The SEC has provided deadline relief for private fund managers unable to deliver audited financial statements by April 29 as a result of the coronavirus pandemic. The Investment Advisers Association reports that the staff will allow firms to miss the 120-day delivery deadline if the firm “reasonably believes” that the financial statements would have been distributed on time but failed due to “unforeseen circumstances.” The SEC also provided relief allowing more time to return received securities from a client per the custody rule. Additionally, firms need not amend Form ADV to list temporary teleworking addresses as firm offices.
Private fund managers should deliver financials on time if possible. If not, we recommend documenting (e.g. written notice from the auditor) that it could not deliver the financial statements. We also recommend notifying clients either directly or through website disclosure.