By Domenick Pugliese and Rachael Schwartz As the outbreak of COVID-19 has spread internationally, it has impacted almost every facet of life in the United States. Financial markets too have been severely impacted with extreme levels of volatility and, for most broad market indices, the end of the recent long-running bull market. Registered investment companies such as mutual funds ("funds"), and the advisers who manage them, have also seen significant disruptions to many aspects of their businesses and operations. The Securities and Exchange Commission (the "Commission") has been proactive in providing relief to funds, fund boards and to investment advisers in a number of areas. Below we review some of the more significant regulatory-related initiatives implemented in the past few days by the Commission to relieve certain burdens on funds, boards and advisers. We also highlight certain questions or areas of focus which boards may wish to discuss with management in the upcoming weeks. Finally, as travel restrictions have taken wide-spread effect across the country, many boards will be looking to conduct their meetings by video or telephone conference in the coming months. We provide certain practical tips for boards and management to consider when converting the next in-person board meeting to a video or telephonic meeting. Regulatory Developments On March 13, 2020, the Commission issued an order (the "Emergency Order") providing funds, fund boards and advisers with temporary relief from certain requirement of the Investment Company Act. RELIEF RELATING TO THE IN-PERSON VOTING REQUIREMENT The Emergency Order provides that – until June 15, 2020—funds, boards and advisers will be exempt from the requirement that the following approvals must be done at an in-person meeting: Initial or annual continuance of the investment advisory (or sub-advisory) agreement or any material amendments thereto; Approval of the agreement with the principal underwriter; Approval of the auditors; Approval of 12b-1 plans or material amendments to 12b-1 plans; and Approval of interim investment advisory agreement caused by a change in control where the adviser or its controlling person receives money or other benefit. In order to take advantage of this relief, any such action must be taken at a telephonic meeting or video conference where all directors can hear each other simultaneously. At this meeting, the board must conclude that reliance on the Emergency Order is necessary or appropriate due to circumstances related to current or potential effects of COVID-19. Finally, any matters approved in reliance on the Emergency Order must be ratified at the next in-person meeting by the board, including by a majority of independent Trustees. RELIEF FROM FILING DEADLINES FOR FORM N-CEN AND N-PORT The Emergency Order provides that, with respect to funds that are required to make filings of either Form-N-CEN or N-PORT on or prior to April 30, 2020 (but after March 12, 2020), the deadline for such filing will be extended to no more than 45 days after the original due date provided: The fund determines it is unable to meet the original filing deadline due to circumstances related to the current or potential effects of COVID-19; The fund notifies the Commission by e-mail that it is relying on the Emergency Order along with a brief description of why it could not file the report on a timely basis; The estimated date by which it expects to file the report (the fund is required to file the report prior to the maximum 45 extension deadline if it is able to do so); The fund includes a statement on its public website stating that it is relying on the Emergency Order along with the reasons it could not file the report on a timely basis; and Once filed, the report must include a statement that the fund relied on the Emergency Order and the reasons why it was unable to file the report on a timely basis. RELIEF WITH RESPECT TO THE PREPARATION OR TRANSMITTAL OF ANNUAL AND SEMI-ANNUAL REPORTS The Emergency Order provides that, with respect to funds that are required to transmit annual or semi-annual reports to shareholders on or prior to April 30, 2020 (but after March 12, 2020), the deadline for such transmittal will be extended to no more than 45 days after the original due date provided: The fund determines it is unable to prepare or transmit the report by the original deadline due to circumstances related to the current or potential effects of COVID-19; The fund notifies the Commission by e-mail that it is relying on the Emergency Order along with a brief description of why it could not transmit the report on a timely basis; The estimated date by which it expects to transmit the report (the fund is required to transmit the report prior to the maximum 45 extension deadline if it is able to do so); The fund includes a statement on its public website stating that it is relying on the Emergency Order along with the reasons it could not prepare or transmit the report on a timely basis; and The fund files the report with the Commission within 10 days of its transmission to shareholder. RELIEF RELATING TO PROSPECTUS DELIVERY Finally, the Emergency Order contains a statement from the Commission whereby it announced that the Commission has taken the position that it would not provide a basis for a Commission enforcement action if a registered fund does not deliver a current prospectus to investors under the following circumstances: The fund determines it is unable to deliver the prospectus on a timely basis due to circumstances related to the current or potential effects of COVID-19 The sale of shares to the investor was NOT an initial purchase by the investor of shares of the fund The fund notifies the Commission by e-mail that it is relying on the Emergency Order along with a brief description of why it or any other person required to deliver the prospectus could not deliver the prospectus on a timely basis The estimated date by which it expects to deliver the prospectus The fund includes a statement on its public website stating that it is relying on the Commission position along with the reasons it could not deliver the prospectus on a timely basis, Publishes the current prospectus on its website, and The fund was required to deliver the prospectus on or prior to April 30, 2020 and after March 12, 2020 and the prospectus will be transmitted to shareholders as soon as practicable but no later than 45 days after the original date required. Questions and Areas of Focus for Boards Relating to COVID-19 In the wake of the extreme market volatility and other uncertainties surrounding the COVID-19 pandemic, there are certain areas of focus and questions that boards may want to explore with management and advisers with respect to the funds they oversee. Some of these questions and areas of focus might include: Does the adviser have appropriate and effective business continuity and disaster recovery procedures in place to ensure there will be no business disruption if employees have to work remotely for an extended period of time? Has the adviser had to implement its business continuity plan as of yet? If so, have any issues been uncovered?  If not, is there increased testing to ensure that the adviser will be able to continue business operations without disruption? How has the fund’s liquidity risk management program held up in the recent market volatility? Have there been any issues meeting shareholder redemptions? Have redemptions spiked? Has there been increased call-center activity and how responsive has the call center been throughout this period? Have there been any issues with the fund’s third-party services providers, particular with respect to calculating the fund’s NAV each day? Have you had recent discussions with them about implementation of their business continuity plans and are you comfortable they can continue providing services to the fund? With the recent market volatility has there been any valuation issues? Have pricing services continued to operate and provide pricing is an acceptable manner? Has the fund’s most significant pricing services implemented their business continuity plans? Have portfolio managers of any funds encountered any significant portfolio management issues or challenges as a result of the coronavirus or market volatility, and if so, what actions have been taken? Has the adviser taken any steps to mitigate risk for any funds that have significant exposure to regions, sectors or industries that are being most affected by the coronavirus outbreak? Has the adviser put any travel restrictions in place related to portfolio manager and/or compliance due diligence trips and how is that impacting operations? Does the adviser or management see the need at this time to take advantage of any of the relief provided by the Commission in the Emergency Order? Considerations when Setting up Telephonic and Video Meetings As funds take advantage of the Emergency Order to turn their next in-person meetings into telephonic or video conferences, boards and management may wish to restructure certain portions of their meetings to better accommodate the telephone or video structure of the meetings. Many board meetings typically run 6-10 hours day and may last one or more days. In this light, it may be appropriate for boards and management to consider the following: Consider revising the meeting agenda to defer until the next in-person meeting certain agenda items which might engender a better discussion in the in-person context, such as matters relating to new business initiatives, product restructurings, fund family product rationalizations, marketing initiatives and the like; In an effort to keep the meeting manageable from the perspective of length and maintaining maximum attention span throughout the call, consider limiting verbal presentations to a critical few, with question and answer format set aside for more routine matters for which written reports have been provided; Consider scheduling a number of breaks through-out the session; Consider instructing all Trustees to inform the board if they need to step out of the meeting for any period of time; Limit participation in the meeting to critical participants and instruct all participants when speaking, to be sure to pause frequently to allow for questions. Participants need to understand that if they do not pause occasionally for questions, other participants may have difficulty breaking in with questions; Be sure that all meeting materials are provided well in advance of the meetings, with none provided only at the meeting. For example, even if technology is used which allows for all participants to simultaneously view presentations during the meeting, consider requiring that such presentations must also be provided in advance of the meeting; and If executive sessions are to be part of the meeting, consider using a technology which can confirm which parties are participating in the meeting at a given time. The situation surrounding COVID-19 remain fluid and fast developing. It is important that all Trustees remain abreast of developments and their potential impact on the funds they oversee.