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June 22, 2020

SEC Extends COVID-19 In-Person Meeting Relief for Registered Investment Companies

On June 19, 2020, the Securities and Exchange Commission (SEC) extended temporary exemptive relief from in-person voting requirements granted to registered management investment companies and business development companies (BDCs) through at least December 31, 2020. Citing the importance of the health and safety of all participants in the securities markets and the challenges of traveling in order to meet in-person voting requirements under the Investment Company Act of 1940, as amended (the 1940 Act) due to ongoing concerns about the impact of COVID-19, the SEC determined to extend its previously-granted relief.


On March 13, 2020, the SEC granted exemptive relief from certain provisions of and rules under the 1940 Act. The First March Order temporarily relieved boards of investment companies and BDCs from in-person voting requirements for all approvals and renewals of contracts, plans or arrangements under Section 15(c) (advisory and sub-advisory agreement approvals), Section 32(a) (approval of accountants), Rule 15a-4(b)(2) (interim advisory agreements) and Rule 12b-1 (distribution plans). A board relying on the order would be required to ratify any vote taken under the relief at the next in-person board meeting, including by a separate vote of the independent board members. The First March Order applied to meetings held through June 15, 2020. On March 25, 2020, the SEC issued the Second March Order, which extended the relief period to cover board meetings held through August 15, 2020.

Scope of Relief and Timing

The June 19, 2020 order supersedes the Second March Order to extend the period during which relief from the in-person board meeting requirement is available, extending the relief until a date specified in a public notice from the SEC, at least two weeks from the publication of the notice and no earlier than December 31, 2020. However, this June order is also important due to the relief it is not extending from the Second March Order. In addition to the relief from the in-person voting requirements, the Second March Order provided relief from certain requirements related to the filing of Forms N-CEN and N-PORT, the transmittal of annual and semi-annual reports to shareholders and the timing of filing of Form 23C-2. The June 19, 2020 order specifies that the relief with respect to these provisions is not being extended and will expire for Forms N-CEN and N-PORT and the transmittal of shareholder reports on June 30, 2020 and for Form 23C-2 on August 15, 2020, each as stated in the Second March Order.

Practice Points

The SEC’s order of June 19, 2020 recognizes the preeminent concern regarding the health and safety of those involved in board meetings and the decision-making process. In order to comply with the conditions of the relief granted by the order, fund boards are encouraged to take the following steps when making an approval covered by the orders.

  • At each board meeting where approvals covered by the orders are being requested, the board should determine that reliance on the orders is necessary or appropriate in light of the circumstances related to the current or potential effects of COVID-19.
  • The fund should maintain a list or catalog of the resolutions passed that are covered by the exemptive relief from the in-person approval requirement so that the ratification of these resolutions can be made at the in-person meeting following the decision to cease reliance on the exemptive relief. With the potential for fund boards to hold all four quarterly meetings in calendar 2020 in reliance upon no-action or exemptive relief from the in-person voting requirement and the indefinite nature of the June 19, 2020 order, a full four quarters’ resolutions may need to be ratified.

Faegre Drinker’s Coronavirus Resource Center is available to help you understand and assess the legal, regulatory and commercial implications of COVID-19.

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