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VOLUME 2, NO. 19, MAY 6, 2013 TO MAY 12, 2013
Federal
Environmentalists appeal BLM extension of Colorado leases. Wilderness Workshop, a Colorado environmental group, is appealing the U.S. Bureau of Land Management (“BLM’s”) decision to suspend 25 oil and gas leases in the Thompson Divide pending a new study of potential environmental impacts. Although the leases were due to expire this month, BLM stated that, it may choose to void, extend, or renew the leases after the study is completed. Until then, the lessees cannot develop the leases. Wilderness Workshop argues that BLM should have just allowed the leases to expire as they were never developed and characterizes the lease suspensions as a “bailout” of the companies. The appeal is to the BLM State Director and then may be appealed to the Interior Board of Land Appeals.
BLM: Sequester forced postponement of lease auctions. BLM announced it is postponing all new California oil and gas lease auctions until October 2013, citing budget cuts. The planned lease auctions included approximately 3,300 acres of land overlaying California’s Monterey Shale. Environmental groups who oppose development in the Monterey welcomed BLM’s announcement. The announcement follows a district court ruling that BLM had not complied fully with the National Environmental Policy Act (“NEPA”) before auctioning four leases in the Monterey. The groups have filed a further suit against a second set of BLM leases alleging similar NEPA claims.
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Week of May 13, 2013
Congress returned last week from its brief recess. Despite not having to address last minute fiscal related issues, Congress engaged in much fiscal legislative activity including appropriate committee consideration of various relevant Agency spending budgets that forebode potential battles to come. }
President’s Nominees Continue to Fare Differently
On the cabinet related front, the President’s nominee to head the Environmental Protection Agency (EPA), current EPA Assistant Administrator for the Office of Air and Radiation, Gina McCarthy, encountered obstacles in her confirmation process last week. Senate Environment and Public Works (EPW) Committee Republicans, citing a lack of answers to various of their post-confirmation hearing questions, decided to boycott last week’s EPW Committee vote, at which consideration of the nomination was scheduled, leaving the EPW majority, who were also short two Senators (Senator Baucus (MT) and Senator Lautenberg (NJ)), without further immediate recourse. Insiders suggest that following White House accusations of “obstructionism,” the Agency will attempt to respond to the unanswered questions. Chairman Boxer (D-CA) has noticed a business meeting for this upcoming Thursday, May 9, 2013, for the Committee to vote on McCarthy. Chairman Boxer claims that pursuant to a Committee exception, a ten vote approval from all ten EPW Democrats would suffice to report the nominee out of Committee; Ranking Member Vitter (R-LA) has indicated that Committee rules require that at least two minority Members be present for a quorum. Senator Lautenberg, while sick at home in New Jersey, has committed to travel to submit his approval should he be required to do so. Boxer has committed to alter the Committee rules if necessary to approve the McCarthy nomination. During the Bush administration, Senate Democrats boycotted EPW Committee consideration of then Governor Mike Leavitt (R-UT), nominee to head the Environmental Protection Agency, before his later approval and confirmation.
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May 13, 2013
As employers implement more aggressive and creative measures to lower health costs through wellness programs, there has been increased scrutiny as to whether such programs run afoul of federal anti-discrimination laws. During a public meeting on May 8, 2013, the U.S. Equal Employment Opportunity Commission (EEOC) heard testimony from a panel of witnesses representing business and employee advocates and providers regarding the importance of developing guidance under such laws as the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). The panel also discussed the interplay between employer wellness programs and healthcare laws, such as the Health Insurance and Portability and Accountability Act (HIPAA) and the Affordable Care Act (ACA). The EEOC meeting was just the beginning of its analysis of employer wellness programs and formal guidance from the EEOC is not expected for some time. Employers nevertheless must now navigate the area carefully as there are increasing challenges in the courts concerning the interplay between wellness programs and these statutes.
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May 13, 2013
On May 6, 2013, the Securities and Exchange Commission (the “Commission”) ordered the City of Harrisburg, Pennsylvania, to cease and desist from committing violations (current and future) of the anti-fraud provisions of the federal securities laws, marking the first time that the Commission has charged a municipality for such violations and putting public officials (both elected and appointed) on notice that their statements, both written and oral, are part of the total mix of information on which investors may, depending on the circumstance, rely when deciding to purchase a municipality’s securities and holding the municipality potentially liable under those laws for materially misleading statements and omissions made recklessly by such officials.
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May 9, 2013
The UK Supreme Court judgment in BNY Corporate Trustee Services Limited and others v Eurosail-UK 2007-3BL PLC [2013] UKSC 28 was handed down on 9 May 2013. It considered the meaning of the balance sheet insolvency test (as laid out in section 123(2) of the UK Insolvency Act 1986) and whether a post-enforcement call option is relevant to an assessment of balance sheet insolvency.
The decision is relevant to those in the securitization industry (the dispute arose from a residential mortgage backed securitization transaction), but has much wider ramifications for company directors and insolvency practitioners given that the balance sheet test is one of the grounds on which a company can become the subject of a winding up or administration order. In addition, the balance sheet test is frequently used as an event of default in a wide variety of commercial and financial contracts.
This alert outlines the basis for the decision and considers its potential implications.
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May 8, 2013
With the continued frenetic regulatory landscape and the activity taking place in the investment fund industry, we have prepared, as in the past, a compendium of updates that our lawyers have sent to our investment fund clients over the second half of 2012 and the beginning of 2013.
We have included all of the updates, making the compendium repetitive in instances where we revisited a topic to report on emerging information and breaking news in the industry.
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VOLUME 2, NO. 18, APRIL 29, 2013 TO MAY 5, 2013
Sidley Austin LLP is pleased to distribute This Week in Hydraulic Fracturing, Volume 2, No. 18, (April 29, 2013 to May 5, 2013). This weekly publication provides updates on the latest developments on the hydraulic fracturing front on the federal, state and business levels.
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May 6, 2013
Hong Kong’s stricter regulatory regime covering the use and transfer of personal data for direct marketing came into force on April 1, 2013. The attached Sidley Update is a brief overview of the new rules.
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May 2, 2013
The Consumer Financial Protection Bureau (“CPFB”) released on April 30, 2013 a final rule (“Final Rule”) implementing the remittance transfer provisions in section 1073 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The Final Rule provides important new flexibility for remittance transfer providers, especially in open-loop environments such as international wire transfers. The CFPB also extended the effective date of the Final Rule to October 28, 2013. This doubles the proposed period of 90 days, and will give remittance transfer providers almost six months to implement the Final Rule.
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May 2, 2013
Recent press reports have highlighted the heightened regulatory scrutiny that is being applied to the conduct of individuals who run or are otherwise associated with investment funds and who also serve on the boards of one or more portfolio companies. While recent investigations by the Securities and Exchange Commission and Department of Justice appear to address this situation primarily in the context of 10b5-1 plans, it is important to note the broader issues presented. Board members who also run or are otherwise associated with investment funds must be particularly careful to ensure that their personal trading -- and the trading carried out by their funds -- can withstand a heightened level of regulatory scrutiny given the non-public company information that they regularly receive as board members.
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VOLUME 2, NO. 17, APRIL 22, 2013 TO APRIL 26, 2013
Federal
EPA reduces estimates of methane leakage at hydraulically fractured well sites. In a significant step, the Environmental Protection Agency (“EPA”) lowered its estimate of fugitive methane emitted at hydraulically fractured well sites. As a result, the agency has reduced its estimate of greenhouse gas emissions from the oil and gas sector by 20% in its 1990-2010 greenhouse gas inventory relying on emission controls which EPA previously had assumed were not installed and by revising estimates for liquids unloading, a maintenance practice for producing wells. The inventory’s trend shows methane emissions dropping, even as production has been increasing. Industry had previously criticized EPA’s estimates as based on poor quality data and unrealistic assumptions that were contrary to actual survey data. Environmental NGOs, who filed challenges to the oil and gas new source performance standards demanding direct regulation of methane emissions, criticized the revisions and stated that methane regulation must still be a priority for EPA.
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May 1, 2013
Key UK Competition Reforms Passed into Law – an array of significant changes to the UK’s competition regime have just been adopted, including: (i) merging the two main competition authorities; (ii) lowering the threshold for breach of the criminal Cartel Offence; and (iii) introducing a new statutory timeline for merger reviews.
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May 1, 2013
The following Sidley update examines the outlook for the Public Company Accounting Oversight Board (“PCAOB”)’s enforcement program as it enters its tenth year of operation. As explained below, it appears that, on the whole, the level of PCAOB investigative and enforcement activity in 2013 will be comparable to that in 2012. Three aspects of the PCAOB’s enforcement program to watch as potential drivers of increased enforcement activity are: (1) the PCAOB’s recently-announced “extraordinary cooperation” policy; (2) investigations and enforcement activities related to non-U.S. public accounting firms; and (3) investigations and enforcement proceedings conducted by the PCAOB’s New York office.
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April 30, 2013
On April 10, 2013, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services issued a proposed rule (the Proposed Rule) that would amend the electronic health record (EHR) safe harbor under the federal Anti-Kickback Statute (AKS). That safe habor allows health care organizations to donate EHR technology without triggering the AKS. The Proposed Rule can be found at
http://www.gpo.gov/fdsys/pkg/FR-2013-04-10/pdf/2013-08314.pdf. The Centers for Medicare and Medicaid Services (CMS) issued a parallel proposed rule for the EHR exception under the Stark Laws (“Stark Law safe harbor proposal”). While both rules propose nearly identical amendments, the proposed amendments to the AKS EHR safe harbor are specifically discussed below. Public comments for both the Proposed Rule and the Stark Law safe harbor proposal are due by June 10, 2013.
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April 25, 2013
The Securities and Exchange Commission (“SEC”) and the Commodity Futures Trading Commission (“CFTC”) released, on April 10, 2012, their final regulations—referred to as Regulation S-ID by the SEC—requiring certain broker-dealers, investment advisers, investment companies, futures commission merchants and other entities subject to the Commissions’ respective enforcement authority to establish programs to address identity theft risks. The regulations implement Section 615(e) of the Fair Credit Reporting Act, often called the “red flags” rule. The new regulations, at 17 C.F.R. pts. 162 and 248, become effective on May 20, 2013; compliance with the regulations will be required as of November 20, 2013. Entities regulated by the SEC and CFTC should review their identity theft programs to ensure they meet the requirements of the new regulations.
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VOLUME 2, NO. 16, APRIL 15, 2013 TO APRIL 21, 2013
Sidley Austin LLP is pleased to distribute This Week in Hydraulic Fracturing, Volume 2, No. 16, (April 15, 2013 to April 21, 2013). This weekly publication provides updates on the latest developments on the hydraulic fracturing front on the federal, state and business levels.
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April 24, 2013
Sidley Austin LLP is pleased to distribute this issue of the SEC Enforcement Quarterly newsletter. Each quarter, our SEC Enforcement Practice publishes this review of recent developments in SEC enforcement and related matters.
In this issue, we feature the following articles:
- Sidley’s SEC Enforcement Practice Expands
- SEC Announces Record Insider Trading Settlement of $600 Million
- SEC Increases Enforcement Scrutiny of Hedge Funds: Enforcement Division and Pre-Enforcement Investigations and Examinations
- SEC and DOJ Actions Against Trader for Defrauding Clients by Misquoting Prices of Bonds
- Another Judge Questions SEC Settlement Practices
- SEC Inks Agreement with E-Discovery Vendor
- FY 2012 Sees Marked Increase in Number of SEC Settlements
- The SEC’s Suit Against Mark Cuban Likely Headed for Trial
- SEC Settles Rare Case Involving Private Equity
- Adjustments to Civil Money Penalty Amounts
- The Supreme Court Rejects the SEC’s Application of the Discovery Rule to § 2464
- Risk Modeling at the SEC: Are More Financial Fraud Investigations on the Horizon?
- FCPA Focus
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April 23, 2013
In a victory with broad implications for the financial services and health insurance industries – and ERISA cases in general – the U.S. Court of Appeals for the Seventh Circuit limited the reach of ERISA’s definition of “fiduciary” for entities that do not overtly assume fiduciary status. Specifically, the court affirmed the grant of summary judgment in favor of a 401(k) service provider, holding that it was not a fiduciary under ERISA with respect to its receipt of “revenue sharing” from mutual fund companies. Leimkuehler v. American United Life Insurance Co., No. 12-1081 (7th Cir. Apr. 16, 2013). The opinion provides helpful guidance on the scope of key terms in ERISA’s definition of fiduciary and rejects a novel theory of fiduciary liability that the Department of Labor had espoused in an amicus brief.
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April 22, 2013
The United States Court of Appeals for the Seventh Circuit for the first time announced that it was adopting the Moench presumption of prudence to evaluate claims alleging that it was imprudent for plan fiduciaries to follow plan terms requiring that company stock be made available as an investment option, and held that the claims asserted did not allege sufficient facts to overcome the presumption. See White, et al. v. Marshall & Ilsley Corp., et al., No. 11-2660 (7th Cir. Apr. 19, 2013). The Court also expressed “fundamental doubts” about the common theories of liability in 401(k) stock drop cases, recognizing that “it will be difficult” for any future plaintiff to rebut the presumption of prudence. The Court noted that, absent misrepresentations or other misconduct, “plaintiffs in such cases under ERISA must try to hit a very small and perhaps non-existent target” to establish liability.
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April 19, 2013
The NAIC Spring 2013 National Meeting was held in Houston, Texas, from April 6–9, 2013. It was the first national meeting under the NAIC’s new Chief Executive Officer, former U.S. Senator Ben Nelson, and the NAIC’s new President, James J. Donelon, the Louisiana Insurance Commissioner. During the opening session, President Donelon also welcomed four new members of the NAIC. With an emphasis on protecting the state-based insurance regulatory system, the NAIC’s committees, working groups and task forces continued their work on such pressing topics as the implementation of healthcare reform, the implementation of principle-based reserving, regulation of corporate governance, and achieving consistency with international insurance regulatory standards. These and other important topics are discussed in more detail below.
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April 19, 2013
On April 17, 2013, the Department of Health and Human Services’ Office of Inspector General (“OIG”) released an Updated Provider Self-Disclosure Protocol (“SDP”). The SDP provides a process for all healthcare providers and suppliers, including manufacturers, subject to OIG’s Civil Monetary Penalties (“CMP”) authority to voluntarily identify, disclose, and resolve liability for potential misconduct. The SDP provides specific guidance on SDP requirements and articulates OIG’s new policies that the damages calculation will start at 1.5 times single damages and that those who self-disclose will presumptively not be subject to the imposition of a corporate integrity agreement.
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April 18, 2013
Sidley Austin LLP is pleased to distribute its ninth issue of the “Anti-Corruption Quarterly” newsletter. This quarterly publication provides updates on the latest developments in the evolving area of global anti-bribery/FCPA regulation, analysis of current enforcement trends and new laws/regulations, as well as practical tips on improving anti-corruption compliance measures. In this issue:
Feature Articles
- Running the Judge Gauntlet: Court Approval of FCPA Settlements
- How Long is the Arm of the FCPA?
Columns
- Anti-Corruption Compliance in China
- In The Interim
- Things to Watch
- Compliance Corner – Pack Your Bags
- Of Note
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April 17, 2013
The April Edition of Notable Cases and Events in E-Discovery includes discussion of a District of Kansas decision finding that Kansas does not recognize an independent tort for intentional spoliation of evidence absent an independent duty to preserve evidence and a Maryland District Court decision that plaintiff and its counsel were jointly and severally liable for defendant’s fees and costs as a result of making an inaccurate discovery certification under the Federal Rules of Civil Procedure and for failing to provide electronically stored information in an appropriate format for production.
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VOLUME 2, NO. 14, APRIL 8, 2013 TO APRIL 15, 2013
Sidley Austin LLP is pleased to distribute This Week in Hydraulic Fracturing, Volume 2, No. 15, (April 8, 2013 to April 15, 2013). This weekly publication provides updates on the latest developments on the hydraulic fracturing front on the federal, state and business levels.
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April 16, 2013
The Chinese government recently published the final plan to restructure its food, drug and medical device regulatory agency, now named the China Food and Drug Administration (“CFDA”), defining the boundary of its authority and its collaboration with peer agencies in the central government.
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Week of April 15, 2013
Sidley Austin LLP is pleased to distribute its Washington Energy Update. This weekly publication provides updates on the latest developments on the cross-section of legislation and the energy sector.
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April 15, 2013
In a wide-ranging opinion, the U.S. Court of Appeals for the Ninth Circuit recently addressed claims that 401(k) plan fiduciaries breached their duties under ERISA. The opinion addresses a variety of investment practices that are commonly used in the 401(k) plans of large companies, as well as defenses that are commonly asserted in class actions arising from such practices. The decision is also notable because it reflects one of only a few ERISA class action lawsuits that have been decided after trial on a fuller evidentiary record.
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April 12, 2013
In an opinion that provides a lesson in class action procedure as well as new insight into California’s Elder Abuse Act, a federal court in Chicago recently granted a defendant’s motion for partial summary judgment and then – because the issue on which the defendant had won summary judgment was the only issue common to the putative class – denied class certification.
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April 12, 2013
Last Friday, April 5, 2013, at an American Bar Association conference in Washington, D.C., David Blass, the Chief Counsel of the Securities and Exchange Commission’s (the “SEC”) Division of Trading and Markets, expressed concern at the way many private funds market interests in those funds through internal marketing personnel without the involvement of an SEC-registered broker-dealer. As a result, Mr. Blass stated that the SEC was subjecting private fund advisers to an “increased examination focus” with respect to the internal marketing activities of such advisers.
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April 11, 2013
On April 9, 2013, FDA issued a draft guidance document, entitled “Molecular Diagnostic Instruments with Combined Functions,” to explain the agency’s current thinking on the regulation of molecular diagnostic instruments that have both “device” (e.g., in vitro diagnostic (IVD)) and “non-device” (e.g., basic research) functions and of associated software and firmware. The draft guidance could effectively impose new regulatory obligations on in vitro diagnostic (IVD) manufacturers.
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April 11, 2013
A federal court in Chicago recently denied class certification in a case under the Telephone Consumer Protection Act (“TCPA”), providing a potential road map for other defendants about how to win at this critical phase of a case.
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April 11, 2013
On April 3, 2013, the Pension Benefit Guaranty Corporation (“PBGC”) issued proposed rules (revising rules previously proposed in 2009) concerning the reportable events applicable to employers sponsoring defined benefit pension plans. The proposed rules will waive the reporting requirements for many reportable events for financially sound plans and financially strong companies; essentially, reporting will be limited to high risk plans that are at substantial risk of default. Under the proposed rules, reporting is waived for most events currently covered by funding-based waivers (as described below) if the plan or its sponsor comes within a financial soundness safe harbor intended to be based on widely available financial measures already used in business.
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April 10, 2013
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which was signed into law by President Obama on July 21, 2010, created a comprehensive reporting and recordkeeping regime applicable to “swaps.” The Dodd-Frank Act also created a comprehensive reporting and recordkeeping regime applicable to “security-based swaps.” While the Securities and Exchange Commission, which is responsible for writing rules with respect to security-based swaps, has not yet enacted final implementing regulations, the Commodity Futures Trading Commission (“CFTC”) has finalized substantially all of the regulations requiring reporting and recordkeeping with respect to swaps regulated by the CFTC, which were scheduled to take effect today, April 10, 2013.
On Tuesday, April 9, 2013, the CFTC’s Division of Market Oversight (“Division”) issued no-action relief extending the April 10, 2013 deadline for reporting certain swaps to a registered swap data repository (“SDR”), under Part 43 (real-time reporting), Part 45 (dealing with swaps entered into on or after April 10, 2013) and Part 46 (dealing with “historical swaps”) of the CFTC’s rules, subject to certain conditions.
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Volume 2, No. 14, April 1, 2013 to April 7, 2013
Sidley Austin LLP is pleased to distribute This Week in Hydraulic Fracturing, Volume 2, No. 14, (April 1, 2013 to April 7, 2013). This weekly publication provides updates on the latest developments on the hydraulic fracturing front on the federal, state and business levels.
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April 8, 2013
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which was signed into law by President Obama on July 21, 2010, created a comprehensive reporting and recordkeeping regime applicable to “swaps.” The Dodd-Frank Act also created a comprehensive reporting and recordkeeping regime applicable to “security-based swaps.” While the Securities and Exchange Commission, which is responsible for writing rules with respect to security-based swaps, has not yet enacted final implementing regulations, the Commodity Futures Trading Commission (“CFTC”) has finalized substantially all of the regulations requiring reporting and recordkeeping with respect to swaps regulated by the CFTC.
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April 8, 2013
The SEC recently issued Frequently Asked Questions ("FAQs") regarding the application of SEC Rule 15a-6. SEC Rule 15a-6 provides several exemptions for foreign broker-dealers from having to register as broker-dealers under the U.S. Securities Exchange Act of 1934 when conducting certain limited activities in the United States. This Sidley Update summarizes each of the new FAQs.
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April 5, 2013
On April 5, 2013, U.S. Citizenship and Immigration Services (USCIS) announced that it had reached the congressionally mandated 65,000 regular H-1B cap for fiscal year 2014 on April 5, 2013. USCIS also announced that it received sufficient H-1B petitions to meet the 20,000 U.S. master’s exemption. Any cap-subject H-1B petitions received after April 5, 2013 will be rejected.
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April 5, 2013
Beginning April 10, 2013, counterparties to swaps and certain foreign exchange transactions will be required to comply with substantial new reporting and recordkeeping requirements under Parts 43, 45 and 46 of the rules of the Commodity Futures Trading Commission.
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April 5, 2013
On April 2, 2013, the SEC issued a report regarding the application of Reg FD to disclosures made through social media sites including Facebook and Twitter. Following an investigation into the incident from July 2012 when the CEO of Netflix posted potentially material information on his personal Facebook page, the SEC has concluded that social media can be a “recognized channel of distribution” for communication of material, nonpublic information with investors in conformity with Reg FD if, among other things, proper advance notice is given of the social media sites to be used.
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April 4, 2013
On 14 February 2013 the European Commission published a proposed directive concerning the implementation of the EU financial transaction tax (the FTT). The scope of the proposed FTT is considerably wider than may otherwise be expected. In particular, it will be important to note both: (i) the wide basis upon which a “financial institution” is defined for the purposes of the FTT; and (ii) the fact that the FTT will have considerable extra-territorial effect.
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April 4, 2013
The insurance industry is global. Insurance and reinsurance companies are some of the largest financial players on the world stage. They assume and warehouse all manner of risk from every corner of the earth and serve as an enormous investor base in the financial community. Increasingly, risk is shared globally among traditional and new entrants in the market. Risk generated in one part of the world is distributed across multiple time zones to other participants in the market, whether they be other insurers, reinsurers, private equity sponsors or capital market investors. This constantly evolving industry requires regulatory regimes to adapt on a regular basis. Regulatory issues arising in one market may influence the way in which similar regulatory concerns are addressed in other markets. To understand the insurance industry, one must have a solid grasp of global developments.
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VOLUME. 2, NO. 13, MARCH 25, 2013 to MARCH 31, 2013
Sidley Austin LLP is pleased to distribute This Week in Hydraulic Fracturing, Volume 2, No. 13, (March 25, 2013 to March 31, 2013). This weekly publication provides updates on the latest developments on the hydraulic fracturing front on the federal, state and business levels.
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April 2, 2013
In our previous EU AIFM Directive (“AIFMD”) Update, we examined what non-EU managers will need to do from 22 July 2013 in order to market their funds in the EU. In this Update, we focus on the implications of the AIFMD for non-EU fund managers who manage EU-domiciled alternative investment funds (for example, a US hedge fund manager managing an Irish fund).
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April 2, 2013
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April 2, 2013
1 April 2013 saw the entry into force of perhaps the most significant reforms of English litigation for more than a decade. The reforms follow many of the recommendations made by Lord Justice Jackson following his comprehensive review of costs and funding in England and Wales. In this update we highlight certain key reforms, including the introduction of U.S. style contingency fees (referred to in England as “damages-based agreements”) for the first time in English litigation. We also assess how these changes will alter the menu of funding options available to parties who are, or may be, involved in litigation before the English courts.
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April 1, 2013
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March 29, 2013
In Comcast Corp. v. Behrend, No. 11-864 (U.S. March 27, 2013), the U.S. Supreme Court heightened the requirements for plaintiffs seeking class certification. The ruling will require district courts to pay close attention to plaintiffs’ theories of classwide damages before deciding whether to certify a class and thus has significant implications for antitrust class actions in particular and for class actions in general.
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VOLUME 2, NO. 12, MARCH 18, 2013 TO MARCH 24, 2013
Sidley Austin LLP is pleased to distribute This Week in Hydraulic Fracturing, Volume 2, No. 12, (March 18, 2013 to March 24, 2013). This weekly publication provides updates on the latest developments on the hydraulic fracturing front on the federal, state and business levels.
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March 27, 2013
The U.S. Department of Treasury published proposed regulations on March 1, 2013 regarding the annual fee under section 9010 of the Patient Protection and Affordable Care Act (“ACA”) that is imposed on certain insurers providing health insurance in the United States. Health insurers subject to the annual fee include health maintenance organizations (“HMOs”), insurers providing Medicare Advantage, Medicare Part D or Medicaid and multiple employer welfare arrangements (“MEWAs”), but only to the extent the MEWAs are not fully insured. The following entities are not subject to the health insurance provider fee: indemnity reinsurers, employers sponsoring self-insured group health plans, governmental entities, certain nonprofit organizations organized under state law, and voluntary employees’ beneficiary associations (“VEBAs”). The fee applies beginning in 2014, but only if the covered insurer’s aggregate net premiums written in the preceding calendar year exceeded $25 million.
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March 26, 2013
On March 18, 2013, the Financial Crimes Enforcement Network (“FinCEN”) issued guidance entitled “Application of FinCEN’s Regulations to Persons Administering, Exchanging, or Using Virtual Currencies” (“Guidance”). The Guidance, which is effective immediately, addresses the application of the Bank Secrecy Act to participants in certain virtual currency systems. Companies involved in convertible virtual currency systems should assess the impact of the Guidance on their compliance obligations without delay.
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Week of March 25, 2013
Sidley Austin LLP is pleased to distribute its Washington Energy Update. This weekly publication provides updates on the latest developments on the cross-section of legislation and the energy sector.
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VOLUME 2, NO. 11, MARCH 11, 2013 TO MARCH 17, 2013
Sidley Austin LLP is pleased to distribute This Week in Hydraulic Fracturing, Volume 2, No. 11, (March 11, 2013 to March 17, 2013). This weekly publication provides updates on the latest developments on the hydraulic fracturing front on the federal, state and business levels.
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March 21, 2013
With the proliferation of high-tech mobile devices into all aspects of our lives, employers are increasingly finding a “Bring Your Own Device” policy to be an attractive way to lower costs while maintaining employee morale. Yet, employers who adopt such policies are often finding their interest in preserving and protecting corporate data at odds with their employees’ right to privacy. During a recent law school symposium, the Chief Information Officer of the United States Equal Employment Opportunity Commission, Kimberly Hancher, weighed in on what she believed, based on the EEOC’s own experience with implementing a “Bring Your Own Device” policy, were best practices for employers to keep in mind when implementing such policies.
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March 20, 2013
Class action plaintiffs have sometimes been able to avoid federal jurisdiction under the Class Action Fairness Act (“CAFA”) by stipulating that they will not seek more than $5 million for the putative class – the jurisdictional threshold under CAFA. The Supreme Court has now put an end to that form of forum-shopping by holding that these stipulations are not binding on absent class members and, hence, do not preclude federal jurisdiction.
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March 20, 2013
This Spring is filled with deadlines regarding swaps, particularly cleared swaps. Some are fast approaching. We would like to take a moment to remind you of these upcoming deadlines and provide this checklist.
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March 20, 2013
As part of the UK Budget 2013, the UK Government has announced its intention to launch two public consultations which will be of interest to the international investment management industry. The consultations relate to: (i) tax-avoidance measures relating to the use of UK partnerships and limited liability partnerships; and (ii) the potential expansion of the scope of the UK investment manager exemption.
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March 19, 2013
This month’s edition of the Notable Cases and Events in E-Discovery includes discussion of a Second Circuit opinion that FRCP 37 e-discovery sanctions are not reviewable under the collateral order doctrine and a Fifth Circuit ruling that the protections of the Stored Communications Act do not apply to unauthorized access to data stored on a personal cell phone.
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Week of March 18, 2013
Sidley Austin LLP is pleased to distribute its Washington Energy Update. This weekly publication provides updates on the latest developments on the cross-section of legislation and the energy sector.
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March 15, 2013
On March 14, 2013, the 12th National People’s Congress of China approved the plan to restructure several government authorities, including the State Food and Drug Administration, and the Ministry of Health.
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March 15, 2013
Massachusetts’ highest court ruled on March 11, 2013 that a consumer could bring a claim under a state statute based on a merchant’s recording her ZIP code when she used her credit card to make a purchase. The decision, Tyler v. Michaels Stores, Inc., No. SJC-11145, 2013 Mass. LEXIS 40 (March 11, 2013), may lead to the filing of similar lawsuits, as occurred following a similar ruling by California’s Supreme Court in Pineda v. Williams-Sonoma Stores, Inc., 246 P.3d 612 (Cal. 2011).
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March 14, 2013
On March 8, 2013, the Federal Trade Commission (“FTC”) issued a staff report, entitled Paper, Plastic… or Mobile: an FTC Workshop on Mobile Payments, on the mobile payments industry and its effects on consumers (the “Report”). The Report, based on a workshop held by the FTC on April 26, 2012, addresses a number of issues that the FTC has found notable in the mobile payments space. While the Report does not announce any new policy initiatives, it highlights areas on which the FTC may focus in its future regulatory and enforcement activity and legislative advocacy with respect to consumer protection and privacy laws. The Report addresses five main topics of concern to the FTC with respect to mobile payments, often reiterating some of the positions taken by participants in the workshop.
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March 13, 2013
On March 8, 2013, the Department of Labor issued Field Assistance Bulletin 2013-01 (the “FAB”), containing guidance regarding disclosure requirements for sponsors of defined benefit pension plans with respect to the funding relief provided for defined benefit pension plans by the Moving Ahead for Progress in the 21st Century Act (“MAP-21”). This guidance is applicable to annual funding notices issued to plan participants for applicable plan years beginning on or after January 1, 2012, the first of which generally are due by April 30, 2013.
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March 13, 2013
At a 12 March 2013 Workshop, organized by the European Commission’s Directorate General for Competition (“DG Comp”) to discuss the findings of an Ernst & Young study into the dynamics of competition in co(re)insurance, underwriter and broker representatives repeatedly emphasized the highly competitive nature of the ad hoc subscription market. Although the Workshop offered less insight into the regulator’s assessment of pools and the ad hoc subscription market than had been expected (DG Comp attendees at the Workshop being mainly “in listening mode”), a number of indications as to possible next steps did emerge.
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March 13, 2013
The European Markets Infrastructure Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories ("EMIR") has imposed obligations on market participants that are determined by reference to the status of their counterparties. Market participants are therefore subject to increased know your customer requirements. On 8 March 2013, the International Swaps and Derivatives Association, Inc. ("ISDA") published the ISDA 2013 EMIR NFC Representation Protocol (the "Protocol") to assist market participants with ascertaining the status of their counterparties.
Attached is an update which provides an analysis of the Protocol and how it can be used to facilitate the categorization of counterparties to OTC derivatives contracts.
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March 12, 2013
FDA has proposed a rule that could significantly affect the timeline and pathway to market for medical devices. Under the proposal, foreign clinical studies would have to comply with Good Clinical Practice if those studies will be used to support certain submissions, including an investigational device exemption application, a Section 510(k) premarket notification, and a premarket approval application.
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March 12, 2013
This year marks the 10th anniversary of the Hong Kong Securities & Futures Appeals Tribunal (SFAT), established on April 1, 2003 under Part XI of the Securities and Futures Ordinance, Cap. 571 (SFO). The SFAT is a statutory watchdog that reviews regulatory, as well as disciplinary decisions made by the Securities and Futures Commission (SFC), the statutory regulator of the Hong Kong securities industry. This update discusses the evolution of the current regime, the key milestones and rulings made by the SFAT.
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VOLUME 2, NO. 10, MARCH 4, 2013 TO MARCH 11, 2013
Sidley Austin LLP is pleased to distribute This Week in Hydraulic Fracturing, Volume 2, No. 10 (March 3, 2013 to March 11, 2013). This weekly publication provides updates on the latest developments on the hydraulic fracturing front on the federal, state and business levels.
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March 12, 2013
ISO 14001 is undergoing a revision process aimed at significantly changing the requirements of what is the world’s most widely-used environmental management systems standard. These changes will affect the large “installed base” of ISO 14001 facilities (over 10,000 in North America and over 250,000 world-wide), as well as how regulators and enforcers (including U.S. EPA and DOJ) view environmental compliance programs. The ISO 14001 revision process is still open to participation and advocacy to shape the final outcome.
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March 11, 2013
The Securities and Exchange Commission recently issued important regulatory and compliance guidance for registered investment advisers. This alert summarizes:
- Statement of 2013 Division of Investment Management priorities by Director Norm Champ;
- Statement of the SEC’s 2013 National Examination Program priorities; and
- SEC Risk Alert regarding compliance with custody rule under the Investment Advisers Act of 1940, as amended.
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March 8, 2013
On February 28, 2013, the Center for Drug Evaluation of the State Food and Drug Administration, the key agency reviewing safety and efficacy data of pharmaceutical products marketed in China, published its 2012 Annual Report.
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March 8, 2013
This update first discusses the annual limitations on the amounts group health plans may require participants to pay for deductibles, co-insurance, co-payments and other expenditures (“cost-sharing”) for essential health benefits for plan years beginning on or after January 1, 2014. These limitations do not apply to health plans that were in existence on the date the Patient Protection and Affordable Care Act (the “Act”) was enacted (March 23, 2010) if they have not been significantly changed (“grandfathered plans”). Separately, this update discusses recently published final regulations regarding the essential health benefit packages that must be offered by insurers in the individual and small group markets.
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March 7, 2013
On February 22, 2013, the United States Environmental Protection Agency (USEPA) published in the Federal Register a proposed rule focusing on air pollutant emissions produced during the startup, shutdown or malfunction (SSM) of an air emission source. 78 Fed. Reg. 12459 (Feb. 22, 2013). USEPA’s proposal could have significant compliance implications particularly for sources that experience excess emissions during startups and shutdowns, and in some cases may eventually require the addition of new emission controls to avoid sanctions.
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March 5, 2013
Recent weeks have witnessed two key developments in the application of EU competition law to payments systems. Both come at a pivotal moment for payments regulation worldwide as industry prepares for the shift to mobile payments, and as competition enforcers square up to new questions posed by innovation in the payments ecosystem.
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Volume 2, No.9 (February 25, 2013 to March 3, 2013)
Sidley Austin LLP is pleased to distribute This Week in Hydraulic Fracturing, Volume 2, No. 9, (February 25, 2013 to March 3, 2013). This weekly publication provides updates on the latest developments on the hydraulic fracturing on the federal, state and business levels.
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March 5, 2013
Sidley Austin LLP is pleased to distribute its Washington Energy Update. This weekly publication provides updates on the latest developments on the cross-section of legislation and the energy sector.
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March 5, 2013
On February 28, 2013, the Department of Labor’s (the “DOL’s”) Employee Benefits Security Administration released final rules on multiple employer welfare arrangements (“MEWAs”) that will assist the new enforcement authority given to the U.S. Secretary of Labor under the Patient Protection and Affordable Care Act (the “ACA”). The DOL also released notices regarding changes to the Form M-1, Report for Multiple Employer Welfare Arrangements and Certain Entities Claiming Exception, and changes to the Form 5500, Annual Return/Report, that is filed by administrators of certain welfare plans.
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March 4, 2013
A recent decision of the UK First-Tier Tribunal found that an employee repaying a signing bonus should receive tax relief because the repayment amounted to “negative pay” for the employee. The decision could potentially be of considerable practical importance to employees and directors who receive employment compensation which they are subsequently required to pay back.
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March 1, 2013
On 25 February 2013, the French Competition Authority (“FCA”) announced its decision to launch a pharmaceutical sector inquiry into the distribution of medicines in France. The FCA will investigate whether industry practices interfere with recent regulatory and economic developments in the pharmaceutical sector aimed at promoting generic entry (increased public support for generics, opting-for-generics schemes for patients and regulation of online sale of medicines).
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March 1, 2013
FDA has finalized its guidance on financial disclosure for clinical investigators. A draft of the guidance, published in May 2011, was developed in response to a 2009 report from the Office of the Inspector General (OIG) that criticized the practices of investigators, clinical trial sponsors, and the Agency on this issue. The final guidance responds to comments received on the 2011 draft and differs in several key respects.
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March 1, 2013
Members of Sidley Austin’s Global Life Sciences Industry Team recently reviewed litigation, policy, regulatory and enforcement trends in their respective fields. Our Team recommends that law and policy departments in the life sciences industry manage risks and take advantage of business opportunities by taking the outlined steps in 2013.
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February 28, 2013
Pharmaceutical and biologic manufacturers operate in an increasingly global economy where legal developments in one market may have cascading impacts on the legal and business environments in other regions and nations. To help manufacturers identify such developments and anticipate the potential implications, complications, and opportunities that may result in other key markets, Sidley Austin LLP’s Global Life Sciences Team is pleased to offer the second issue of the Global Pricing Newsletter to update clients on pharmaceutical and biologic pricing issues around the world.
In this second issue, we provide an update on recent developments impacting pricing in the United States (US), Germany, the United Kingdom (UK), the European Union (EU), India, and China as well as transparency initiatives of government bodies in the US, Europe, Asia, and Australia.
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February 28, 2013
In a unanimous opinion released yesterday in Gabelli v. SEC, the Supreme Court held that the five-year statute of limitations period in 28 USC § 2462—the general statute of limitations for federal civil penalty actions, including SEC enforcement cases—begins to run at the time “the fraud is complete” rather than when it is discovered. The Court rejected the SEC’s arguments that the discovery rule should apply to § 2462.
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February 27, 2013
In a recent speech, Craig Lewis, the Chief Economist and Director of the U.S. Securities and Exchange Commission Division of Risk, Strategy, and Financial Innovation, unveiled a new analytical tool for risk-monitoring called the Accounting Quality Model (“AQM”). The anticipated launch of the AQM may signal a new phase of significant accounting and financial reporting investigations.
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February 27, 2013
On December 28, 2012, China’s legislative body issued a decision that lays out the basic framework for protection of electronic personal data, which took immediate effect. On November 15, 2012, China’s standard-setting authority issued a non-binding national standard on personal information protection in information systems, which became effective on February 1, 2013. Together, these new rules have provided some additional clarity on personal data protection requirements in China, including personal data collection, processing and transfer, and companies operating in China should carefully review the new requirements to ensure compliance.
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February 27, 2013
Under EU competition law rules, an EU investor may potentially be held liable where it has a controlling interest in a company that is engaged in anti-competitive conduct, even where the investor was unaware of such conduct. Indeed, it is known that the European Commission is currently pursuing a bank purely on the basis of its ownership interest in a company allegedly involved in a cartel. Liability for antitrust violations can give rise not only to significant fines by antitrust regulators but also to follow-on damages actions before the courts. Although such actions are not as developed in Europe as in the U.S., there is a growing trend towards more private damages litigation in Europe. This month, the UK Government released details of proposals intended to encourage more private litigation based on competition law. The proposals include the introduction of an opt-out collective action regime – among the first of its kind in the EU and bearing many similarities to the U.S. class action system.
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February 27, 2013
The last few months have seen several noteworthy opinions granting auditors’ motions to dismiss claims brought pursuant to Section 10(b) of the Securities Exchange Act of 1934. These recent decisions provide important tools for auditors to obtain dismissal of such claims. With respect to the element of scienter, the recent cases demonstrate a strengthening commitment to the “demanding” standard that the auditor’s state of mind must “approximate an actual intent to aid in the fraud being perpetrated by the audited company.” With respect to the element of a material misrepresentation, courts now are regularly holding that plaintiffs must allege that the auditor subjectively did not believe its audit opinion to be true, providing an independent avenue to dismissal.
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Volume 2, No. 8, (February 18, 2013 t0 February 24, 2013)
Sidley Austin LLP is pleased to distribute This Week in Hydraulic Fracturing, Volume 2, No. 8, (February 18, 2013 to February 24, 2013). This weekly publication provides updates on the latest developments on the hydraulic fracturing on the federal, state and business levels.
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February 26, 2013
Recent reports indicate that the Consumer Financial Protection Bureau (CFPB) has warned banks that it may bring enforcement lawsuits regarding discriminatory practices in auto lending. Action by the CFPB would be an important development for the exercise of its fair lending authority as well as its authority over auto loans.
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February 25,2013
On January 22, 2013, the Ministry of Health of China published the amended Good Supply Practice for Drugs (“Drug GSP”). Drug GSP is one of the key regulations governing distribution activities of drug wholesalers and retailers in China, and it also applies to sales of drugs by manufacturers and to activities in the drug distribution chain that involve warehousing and logistics.
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February 22, 2013
The European Commission has issued draft competition law rules for technology transfer agreements. It has opened the drafts (revised guidelines and a block exemption) for a final round of public consultation between now and May 17, 2013. Once adopted, the new rules will remain in force until 2026.
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February 21, 2013
This memorandum discusses a new type of transformative strategic transaction that public companies should consider in 2013. It may increase a public company's efficiency, as well as improve its hostile takeover defense preparedness.
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VOLUME 2, NO. 7, FEBRUARY 11, 2013 TO FEBRUARY 17, 2013
Sidley Austin LLP is pleased to distribute This Week in Hydraulic Fracturing, Volume 2, No. 7, (February 11, 2013 to February 17, 2013). This weekly publication provides updates on the latest developments on the hydraulic fracturing on the federal, state and business levels.
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February 21, 2013
Intellectual property license grants usually contain a long list of adjectives, including some that are, in our experience, frequently misunderstood. “Revocable” and “irrevocable” are two examples. The parties to a license often include or omit these words without understanding how doing so may affect the license and the overall contract. Because the law is somewhat murky on the subject, we offer this practice note to explain and offer some recommendations on how to use these terms.
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February 21, 2013
On February 4, 2013, the Brazilian Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (National Petroleum, Natural Gas and Biofuels Agency, or ANP) confirmed that it would hold its Round 11 Oil and Gas Auction on May 14-15, 2013 and announced that the auction will include an additional 117 blocks. With these additional blocks, the auction will now include 289 blocks covering a total area of over 60,000 square miles. This confirmation and announcement constitute a considerable development given that Brazil has not completed an oil and gas rights auction since 2008 due to legislative disputes over the allocation of oil and gas royalties. The Round 11 Auction will likely spur significant new investment and M&A activity in the Brazilian oil and gas sector. In order to participate in the Round 11 Auction, however, potential investors must complete the qualification requirements no later than March 26, 2013.
Sidley Austin LLP has brought together a team of lawyers that have been involved in more than 70% of all Brazilian upstream oil and gas M&A deals (by deal value for deals over $50 million) since 2009, according to Thomson Reuters data.
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February 20, 2013
On February 13, 2013, the Federal Trade Commission (“FTC”) staff issued an advisory opinion giving the go-ahead to an Oklahoma physician hospital organization (“PHO”) seeking to create a clinically integrated network and engage in joint contracting with payors on behalf of its participating providers. Notably, the staff letter approved the PHO’s plan even though it does not call for any financial risk-sharing among the participating providers, who together constitute a majority of the physicians and the only hospital system in Norman, Oklahoma.
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February 20, 2013
Recently published amendments prepared by the Rapporteur of the European Parliament’s responsible committee on the Commission’s proposal to reform the EU’s rules on clinical trials could have a significant impact on the pharmaceutical industry, if the amendments are adopted and included in the final text of the proposed EU Clinical Trials Regulation.
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February 19, 2013
On February 8, 2013, the U.S. Department of Housing and Urban Development (“HUD”) released a final rule (the “Rule”) permitting disparate impact challenges to housing and mortgage lending practices under the Fair Housing Act (“FHA”). HUD takes the position that the Rule simply formalizes, and provides a consistent interpretation of, its longstanding position that liability may arise under the FHA from a racially neutral practice that has a discriminatory effect, even if there is no evidence that the practice was motivated by discriminatory intent.
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Week of February 18, 2013
Sidley Austin LLP is pleased to distribute its Washington Energy Update. This weekly publication provides updates on the latest developments on the cross-section of legislation and the energy sector.
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February 19, 2013
On February 7, 2013, the Department of Labor (“DOL”) issued Advisory Opinion 2013-01A (the “Advisory Opinion”), which clarified the application of the fiduciary responsibility and prohibited transaction provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), to certain “cleared swap” transactions subject to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The Advisory Opinion clarified that (i) margin deposited by a plan with a clearing member in connection with a cleared swap transaction is not a plan asset, (ii) a clearing member is not a fiduciary under ERISA by reason of liquidating a swap contract and selling margin in connection with a default by a plan customer, but (iii) a clearing member is a “party in interest” with respect to a plan customer and, accordingly, certain transactions between the plan and the clearing member that occur in connection with cleared swap transactions will be prohibited transactions under ERISA unless a prohibited transaction exemption is applicable.
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February 14, 2013
The UK Data Protection Authority (the Information Commissioner’s Office) published in late November 2012 a Code of Practice on managing data protection risks related to anonymization. This Code has been published at a time when anonymization techniques and the status of anonymized data are one of the key issues for many industries including media, financial services and life sciences, since one of the benefits of anonymization is that the onerous data protection obligations under EU Data Protection laws will not apply to such data. The Code provides a framework, good practices and recommendations for organizations considering using anonymization and explains what it expects from organizations using such a process.
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February 13, 2013
The Third Circuit’s January 23, 2013 ruling in
Ethypharm S.A. France v. Abbott Laboratories (No. 11-3602) reinforced that court’s requirements for antitrust injury and standing, highlighting a significant hurdle facing any antitrust plaintiff in the Third Circuit who is neither a competitor nor a consumer in the relevant market.
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February 13, 2013
On February 4, 2013, Assembly Member Mike Gatto (D-Los Angeles) introduced legislation (AB 227) to amend California Health & Safety Code Section 25249.7, also known as Proposition 65. The proposed bill provides a mechanism for companies to avoid Proposition 65 liability.
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VOLUME 2, NO. 6 (FEBRUARY 4, 2013 TO FEBRUARY 10, 2013)
Sidley Austin LLP is pleased to distribute This Week in Hydraulic Fracturing, Volume 2, No. 6, (February 4, 2013 to February 10, 2013). This weekly publication provides updates on the latest developments on the hydraulic fracturing on the federal, state and business levels.
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February 13, 2013
A key rule mandated by the 2008 Consumer Product Safety Improvement Act, requiring that manufacturers and importers of children’s products establish extensive third party testing, certification and recordkeeping systems, and prepare a written manual, is now in force. Any children’s product manufactured on or after February 8, 2013, is subject to this mandate, and to additional safeguards designed to ensure that third party laboratories are not subjected to “undue influence.”
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Week of February 11, 2013
Sidley Austin LLP is pleased to distribute its Washington Energy Update. This weekly publication provides updates on the latest developments on the cross-section of legislation and the energy sector.
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February 12, 2013
On January 31, 2013, the United States and the European Union (EU) completed implementation of the mutual recognition arrangement for their respective supply chain security programs. U.S. Customs and Border Protection (CBP) administers the Customs-Trade Partnership Against Terrorism (C-TPAT), which is now recognized as equivalent to the European Union’s Authorized Economic Operator (AEO) program. U.S. importers authorized under C-TPAT, should they elect to allow CBP to share certain information with the EU, will be considered secure, and their exports will receive a lower risk score by the customs administrations of EU Member States. In practice, certification translates into time and money savings for parties dealing with trusted operators. In that sense, certified operators are successfully marketing their status as a distinguishing competitive advantage.
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February 12, 2013
On 11 February 2013, officials at the European Commission’s Directorate General for Competition (“DG Comp”) published an Ernst & Young study into the dynamics of competition around co(re)insurance pools and ad hoc co(re)insurance agreements on the subscription market. Ernst & Young’s study, commissioned by DG Comp in November 2011 and slated for discussion at a DG Comp workshop on 12 March 2013, departs from the findings in the regulator's 2007 Sector Inquiry into Business Insurance by emphasising a number of pro-competitive aspects of the ad hoc subscription market. However, the study – which represents the latest in a long line of reviews of competition in the EU’s (re)insurance sector – also appears to criticise a number of co(re)insurance pools for failing to conduct (adequate) competition law assessments of their activities.
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February 12, 2013
The February Edition of Notable Cases and Events in E-Discovery includes discussion of a Central District of California decision ordering a defendant who failed to preserve and produce relevant ESI to hire an outside vendor to manage the defendant’s ongoing production obligations and a Fourth Circuit decision holding that the marital communication privilege was waived by a defendant who used his office email account and office computer to send emails to his spouse but took no steps to preserve their confidentiality after being put on notice that such emails were subject to inspection by his employer.
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February 12, 2013
On January 28, 2013, FDA released the latest in a series of guidances addressing the use of genomic information to inform drug development and approval. The guidance, “Clinical Pharmacogenomics (PGx): Premarket Evaluation in Early-Phase Clinical Studies and Recommendations for Labeling,” recommends that sponsors include pharmacogenomic assessment in, and collect DNA samples from all subjects at the outset of, early-phase drug trials.
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February 7, 2013
On January 17, 2013, the Office for Civil Rights (“OCR”), U.S. Department of Health and Human Services (“HHS”), released a highly anticipated final rule (the “Final Omnibus Rule” or “Final Rule”) which makes sweeping changes to the privacy, security and enforcement regulations promulgated under the Administrative Simplification provisions of the Health Insurance Portability and Accountability Act (“HIPAA”). The Final Rule is actually comprised of four rules:
- Final modifications to the HIPAA Privacy, Security, and Enforcement Rules as mandated by the Health Information Technology for Economic and Clinical Health Act, P.L. 411-05 (“HITECH”) as well as certain other modifications to improve the rules;
- Final modifications to the HIPAA Enforcement Rule, originally published on October 30, 2009 as an interim final rule, to incorporate increased and tiered monetary penalties pursuant to HITECH, among other changes;
- Final rule on Breach Notification for Unsecured Protected Health Information (“PHI”) under HITECH, which supplants an interim final rule published on August 24, 2009; and
- Final rule implementing certain provisions of the Genetic Information Nondiscrimination Act of 2008 (“GINA”) by revising the HIPAA Privacy Rule to provide for increased privacy protections for genetic information.
With the Final Rule, OCR seeks to increase protections of PHI, improve workability and flexibility, decrease compliance burdens, and better harmonize privacy requirements with other HHS regulations, such as the Food and Drug Administration’s regulations on research involving human subjects. Some of the more significant provisions of the Final Rule are summarized below.
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Volume 3, No. 5 (January 28, 2013 to February 3, 2013)
Sidley Austin LLP is pleased to distribute This Week in Hydraulic Fracturing, Volume 2, No. 5, (January 28, 2013 to February 3, 2013). This weekly publication provides updates on the latest developments on the hydraulic fracturing on the federal, state and business levels.
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February 7, 2013
The UK Government has released proposals to introduce an opt-out collective action regime for competition cases – among the first of its kind in the EU, and bearing many similarities to the U.S. class action system. The explicit purpose of the proposals is to encourage more competition law litigation in the UK.
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February 6, 2013
With less than six months to go to the implementation of the EU Alternative Investment Fund Managers Directive (AIFMD) on 22 July 2013, and with the adoption of the main AIFMD “Level 2” Regulation, managers both within and outside the EU need to prepare how they will manage and/or market their funds under the new regime.
To that end, we have prepared two detailed Updates on the AIFMD.
- AIFM Directive 2013 Update: Overview and Final Steps to Implementation. This Update gives an overview of the AIFMD as a whole. This Update will be of interest to managers generally, but in particular EU-based managers who will become authorised under the AIFMD.
- AIFM Directive 2013 Update: Marketing by US and Other Non-EU Managers. This Update considers what US and other non-EU managers, in particular hedge fund and private equity fund managers, will need to do from 22 July 2013 in order to market their funds to investors in the EU. In particular, it considers in detail the AIFMD disclosure and transparency requirements that will apply to such managers.
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February 5, 2013
On 29 January, the High Court in London ruled that the UK’s regulatory rules applicable to the distribution of client money following the failure of a regulated firm require that open trading positions are valued at the time of failure of the firm, and not at a later date when the positions are closed out.
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February 5, 2013
Warning and untitled letters issued to prescription drug manufacturers in 2012 reflect continued FDA focus on pre-approval communications. FDA’s Office of Prescription Drug Promotion (OPDP) last year issued two untitled letters to manufacturers alleging that pre-approval communications about investigational new drugs exceeded the scope of permissible “scientific exchange” under 21 C.F.R. § 312.7(a). This follows a seven-year period in which OPDP (and its predecessor, the Division of Drug Marketing, Advertising, and Communications (DDMAC)) issued no such letters, prior to which the number of letters had attained a fifteen-year high. The 2012 letters point up the importance of continued manufacturer attention to FDA’s interpretation of the pre-approval promotion rules, even as OPDP has been considering changes to § 312.7(a) since soliciting public comment on the issue in December 2011.
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February 5, 2013
After a long period of delay, the Centers for Medicare & Medicaid Services (“CMS” or the “Agency”) at last released its final rule (the “Final Rule”) implementing the Physician Payment Sunshine Act (Section 6002 of the Affordable Care Act) (the “Act”) on February 1, 2013. Due to the Agency’s delay, CMS will not require applicable manufacturers to report payments occurring prior to August 1, 2013, and the first manufacturer reports made pursuant to the Act will be due to CMS by March 31, 2014.
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February 4th, 2013
In January 2013, three important developments regarding the EU’s good manufacturing practice (“GMP”) rules for medicinal products were made public:
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the European Commission published significant revisions to the EU GMP guidelines for public consultation, including on supply chain traceability, complaint investigations, and prevention of cross-contamination;
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the Commission’s ‘written confirmation’ template that must be used as of 2 July 2013 for active substances imported into the EU was amended; and
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the Commission’s Implementing Decision on the assessment of the EU equivalence of third countries’ regulatory and enforcement framework regarding the manufacturing of active substances was published in the EU’s Official Journal.
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February 4, 2013
Today the California Supreme Court issued its long-awaited opinion in Apple v. Superior Court (Krescent), holding that the Song-Beverly Credit Card Act of 1971 does not apply to online transactions relating to electronically-downloaded products. The Act, which prohibits retailers from collecting and recording a customer’s personal identifying information as a condition of accepting payment by credit card, was enacted prior to the advent of online commerce, and in today’s decision, the California Supreme Court held in a closely-divided opinion that the Legislature could not have intended the Act to apply to internet commerce relating to electronically-downloaded products.
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February 4, 2013
The failed mergers of UPS and TNT at the end of 2012 and of Deutsche Börse and NYSE Euronext at the start of 2012 show that hedge funds can stand to lose significant sums when speculating on mergers subject to EU merger control approval, as well as emphasizing the importance of having a thorough understanding of how the pre-merger antitrust notification process will likely play out. This note considers the issues facing hedge funds in their arbitrage practices.
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Volume 2, No. 4, (January 21, 2013 to January 27, 2013)
Sidley Austin LLP is pleased to distribute This Week in Hydraulic Fracturing, Volume 2, No. 4, (January 21, 2013 to January 27, 2013). This weekly publication provides updates on the latest developments on the hydraulic fracturing on the federal, state and business levels.
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January 31, 2013
On January 24, 2013, the Department of Labor, the Department of Health and Human Services (“HHS”), and the Treasury Department (together, the “Departments”) released the eleventh in a series of questions and answers (“FAQs”) relating to the implementation of the Affordable Care Act.
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January 30, 2013
On January 22, 2013, the Federal Financial Institutions Examination Council (“FFIEC”) issued a request for comment on proposed guidance entitled “Social Media: Consumer Compliance Risk Management Guidance” (the “Guidance”). Comments on the proposed Guidance must be received by the FFIEC on or before March 25, 2013. Upon completion, the Guidance will be issued as supervisory guidance by the federal financial regulatory agencies and the State Liaison Committee of the FFIEC also will encourage state regulators to adopt the final Guidance.
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Week of January 28, 2013
Sidley Austin LLP is pleased to distribute its Washington Energy Update. This weekly publication provides updates on the latest developments on the cross-section of legislation and the energy sector.
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January 29, 2013
On January 25, 2013, a panel of the U.S. Court of Appeals for the District of Columbia Circuit held that President Obama overstepped his constitutional authority when he bypassed the Senate to appoint three members to the National Labor Relations Board in January 2012. The President had asserted that the appointments were justified under the Constitution’s provision that he may “fill up all Vacancies that may happen during the Recess of the Senate.” The court held that the appointments, which did not occur during the recess between two separate Senate sessions, were beyond the scope of that Recess Appointments Clause. The decision could have a substantial impact on the Consumer Financial Protection Bureau.
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January 29, 2013
The European Parliament’s Civil Liberties Committee has recently published a Report on the proposed EU Data Protection Regulation which will have a significant impact on the life sciences industry including companies based in the EU or which provide goods or services in the EU. In addition to fines of up to 2% of annual worldwide turnover the amendments impose numerous new requirements, including on obtaining consent from individuals to use their data, the transfer of data internationally, the appointment of mandatory data protection officers and restricting the ability to carry out scientific research.
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January 28, 2013
On 25 January 2013, the European Commission’s new guidelines regarding the use of food-related health claims were published in the EU’s Official Journal.
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January 25, 2013
On January 11, 2013, the SEC approved the enhanced NYSE and NASDAQ listing standards applicable to compensation committee members and compensation advisers as required by the Dodd-Frank Act. This memorandum briefly describes the listing standards and recommends actions that listed companies should consider taking to comply with them.
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January 25, 2013
On January 16, 2013, Sidley filed its opening brief in a suit challenging the SEC’s “Conflict Minerals Rule,” which imposes costly reporting requirements on U.S.-registered companies that use tin, tantalum, tungsten, or gold in their products. The petitioners urge the D.C. Circuit to vacate the rule for a number of reasons, including the SEC’s failure to conduct an appropriate cost-benefit analysis as required by statute and D.C. Circuit case law. This update summarizes the petitioners’ arguments in favor of vacatur.
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Volume 2, No. 3, (January 14, 2013 to January 20, 2013)
Sidley Austin LLP is pleased to distribute This Week in Hydraulic Fracturing, Volume 2, No. 3, (January 14, 2013 to January 20, 2013). This weekly publication provides updates on the latest developments on the hydraulic fracturing on the federal, state and business levels.
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January 24, 2013
Sidley Austin LLP is pleased to distribute this issue of the SEC Enforcement Quarterly newsletter. Each quarter, our SEC Enforcement Practice publishes this review of recent developments in SEC enforcement and related matters.
In this issue, we feature the following articles:
- When Does the § 2462 Statute of Limitations Begin for Fraud Claims?
- Another Trial Setback for the SEC
- SEC Drops Suit Against Individual In Financial Crisis Case
- Lessons From the Deepwater Horizon Settlement
- The Perils of Social Media For Public Companies Under Reg FD
- FCPA FOCUS
- Recent Case Highlights Importance of a Structured Response to an SEC Subpoena
- Commissioner Aguilar Endorses Stiffer Penalties
- SEC Issues Second Annual Report on its Whistleblower Program
- SEC Reports Record-Breaking Enforcement Statistics in Fiscal Year 2012
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January 23, 2013
On December 17, 2012, the Ministry of Health (“MOH”) issued a new regulation that subjects certain high-value medical devices to a centralized procurement regime.
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January 23, 2013
SEC-registered investment advisers have certain annual requirements under the Investment Advisers Act of 1940, some of which also apply to exempt reporting advisers. This update reminds investment advisers about certain annual regulatory and compliance obligations, including a number of significant 2013 reporting or filing deadlines. In particular, many advisers will report for the first time on Form PF. This update also reminds advisers that are registered CPOs or CTAs of new reporting requirements on Forms CPO-PQR and/or CTA-PR, as well as NFA reporting requirements.
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January 22, 2013
Sidley Austin LLP is pleased to distribute its eighth issue of the “Anti-Corruption Quarterly” newsletter. This quarterly publication provides updates on the latest developments in the evolving area of global anti-bribery/FCPA regulation, analysis of current enforcement trends and new laws/regulations, as well as practical tips on improving anti-corruption compliance measures. In this issue:
Feature Articles
Columns
- In The Interim
- Compliance Corner - Tone at the Top: More Than Just Jargon
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January 18, 2013
The IRS has released final regulations under the Foreign Account Tax Compliance Act.
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January 17, 2013
On January 10, 2013, California Attorney General Kamala D. Harris released extensive recommendations for privacy best practices for mobile application (app) developers and other participants in the mobile marketplace. See Kamala D. Harris, Privacy On the Go: Recommendations for the Mobile Ecosystem (Jan. 2013). The recommendations are the most recent development in a high-profile campaign to move mobile apps into compliance with the Attorney General’s reading of California’s Online Privacy Protection Act (OPPA), which requires “commercial Web sites and online services” to develop and conspicuously display privacy policies. See Cal. Bus. & Prof. Code § 22575(b). The recommendations follow the Attorney General’s Dec. 6, 2012, filing of an action against Delta Air Lines, alleging that Delta’s failure to post a privacy policy in its “Fly Delta” mobile app for use on smartphones and other electronic devices violated the OPPA and California’s Unfair Competition Law.
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2013
For almost two decades, the Sidley Reinsurance Law Report has been a useful tool for cedents, reinsurers, retrocessionaires, intermediaries, arbitrators, and others transacting business in the insurance and reinsurance industry. Last year the title was changed to the Insurance and Reinsurance Law Report in order to reflect the broad topics of interest to the industry covered in the Report.
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January 15, 2013
The Federal Trade Commission has announced the most recent annual adjustments to the Hart-Scott-Rodino Act premerger notification thresholds (effective February 11, 2013) and the thresholds that apply to interlocking directorates under Section 8 of the Clayton Act (effective January 14, 2013).
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January 15, 2013
The January Edition of Notable Cases and Events in E-Discovery includes discussion of new e-discovery guidelines issued by the United States District Court for the Northern District of California and a Colorado District Court ruling ordering the production of information relating to plaintiffs’ emotional state, financial status, and comments on the litigation, whether shared with others on Facebook, via emails, or in text messages.
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January 15, 2013
The European Parliament’s Civil Liberties Committee has published its draft report on the proposed EU Data Protection Regulation. The report sets out amendments to the draft EU data protection regulation published by the European Commission last January (the "Regulation"). Despite being one of the most lobbied pieces of European legislation, many will be disappointed that as amended the draft Regulation still imposes very significant burdens on businesses that are in the EU, or which are outside the EU but offer goods or services to EU customers, with fines of up to 2% of annual worldwide turnover.
Sidley Austin in conjunction with DataGuidance will be holding a free
webinar on the Regulation on Thursday, January 17, 2013 at 3pm GMT, 4pm CET and 10am EST – “
EU Privacy Debate Reignited: Analysing the European Parliament’s Draft Report” – for further details and to register for this webinar please click
here.
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January 15, 2013
In 2010, China’s State Food and Drug Administration (“SFDA”) issued a new version of its Good Manufacturing Practice (the “GMP”) regulations, which require manufacturers of sterile drugs (including blood products, vaccines, injections, etc.) to receive new GMP certification before December 31, 2013, and all other drug manufacturers to receive new GMP certification before December 31, 2015.
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January 11, 2013
On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012 (the “Relief Act”). In addition to extending the Bush-era tax rates for the majority of taxpayers, the Relief Act expands the availability of “in-plan Roth conversions.” An “in-plan Roth conversion” allows a participant in a 401(k) plan, 403(b) plan, or governmental 457(b) plan to transfer certain pre-tax amounts held in the plan to an after-tax Roth account maintained under the plan. Such a transfer is treated as a taxable rollover distribution to the Roth account. In connection with the transfer, the participant is required to pay income tax in the year of the transfer on the amount transferred. As a result, the transferred amount and, if certain requirements are satisfied, related earnings will not be subject to income tax when distributed from the plan.
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January 11, 2013
On January 7, 2013, the Court of International Trade affirmed as constitutional a recently enacted amendment to the U.S. international trade law to allow the imposition of anti-subsidy measures on goods imported from non-market economy countries (NMEs), such as China and Vietnam. The CIT rejected several constitutional challenges to the law, which was enacted last March to reverse a Court of Appeals decision in December 2011 barring the Department of Commerce from applying such measures to NMEs. The ruling allows the imposition of anti-subsidy measures against imports from NMEs both prospectively and retroactively to November 2006. The CIT, however, remanded the case to the Department of Commerce to revise or provide additional explanations for specific methodological practices involved in applying the law to NMEs. Further appeals to the Court of Appeals for the Federal Circuit are virtually certain.
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January 11, 2013
The eagerly anticipated relaxation to the P.R.C. rules on the listing of joint stock companies overseas has finally materialized. With effect from January 1, 2013, P.R.C. enterprises which apply to list overseas in the form of joint stock companies no longer need to satisfy the financial tests which are commonly known as the “456 Requirements”.
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January 11, 2013
In December 2012, the U.S. Environmental Protection Agency (EPA) issued two new guidance documents on the use of institutional controls at contaminated sites regulated under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the Resource Conservation and Recovery Act (RCRA), Brownfields programs, and other federal programs. Institutional controls are often an important part of the cleanup at such sites. The guidance provides a comprehensive discussion of many of the issues involved in selecting, planning for, implementing maintaining, and enforcing institutional controls.
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January 10, 2013
The Treasury Department recently published proposed excise tax regulations under section 4980H of the Internal Revenue Code of 1986, as amended (the “Code”), which was added to the Code by the Affordable Care Act. These excise taxes, which apply in certain circumstances even to employers that offer health coverage to their employees, are among the more controversial aspects of the Affordable Care Act, perhaps surpassed only by the mandate that practically every individual lawfully in the United States obtain adequate health coverage or pay a penalty. Section 4890H becomes effective for months beginning after December 31, 2013, essentially the same date that health insurance exchanges are to become operative.
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January 10, 2013
On December 21, 2012, the Consumer Financial Protection Bureau released a proposed rule and request for comment outlining a limited set of revisions to the Bureau’s previously published final rule on international money transfers, and an extension of the date the rule would become effective.
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January 10, 2013
The European data protection authorities (DPAs), represented by the Article 29 Working Party, have launched a Binding Corporate Rules (BCRs) regime for international processors such as outsourcing providers, cloud providers, payment processors, data and document storage companies, alertline providers and many other service providers. Processors can implement these BCRs from 1 January 2013. BCRs are internal codes of conduct that are legally enforceable for data protection and security and, once approved by DPAs, provide a legal basis for transfer of personal data from the EU. BCRs should prove popular as it will be a way for service providers to be able to demonstrate to customers their commitment to data protection and so form part of their customer value proposition.
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Week of January 7, 2013
Sidley Austin LLP is pleased to distribute its Washington Energy Update. This weekly publication provides updates on the latest developments on the cross-section of legislation and the energy sector.
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Winter 2013
As we head into the new year, this edition of the California Litigation Report describes some significant business cases that are likely to be decided by the California Supreme Court in 2013. Of particular note are cases involving issues relating to California’s Unfair Competition Law (UCL) and last year’s AT&T Mobility LLC v. Concepcion decision. This edition also describes an important action recently filed by the California Attorney General under California’s Online Privacy Protection Act. Finally, we discuss several new California laws and amendments effective January 1, 2013 that may significantly impact companies doing business in California.
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January 8, 2013
The Food and Drug Administration issued two proposed rules required by the Food Safety Modernization Act (“FSMA”), the landmark bipartisan overhaul of the U.S. food safety system that was signed into law on January 4, 2011. These rules, the first of many, cover Hazard Analysis and Risk-Based Preventive Controls for Human Food, with some modifications to food good manufacturing practices regulations, and Standards for the Growing, Harvesting, Packing and Holding of Produce for Human Consumption.
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January 7, 2013
On January 2, 2013, President Obama signed into law the fiscal 2013 National Defense Authorization Act, which includes new requirements for defense contractors that handle classified information. These new requirements include rapid reporting and access to equipment and information by Department of Defense Personnel in the event of penetrations of defense contractors’ protected networks and information systems.
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January 4, 2013
On December 31, 2012, the Internal Revenue Service (“IRS”) released a new revenue procedure governing its Employee Plans Compliance Resolution System (“EPCRS”). The general circumstances under which qualified plans can make corrections under EPCRS have not changed, including through (i) the self-correction program without IRS approval, (ii) the voluntary correction program (“VCP”) with IRS approval and (iii) correction on audit. Instead, the laundry list of revisions made by the new revenue procedure appear to create greater consistency and uniformity under the VCP submission process, as well as extend EPCRS to section 403(b) plans and certain governmental section 457(b) plans and clarify certain other aspects of EPCRS.
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January 2013
On January 1, 2013, Congress passed, and the President signed, the American Taxpayer Relief Act, the so-called “fiscal cliff compromise.” By that Act, Congress and the President essentially made permanent the primary 2001 and 2003 “Bush tax cuts,” with some significant exceptions.
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January 3, 2013
On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012 (the “Act”). The Act, besides making the Bush-era tax rates permanent for most taxpayers, reinstates and extends income tax rules important to foreign holders of shares in regulated investment companies ("RICs" or "mutual funds"). Foreign holders that will benefit from the Act include offshore insurance and investment vehicles, which traditionally invest certain issuance proceeds at least temporarily in RICs. This update discusses the provisions of the Act.
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Week of December 24, 2012
Sidley Austin LLP is pleased to distribute its Washington Energy Update. This weekly publication provides updates on the latest developments on the cross-section of legislation and the energy sector.
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December 21, 2012
On December 14, 2012, the Federal Reserve Board (the “Board”) issued a notice of proposed rulemaking (the “Proposal”) that would implement the enhanced prudential standards and early remediation requirements in sections 165 and 166 of the Dodd-Frank Wall Street Reform and Consumer Protection Act for foreign banking organizations with total global consolidated assets of $50 billion or more and foreign nonbank financial companies supervised by the Board. This update provides a summary of the key aspects of the Proposal which would become effective on July 1, 2015. Interested parties have until March 31, 2013 to submit comments on the Proposal to the Board.
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Week of December 17, 2012
Sidley Austin LLP is pleased to distribute its Washington Energy Update. This weekly publication provides updates on the latest developments on the cross-section of legislation and the energy sector.
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December 17, 2012
FINRA recently notified member firms that the staff of the SEC’s Division of Trading and Markets (the “SEC staff”) will allow an optional one-day extension—around the December 2012 month-end holidays—for firms to make reserve deposits as may be required pursuant to Rule 15c3-3(e) under the Securities Exchange Act of 1934. As summarized below, the deadline for a reserve deposit arising from the weekly reserve formula computation will be extended to the Thursday of each of the Christmas and New Year’s holiday weeks for firms that calculate their customer and PAIB reserve formula computations as of the Friday immediately preceding each such holiday week. In addition, in order to avoid a double deposit on Thursday, January 3, 2013, FINRA notes that the SEC staff will allow such firms to elect to prepare a weekly reserve formula computation on Friday, January 4, 2013 for the previous week, in lieu of preparing the computation therefore on Friday, December 28, 2012 (where the resulting reserve deposit, if any, would then be required by Tuesday, January 8, 2013).
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December 13, 2012
Last week’s judgment from the Court of Justice of the European Union (“CJEU”) in the landmark AstraZeneca v Commission case appeared to represent another resounding victory for the European Commission (“Commission”) and a defeat for the innovative pharmaceutical industry. The arguments put by AstraZeneca and by industry association EFPIA (against the General Court’s judgment upholding the Commission’s findings that AstraZeneca had abused a dominant position in relation to its blockbuster Losec product) were rejected in their entirety. However, on closer inspection, key aspects of the CJEU’s judgment may be of assistance to the innovative pharmaceutical industry – and to dominant companies more generally – going forward. It is on these particular aspects of the judgment that this Sidley Update focuses.
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December 13, 2012
The staff of the Commodity Futures Trading Commission has issued CFTC Letter No. 12-45 dated December 7, 2012 relating to the status of securitization vehicles as “commodity pools” because of their use of swaps. Letter No. 12-45:
- expands the interpretive relief granted in CFTC Letter No. 12-14 dated October 11, 2012;
- grants no-action relief as to certain pre-October 12, 2012 securitization vehicles; and
- grants no-action relief until (and not including) March 31, 2013 as to certain other vehicles, thereby extending in certain respects the deferral granted in CFTC Letter No. 12-15 dated October 11, 2012.
Letter No. 12-45 is described in this update.
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December 12, 2012
FINRA Rule 5123, which was approved by the SEC in June 2012 and became effective on December 3, 2012, requires any FINRA member that “sells” an issuer’s securities in a “private placement” to, in the absence of an available exemption, perfect a filing with FINRA that consists of a copy of any private placement memorandum, term sheet or other offering document, as well as any material amendments thereof, that the firm used in connection with such sale (or indicate in the filing that no such offering documents were used). In either case, the filing must be made within 15 calendar days after the date of the first sale.
FINRA Rule 5122, a counterpart rule to FINRA Rule 5123 that was adopted in 2009, requires a filing of offering documents, and imposes certain other requirements, with respect to “member private offerings” (i.e., private placements of unregistered securities issued by FINRA member firms or certain affiliated parties of such member).
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Week of December 10, 2012
Sidley Austin LLP is pleased to distribute its Washington Energy Update. This weekly publication provides updates on the latest developments on the cross-section of legislation and the energy sector.
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December 11, 2012
On December 5, 2012, the Treasury Department published final regulations under the provisions of the Patient Protection and Affordable Care Act (the “Affordable Care Act”) that impose temporary fees on plan sponsors of self-insured health plans and issuers of certain accident and health insurance policies to finance, in part, a trust established by the Treasury Department to fund the Patient-Centered Outcomes Research Institute (the “Institute”). The Institute is a private, nonprofit corporation, established under the Affordable Care Act to assist clinicians, patients and policymakers in making informed health decisions by advancing the quality and relevance of evidence-based medicine.
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December 10, 2012
The Securities and Exchange Commission (SEC) issued a no-action letter that substantially expands the universe of foreign equity securities that may be deemed to have a “ready market” for purposes of Rule 15c3-1 under the U.S. Securities Exchange Act of 1934 (the SEC’s “net capital rule” for broker-dealers). Foreign equity securities meeting the new letter’s criteria:
- are deemed to have a "ready market" and are subject to the 15% haircut provisions for a broker-dealer’s proprietary positions in equity securities (common stock) set forth in Rule 15c3-1(c)(2)(vi)(J), even though there may not be a ready (trading) market for such stock in the United States (as opposed to what would otherwise be a 100% haircut pursuant to Rule 15c3-1(c)(2)(vii) for non-marketable securities); and
- are eligible for treatment as foreign margin stock under Regulation T (for purposes of Regulation T, a foreign margin stock is defined generally as a foreign equity security that either (i) appears on the Federal Reserve Board’s periodically published List of Foreign Margin Stocks, or (ii) is deemed to have a “ready market” under Rule 15c3-1 or an SEC no-action position issued thereunder).
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December 7, 2012
On January 1, 2013, new laws and amendments to existing law will impact employers with California employees. This update is an overview explaining these significant changes.
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December 7, 2012
On November 30, 2012, the Treasury Department released proposed regulations regarding the new 3.8% tax on net investment income realized by certain individuals, estates and trusts for taxable years beginning after December 31, 2012. The new tax was enacted as part of the Health Care and Education Reconciliation Act of 2010. The regulations are generally proposed to be effective for taxable years beginning after December 31, 2013 with comments due by March 5, 2013 in advance of a public hearing scheduled for April 2, 2013 but they may be relied upon until final regulations are effective. Several provisions of the proposed regulations are relevant to individual investors in investment funds and individual owners of investment fund managers.
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December 6, 2012
On November 20, the Food and Drug Administration (FDA) took another step toward modernizing clinical trial oversight by issuing two draft guidance documents related to the conduct of clinical trials. This update discusses:
- Draft Guidance for IRBs, Clinical Investigators and Sponsors: IRB Responsibilities for Reviewing the Qualifications of Investigators, Adequacy of Research Sites, and the Determination of Whether an IND/IDE Is Needed
- Draft Guidance for Industry: Electronic Source Data in Clinical Investigations
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December 6, 2012
On November 29, 2012, the staff of the Division of Swap Dealer and Intermediary Oversight of the Commodity Futures Trading Commission (the “CFTC”) issued a no-action letter providing commodity pool operators (“CPOs”) with temporary registration relief relating to funds-of-funds. Previously, in February 2012, the CFTC issued final rules eliminating a number of exclusions and exemptions relied on by CPOs and commodity trading advisers (“CTAs”) and increasing the reporting requirements for registered CTAs and CPOs.
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December 6, 2012
On November 29, 2012, the staff of the Division of Swap Dealer and Intermediary Oversight of the Commodity Futures Trading Commission (the “CFTC”) issued a no-action letter (the “Letter”) providing commodity pool operator (“CPO”) registration relief for many family offices. Previously, in February 2012, the CFTC issued final rules (the “Final Rules”) eliminating a number of exclusions and exemptions relied on by CPOs and commodity trading advisers (“CTAs”) and increasing the reporting requirements for registered CTAs and CPOs but declined to provide specific exemptions for family offices at that time. The Letter, therefore, provides critical long-awaited relief for many family offices which otherwise would have been subject to CPO registration and reporting requirements pursuant to the Final Rules.
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December 6, 2012
This month’s Notable Cases and Events in E-Discovery include discussion of a Delaware Chancery Court ruling from the bench that the parties use predictive coding in a complicated indemnification case, which appears to be the first instance in which a court, rather than the parties, has suggested its use, and a Seventh Circuit decision allowing authentication of emails by circumstantial evidence in a criminal case.
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December 5, 2012
The Second Circuit’s recent decision in Rates Technology Inc. v. Speakeasy, Inc., No. 11-4462-cv, 2012 WL 2765081, (2d Cir. July 10, 2012) reaffirms that covenants not to challenge the validity of patents in court are not enforceable except when settling actual litigation. This note describes our Technology Transactions practice’s thoughts on what this case means to those who are drafting and negotiating patent licenses.
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December 5, 2012
On November 27, 2012, a divided panel of the Eleventh Circuit held that a bank’s electronic funds transfer agreement failed to shift the risk of unauthorized transfers to its customer under Article 4A of the Uniform Commercial Code (“Article 4A”). The fatal flaw in the bank’s agreement with the customer was that it did not explicitly include the bank’s discretionary security procedures in the definition of “security procedures” accepted by the customer. At the same time, however, the court acknowledged that a properly crafted agreement would permit a bank to incorporate discretionary security procedures by reference. This decision should prompt financial institutions to review the language of their funds transfer agreements to ensure that the agreements unambiguously reference the bank’s discretionary security procedures as part of the Article 4A “security procedures” agreed to by customers.
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December 5, 2012
On November 26, 2012, the Office of Civil Rights, U.S. Department of Health and Human Services issued important new guidance regarding the two existing methods by which covered entities may de-identify Protected Health Information (“PHI”) in accordance with the privacy rule promulgated under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). While the privacy rule has long permitted covered entities to de-identify PHI through one of two methods—expert determination or the safe harbor method—the guidance sheds new light on the general processes by which de-identified information may be properly created and the options available for de-identifying PHI in accordance with the HIPAA privacy rule. The new guidance was developed in consultation with stakeholders, as required by the Health Information Technology for Economic and Clinical Health Act.
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December 3, 2012
In a widely anticipated ruling, the United States Court of Appeals for the Second Circuit rejected the government’s regulation of alleged ‘off-label’ promotion of medical products through the Federal Food, Drug and Cosmetic Act (FDCA)’s misbranding provision.
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December 3, 2012
In a judgment published on November 22, 2012, the Court of Justice of the European Union (CJEU) confirmed that products intended for the investigation of physiological processes only fall within the scope of the EU Medical Device Directive (93/42/EEC), as implemented into EU Member State legislation, if the products are intended for a medical purpose.
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Week of December 3, 2012
Sidley Austin LLP is pleased to distribute its Washington Energy Update. This weekly publication provides updates on the latest developments on the cross-section of legislation and the energy sector.
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December 3, 2012
The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) announced a joint investigation last week into allegedly misleading mortgage-related advertisements. This is the first time the two agencies have announced a joint enforcement action. The FTC and the CFPB share enforcement authority over non-bank mortgage advertisers such as mortgage lenders, brokers, servicers, and advertising agencies under the Mortgage Acts and Practices (MAP) Rule, 12 C.F.R. Part 1014. Potentially affected companies should review their practices in light of this regulatory activity, and with an eye to possible follow-on private consumer protection litigation.
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November 30, 2012
As Sidley previously
reported, the DOJ and SEC jointly released the long-awaited
Resource Guide to the U.S. Foreign Corrupt Practices Act on November 14, 2012. Describing it as “perhaps the boldest manifestation of our transparent approach to enforcement,” Assistant Attorney General Lanny Breuer of the DOJ Criminal Division suggested that the
Guide offers businesses, foreign officials, non-governmental organizations, and others unprecedented insight “to understand why we prosecute FCPA cases as vigorously as we do, and also how and why we make our charging decisions.” After taking a more comprehensive and detailed look at the
Guide, Sidley offers the following assessment of the most important features in the
Guide.
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November 27, 2012
On November 26, 2012, proposed regulations were published in the Federal Register implementing provisions of the Patient Protection and Affordable Care Act, enacted on March 23, 2010, and the Health Care and Education Reconciliation Act, enacted on March 30, 2010 (collectively known as the “Affordable Care Act”), that would increase the maximum permissible reward under a “health-contingent wellness program” from 20% to 30% of the cost of coverage under the employer’s group health plan associated with the wellness program. The term “reward” includes a discount on the employee’s share of the cost of coverage under the group health plan, a waiver of all or a part of a copayment or coinsurance or any other financial incentive, as well as the avoidance of a penalty, such as a premium surcharge. The maximum reward would be further increased to 50% for programs designed to prevent or reduce tobacco use. The regulations would apply to both grandfathered and nongrandfathered group health plans for plan years beginning on and after January 1, 2014.
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November 26, 2012
On January 1, 2013, AB 2674, an amendment to California Labor Code § 1198.5 becomes effective, changing the rules employers must follow with regard to personnel files. The amendment provides new rules for record retention and inspection, among other things.
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November 26, 2012
On November 16, 2012, the U.S. Environmental Protection Agency posted its “PCB Bulk Product Waste Reinterpretation” (“Reinterpretation”) on the Agency’s PCB website. The Reinterpretation addresses the regulatory status of building debris that has been in contact with “non-liquid” PCBs such as PCB-containing caulk and paint. This Reinterpretation was published in the context of increased awareness of the presence of PCB-containing caulk, sealants, paint and other materials in public and commercial buildings constructed between World War II and the mid-1970s.
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November 21, 2012
On November 16, 2012, Institutional Shareholder Services, Inc. (“ISS”) published corporate governance policy updates (the “Policy Update”) to its benchmark proxy voting guidelines. The Policy Update will apply to shareholder meetings held on or after February 1, 2013. The complete text of the
U.S. Corporate Governance Policy – 2013 Updates can be found
here. ISS has indicated that FAQs will be released in December that will address open questions.
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Week of November 19
Sidley Austin LLP is pleased to distribute its Washington Energy Update. This weekly publication provides updates on the latest developments on the cross-section of legislation and the energy sector.
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November 20, 2012
Amendments to the EU’s pharmacovigilance (PV) legislation, most of which entered into force in July this year, have recently been adopted in the form of a Directive and a Regulation. The amended rules impose new significant notification requirements on marketing authorisation (MA) holders and include a broader application of the Urgent Union Procedure.
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November 20, 2012
On November 16, 2012, as President Obama was preparing to head to Asia on a trip that included a six-hour stop in Burma (Myanmar), the U.S. Departments of State and Treasury announced the issuance of a new general license that waives a nearly decade-old U.S. import ban on most Burmese-origin goods. The move represents the latest step in a process of targeted easing first proposed by Secretary of State Hillary Clinton this past April. U.S. persons now may import almost any article that is a product of Burma, with some important limitations.
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November 20, 2012
In mid-October 2012, the EU adopted another round of sanctions against Iran so as to further increase pressure on Iran in relation to the development of a nuclear program.
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November 20, 2012
On November 16, 2012, the Secretary of the U.S. Department of the Treasury made its long-awaited final determination that “foreign exchange swaps” and “foreign exchange forwards” will not be regulated as “swaps” under the Commodity Exchange Act. These transactions will remain subject to mandatory reporting and business conduct standards for swap dealers and major swap participants. Market participants trading foreign exchange derivatives should evaluate whether the contracts they are trading are within the narrow parameters of the Treasury exclusion.
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November 19, 2012
On Wednesday, November 14, 2012, the SEC released its annual enforcement statistics for the 2012 fiscal year (which ended September 30). The SEC filed 734 enforcement actions in FY 2012, just one shy of the record-setting number in FY 2011. The Commission topped FY 2011, however, in terms of its monetary results by obtaining over $3 billion in penalties and disgorgement, an 11 percent increase from last fiscal year. The release also emphasized the increasing size and complexity of the actions the Commission has filed recently. The SEC credited some of its success to its recent reorganization of the Enforcement Division.