEASE
2005-132

Washington, D.C., Sept. 15, 2005 — The Securities and Exchange Commission today issued an order providing emergency regulatory relief to investors, companies, and securities firms affected by Hurricane Katrina.

“Every individual affected by Katrina should know that Uncle Sam is working to help them get access to their savings,” said SEC Chairman Christopher Cox. “The SEC has reached out in the disaster areas to every public company and every investment adviser, in order to solve problems, eliminate regulatory hurdles, and help re-connect them with their customers.”

The storm and its aftermath have resulted in a lack of communications, facilities, and available staff and professional advisors that could hamper the efforts of public companies and other persons in the affected areas in their compliance with filing deadlines. In addition, the conditions in the areas affected by Hurricane Katrina, including displacement of hundreds of thousands of individuals and the destruction of property, have prevented and will continue to prevent the delivery of mail to the region.

To address compliance issues caused by Hurricane Katrina and its aftermath, the order conditionally exempts affected persons from the requirements of the federal securities laws with regard to the following:

• Exchange Act filing requirements for the period from and including Aug. 29, 2005 to Oct. 14, 2005;
   
• Proxy and information statement delivery requirements for companies or other persons attempting to deliver materials to affected areas;
   
• Investment Company Act requirements for the transmittal to shareholders in affected areas of the annual and semi-annual reports of registered investment companies for a 90-day period;
   
• Transfer Agent compliance with Sections 17A and 17(f) of the Exchange Act; and
   
• Auditor independence requirements as they relate to auditors performing bookkeeping services for audit clients.

In addition, the Commission has directed the staff to take the following positions under the Exchange Act, the Securities Act and the Investment Advisers Act with regard to issues that may arise commonly for companies and other persons attempting to comply with their obligations under the federal securities laws.

• For purposes of the Form S-2 and Form S-3 eligibility (as well as well-known seasoned issuer status, which is based in part on Form S-3 eligibility) of a company relying on the exemptive order, any of that company’s Exchange Act reports that would have been required to be filed during the period from and including August 29, 2005 to October 14, 2005 will be considered to have a due date of October 17, 2005. Such a company will, therefore, be considered:
   
  • current in its Exchange Act reports prior to October 17, 2005 if it was current in its Exchange Act reports as of August 28, 2005; and
     
  • current in its Exchange Act reports as of October 17, 2005 if it was current in its Exchange Act reports as of August 28, 2005 and it has made any filings required during the period from and including August 29, 2005 to October 14, 2005;
     
  • timely in its Exchange Act reports prior to October 17, 2005 if it was timely in its Exchange Act reports as of August 28, 2005; and
     
  • timely in its Exchange Act reports as of October 17, 2005 if it was timely in its Exchange Act reports as of August 28, 2005 and it has made any filings required during the period from and including August 29, 2005 to October 14, 2005 on or before October 17, 2005.
     
• For purposes of the Form S-8 eligibility requirements and the current public information eligibility requirements of Rule 144(c), a company relying on the exemptive order will be considered<
   
  • current in its Exchange Act reports prior to October 17, 2005 if it was current in its Exchange Act reports as of August 28, 2005; and
     
  • current in its Exchange Act reports as of October 17, 2005 if it was current in its Exchange Act reports as of August 28, 2005 and it has made any filings required during the period from and including August 29, 2005 to October 14, 2005.
     
• Companies that are provided extended due dates for Exchange Act annual reports or quarterly reports pursuant to the Order will be considered to have a due date of October 17, 2005 for those reports for purposes of Exchange Act Rule 12b-25. As such, those companies will be permitted to rely on Rule 12b-25 where they are unable to file the required reports on or before October 17, 2005.
   
• For a 90 calendar day period beginning on August 29, 2005, a registered open-end investment company and a registered unit investment trust, will be considered to have satisfied the requirements of Section 5(b)(2) of the Securities Act to deliver a statutory prospectus to an investor, provided that: (1) the sale of shares to the investor was not an initial purchase by the investor of shares of the company or unit investment trust; (2) the investor’s mailing address for delivery, as listed in the records of the company or unit investment trust, has a zip code for which the United States Postal Service has suspended mail service, as a result of Hurricane Katrina, of the type or class customarily used by the company or unit investment trust, to deliver statutory prospectuses; and (3) the company, or unit investment trust, or other person promptly delivers the statutory prospectus (a) if requested by the investor, or (b) at the earlier of the end of the 90-day period or the resumption of the applicable mail service.
   
• For a 90 calendar day period beginning on August 29, 2005, a registered investment adviser will be considered to have satisfied the requirements of Section 204 of the Advisers Act and Rule 204-3(c) thereunder to deliver the written disclosure statement required thereunder to its advisory client, provided that: (1) the client’s mailing address for delivery, as listed in the records of the investment adviser, has a zip code for which the United States Postal Service has suspended mail service, as a result of Hurricane Katrina, of the type or class customarily used by the adviser to deliver written disclosure statements; and (2) the investment adviser or other person promptly delivers the written disclosure statement (a) if requested by the client or (b) at the earlier of the end of the 90-day period or the resumption of the applicable mail service.

The relief that the Commission is providing today is structured to address the needs of the broadest class of companies and other affected persons. The Commission is aware that some companies and other affected persons will require additional or different assistance in their efforts to comply with the requirements of the federal securities laws. In this regard, the Commission realizes that in a limited number of cases, companies may have difficulty completing their audits or complying with the internal control requirements adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. Commission staff will address these and any disclosure-related issues on a case-by-case basis in light of their fact-specific nature.

Any companies, transfer agents, registered investment companies, registered investment advisers, security holders, or other persons requiring additional assistance are encouraged to contact Commission staff for individual relief or interpretive guidance. For this purpose, the Commission has established both telephone and e-mail hotlines to provide immediate responses to questions or to hear from those that want to advise the Commission of their needs.

• Telephone calls should be directed to (202) 551-3300.
   
• E-mail should be directed to cfhotline@sec.gov.