By: Jessica Cohen

This is a summary of current Washington State and Seattle governmental orders affecting commercial tenancies at this stage of the COVID-19 pandemic. Residential tenancies are not addressed in this article.

Washington State: Under Governor Inslee’s Proclamation 20-19.6, commercial landlords in Washington State are prohibited from increasing (or threatening to increase) rent or the amount of any deposit on commercial rental property if the commercial tenant has been materially impacted by COVID-19, whether the tenant (i) is personally impacted and unable to work, (ii) the business was deemed a “non-essential” business pursuant to the Stay Home – Stay Healthy Proclamation 20-25, or (iii) the business lost staff or customers due to the COVID-19 outbreak. The prohibition on increasing rents does not apply if rent increases were in a lease agreement executed prior to February 29, 2020. These protections are in effect until June 30, 2021.

King County: The King County’s Sheriff’s Office announced on March 17, 2020, that it is “temporarily suspending the service and enforcement of evictions until further notice.” The sheriff’s letter implies that it applies to commercial, residential, and post-foreclosure evictions.

City of Seattle:

Authored by Pamela J. Anderson

The Pipeline and Hazardous Materials Safety Administration (PHMSA) is continuing to monitor the effects the COVID-19 outbreak is having on the nation’s pipeline operations. As a result, on March 20, 2020, PHMSA released a Notice of Enforcement Discretion under which it will provide relief with respect to operator qualification and

Authored by Pamela J. Anderson

In light of the recent actions taken by federal, state, and local government agencies in response to the current COVID-19 outbreak, the Pipeline and Hazardous Materials Safety Administration (PHMSA) is providing guidance to its state pipeline safety partners on ways to continue to effectively execute their shared pipeline safety mission.

On March 26, 2020, the Securities and Exchange Commission (“SEC”), announced two agency actions providing additional relief to market participants in response to the impacts of COVID-19 on the markets. First, the SEC adopted an interim final rule providing relief related to (a) market participants needing to gain access to make filings on the EDGAR

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In our previous post, we reviewed how the financial markets’ reaction to the COVID-19 pandemic requires mutual funds to review, and possibly reclassify, the liquidity of their investments. As liquidity and valuation are often two sides of the same coin, factors that may lead to reclassifying a security’s liquidity may also raise questions concerning how to value the security for purposes of calculating a mutual fund’s net asset value (“NAV”). This post discusses when this may be the case.

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During a recent webinar, Steve explained that the market and trading conditions caused by the COVID-19 pandemic might be “reasonably expected to materially affect one or more of [a mutual fund’s] investments’ classifications” for purposes of the fund’s liquidity risk management program (its “LRM Program”). In this circumstance, Rule 22e-4 under the Investment Company Act of 1940 requires more frequent review of these classifications. This post describes how a rough market may require a mutual fund (other than a money market fund or in-kind exchange traded fund) to reclassify an investment’s liquidity classification.

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The U.S. Securities and Exchange Commission (“SEC”) recently provided relief relating to the implementation of the Consolidated Audit Trail (“CAT”). First, on March 16, 2020, the SEC’s Division of Trading & Markets staff issued a No-Action Letter (“NAL”) to temporarily allow broker-dealer personnel who are working on CAT implementation to focus on critical operations. Second, on March 17, 2020, the SEC granted relief aimed at reducing CAT cybersecurity risks by exempting self-regulatory organizations (“SROs”) from collecting or retaining certain retail customer data. In addition, as a result of the market volatility caused by the COVID-19 pandemic, the SEC’s Division of Enforcement issued a reminder on the importance of maintaining market integrity.

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In the midst of the COVID-19 pandemic, the financial markets have experienced significant volatility. During the course of this volatility, exchanges have halted trading multiple times after declines in trading trigged circuit breakers. In addition, trading floors are transitioning to electronic trading in efforts to prevent the transmission of COVID-19 on physical trading floors. With the recent turmoil, this post provides a high-level summary of the various types of circuit breakers and what can be expected.

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On March 9, 2020, FINRA released Regulatory Notice 20-08 (the “Regulatory Notice”) providing guidance and limited relief to its member broker-dealers during the COVID-19 pandemic. In particular, the Regulatory Notice requests that broker-dealers evaluate their compliance with FINRA Rule 4370, which requires broker-dealers to create, maintain, and update upon any material change, BCPs (Business Continuity Plans) identifying procedures relating to emergency or significant business disruption.

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1. Inventory “relationship level” considerations in legal documentation that governs your derivatives trading relationships (ISDA Master Agreements, Futures Customer Agreements, Master Securities Forward Transaction Agreements, etc.)

a. Example: Decline in Net Asset Value Provisions (Common in ISDAs)

i. Identify the trigger decline levels and time frames at which transactions under the agreement can be terminated (25% over a 1-month period – is that measured on a rolling basis or by reference to the prior month’s end?)

ii. Confirm whether all or only some transactions can be terminated (typically, it is all transactions)

iii. Identify the notice requirements that apply when a threshold is crossed

iv. Identify whether the agreement includes a “fish or cut bait clause” that restricts the ability of the other party to designate the termination of the transactions under the trading agreement