On Monday afternoon, March 23, Virginia Governor Northam issued an Executive Order imposing sweeping restrictions on business activity in the Commonwealth in response to the growing COVID-19 health care crisis. The restrictions include mandatory business closures for many types of businesses, potentially impacting over a million workers. [source: NRF website calculating 1.05 million retail jobs in Virginia] The Executive Order goes into effect at the end of the day on Tuesday, March 24 and continues in effect until April 23.
The Executive Order focuses on closing businesses serving the general public, including recreation, personal care and entertainment businesses, as well as restaurants. Other retail and professional businesses must adhere to customer limits, social distancing and sanitization requirements.
Does the Executive Order require investment management businesses with Virginia offices to close?
Explanation: The Executive Order appears to allow these business to continue to operate during their normal business hours. These investment advisers and broker-dealers appear to come under the category of “financial institutions with retail functions” or “professional businesses,” which are business categories exempt from the closure requirements of the Executive Order.
Are there any restrictions imposed on investment management businesses with Virginia offices under the Executive Order?
Explanation: Investment advisers and broker-dealers are not completely free of restrictions under the Executive Order. These businesses must adhere to the following restrictions in operating:
- Limit “patrons” (which appears to mean customers) at the business establishment to no more than 10 at any time.
- Adhere to social distancing guidelines. This appears to refer to the current six foot rule.
- Sanitize common surfaces.
- Teleworking must be implemented as much as possible. Although not entirely clear, proprietary trading, handling of cash or physical checks or other necessary business functions typically performed in a dedicated or secure area within the business premises can likely continue to be performed on-site rather than being forced to develop teleworking solutions.
For investment management businesses, what needs to be done now?
Answer: Documentation is key.
Explanation: Investment management businesses with offices in Virginia should promptly adopt and distribute to personnel working in Virginia offices temporary policies documenting compliance with the Executive Order. In particular, these temporary policies should ban or limit outside visitors entering the office and face-to-face meetings by personnel, and outline a schedule for sanitizing common surfaces such as kitchens, bathrooms, elevators and access doors. If one or more employees need to be on-premises to perform necessary business functions, the reason should be documented.
For more information, contact one of the attorneys in our Investment Management Group.
Resources regarding the Executive Order: