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January 31, 2012
2011 Year in Review
Last year, Sidley Austin LLP’s Insurance & Financial Services Group issued a client alert listing Ten Items to Watch in 2011. With that year concluded, we take this opportunity to review the items and report briefly on their development in 2011.
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- Insurance and Reinsurance Litigation
- Insurance/Reinsurance Disputes
- EU and International Privacy
- Privacy, Data Security and Information Law
- Asset-Backed Securitization
- Environmental Torts, Class Actions and Public Nuisance Litigation
- Insurance Company Investment Strategies
- Insurance/Financial Services Class Actions
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January 31, 2012
Opportunities to Comment on the Implementation of the EU Falsified Medicines Directive
The European Commission is currently taking the necessary steps to implement the provisions of the EU Falsified Medicines Directive (2011/62/EU – the “Directive”), published on 1 July 2011 and amending the EU Medicinal Products Directive (2001/83/EC).
The Directive establishes new measures to prevent falsified medicines from entering the legal supply chain and is likely to increase the costs for companies that have active substances manufactured in certain countries outside of the EU and North America.
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- Food, Drug and Medical Device Compliance and Enforcement
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January 31, 2012
The Landscape for Competition Damages Actions in London’s Olympic Year
The European Commission has for some time sought to encourage private claims against companies which have infringed European Union (“EU”) competition laws but activity in this area varies within the EU from jurisdiction to jurisdiction. This update looks back on some important developments from 2011 concerning competition damages actions in England & Wales. It also looks ahead to likely developments in 2012, including judgments of the English courts and the possibility of the European Commission proposing legislation on collective actions.
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January 30, 2012
CFTC Finalizes Significant Dodd-Frank Swap Regulations and Proposes Long-Awaited Regulations Implementing Volcker Rule
On January 11, 2012, the Commodity Futures Trading Commission (“CFTC”) held an open meeting and approved (i) three final rule releases, (ii) a delegation of authority and (iii) one proposed rule release, all relating to the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The three final rules relate to (a) the registration of swap dealers and major swap participants, (b) business conduct standards for swap dealers and major swap participants and (c) the protection of cleared swaps customer contracts and collateral. The CFTC also (d) delegated authority over registration of swap dealers and major swap participants to National Futures Association and (e) proposed a rule on prohibitions and restrictions on proprietary trading and certain interests in, and relationships with, hedge funds and private equity funds (i.e., the so-called “Volcker Rule”).
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- Investment Funds, Advisers and Derivatives
- Securities and Futures Regulatory
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January 30, 2012
FTC Announces HSR Premerger Notification and Clayton Act § 8 Thresholds
The Federal Trade Commission has announced the most recent annual adjustments to the Hart-Scott-Rodino Act premerger notification thresholds (effective February 27, 2012) and the thresholds that apply to interlocking directorates under Section 8 of the Clayton Act (effective January 27, 2012).
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- Investment Funds, Advisers and Derivatives
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January 27, 2012
Guidance on New W-2 Reporting Requirement for Health Coverage Cost
On January 3, 2012, the Internal Revenue Service issued additional guidance on the requirement that employers begin for 2012 reporting the cost of each employee’s group health plan coverage on Form W-2. Employers subject to the requirement will need to make a number of decisions in complying with the requirement and are strongly encouraged to implement mechanisms now to properly capture this year’s cost.
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January 27, 2012
HIRE Act’s Revocation of TEFRA Exception for Bearer Bonds Effective March 19, 2012
Effective for issuances occurring on or after March 19, 2012, the Hiring Incentives to Restore Employment Act (the “HIRE Act”), which was signed into law by President Obama on March 18, 2010, repeals the “foreign targeted obligation” (or “Eurobond”) exception established by the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) to the adverse U.S. tax rules applicable to bearer debt instruments. As a result of the repeal, beginning on March 19, 2012, U.S. companies generally will be effectively precluded from issuing bearer debt securities. This client update provides an overview of the consequences to U.S. and non-U.S. issuers and to bondholders of the repeal of the Eurobond exception.
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- Tax Aspects of Securitization
- Tax Aspects of Capital Markets Transactions
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January 27, 2012
New EU Data Protection Regulation Announced
A proposed EU Data Protection Regulation was announced by the European Commission in Brussels this week. As proposed, the Regulation will have a significant impact on almost every business in the EU and non-EU businesses that have EU customers. The proposed Regulation introduces fines of up to 2% of annual worldwide turnover. It will also require many businesses to appoint data protection officers and undertake detailed privacy impact assessments among many other obligations. The proposed Regulation also introduces new rights for individuals, including a right to have their personal data deleted and for the data to be transferred to a new service provider. Consumer organisations can also make complaints to supervisory authorities and bring class actions on behalf of individuals for non-compliance with the proposed Regulation.
For further information on this development and other EU data protection requirements please contact John Casanova or William Long in London.
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- Privacy, Data Security and Information Law
- Financial Institutions Regulatory
- Corporate Governance and Compliance
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January 2012
Private Clients, Trusts & Estates Group Newsletter
Private Clients, Trusts & Estates Group Newsletter - January 2012
The following articles are included in the Newsletter:
Charitable Lead Annuity Trusts (CLATs): Passing Down Wealth and Philanthropic Values; Tax Consequences of Civil Unions and Same-Sex Marriages; 2012 Transfer Tax Exclusions; Florida Powers of Attorney; Illinois Powers of Attorney; Gift Tax Rules
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- Trusts, Estates and Not-for-Profits
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January 26, 2012
EU Broadens Sanctions Against Iran and Syria
On 23 January 2012, the European Union (EU) adopted a set of new sanctions designed to complement and reinforce the restrictive measures already in place against Iran and Syria.
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January 26, 2012
SEC Issues Much Anticipated Investment Adviser “Umbrella” Registration Guidance
On January 18, 2012, the Division of Investment Management of the Securities and Exchange Commission issued a no-action letter updating guidance on “umbrella” registration and the circumstances in which affiliated investment advisers may rely on a single registration on Form ADV. This update describes the conditions on such reliance set forth in the letter and their implications for investment advisers and their affiliates.
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- Investment Funds, Advisers and Derivatives
- Private Equity and Venture Capital Funds
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January 20, 2012
Major New China Developments for Western Manufacturers
This Global Life Sciences: China Update will cover the following two topics:
- China Issues Five-year Plan for Pharmaceutical and Medical Device Industries
- SFDA GMP Work Plan Encourages M&A and Technology Transfer Transactions Involving Local Drug Manufacturers
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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January 17, 2012
Hosanna-Tabor: The Supreme Court Recognizes The Ministerial Exception To Employment Discrimination Laws
The Supreme Court’s unanimous opinion in Hosanna-Tabor v. EEOC recently provided helpful guidance to religious institutions by holding that ministers may not use employment discrimination laws to challenge religious institutions’ employment actions. The opinion by Chief Justice Roberts marked the first time that the Supreme Court acknowledged this constitutional “ministerial exception” from anti-discrimination laws. Although the Supreme Court noted that the scope of the ministerial exception would develop over time, it identified a number of guideposts to aid the lower courts in determining who qualifies under the ministerial exception. Religious institutions should consider reviewing their employment practices to ensure maximum protection in light of this new guidance.
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- Labor, Employment and Immigration
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January 13, 2012
British Bankers' Association Releases Guidance on the UK Bribery Act 2010
On 20 December 2011, the British Bankers’ Association released its guidance document for the banking sector on compliance with the UK Bribery Act 2010. The guidance is aimed at assisting banks in establishing policies and procedures to combat bribery and corruption. This update summarises the key points in the guidance and highlights some areas which were not dealt with as fully as may have been hoped.
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January 12, 2012
Anti-Corruption Quarterly Newsletter
Sidley Austin LLP is pleased to distribute its fourth 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.
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- Complex Commercial Litigation
- Securities and Futures Regulatory
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January 12, 2012
China Issues New Rules to Tackle Conflict of Interest of Healthcare Government Officials
On December 26, the Chinese Ministry of Health (MOH) issued the Rules on Prohibition of Conflict of Interest for Healthcare Officials. The Rules impose restrictions on healthcare government officials’ activities in connection with business operations of drug and device manufacturers. Companies operating in China should review carefully their interactions with and employment of healthcare government officials to ensure compliance and add this to FCPA and anti-bribery reviews.
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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January 12, 2012
SEC Finalizes Net Worth Standard for Natural Person Accredited Investors
On December 21, 2011, the Securities and Exchange Commission adopted certain amendments to the “accredited investor” standards to implement Section 413(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This update describes these amendments and includes suggestions for compliance, which must occur before February 27, 2012.
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- Investment Funds, Advisers and Derivatives
- Securities and Futures Regulatory
- Private Equity and Venture Capital Funds
- Private Real Estate Funds
- Securities Regulatory Aspects of Transactional Work
- Securities Regulatory Compliance Counseling
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January 11, 2012
Chinese Government Publishes Vaccine Supply System Development Plan
On December 22, the State Council of China published the Vaccine Supply System Development Plan. The Plan covers the period from 2011 to 2015, taking into account the need before 2020.
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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2012
2012 Insurance and Reinsurance Law Report
For more than fifteen years, 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. This year the title has been 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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- Insurance/Reinsurance Disputes
- Insurance and Reinsurance Litigation
- Financial Services/Consumer Class Actions
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January 10, 2012
January Edition of Notable Cases and Events in E-Discovery
This month’s Notable Cases and Events in E-Discovery include discussion of a United States District Court for the Southern District of New York pilot program designed to improve judicial oversight of complex civil cases, including a number of e-discovery provisions, and a Kansas Supreme Court ruling that, in the absence of a duty to preserve, a party was not guilty of spoliation when it intentionally destroyed evidence it knew was relevant to an ongoing lawsuit to which it was not a party.
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- Complex Commercial Litigation
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January 10, 2012
New York Wage Act Requires Annual Notice Requirements
The New York Department of Labor recently imposed new wage rate notice requirements, with the passage of the New York Wage Theft Prevention Act. Pursuant to the new law, all private sector employers with employees in the state of New York must provide New York employees with wage rate notices that include specific compensation information. Employers must provide current employees with this information no later than February 1, 2012.
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- Labor, Employment and Immigration
- Labor and Employment Class and Collective Actions
- Employment Discrimination Litigation
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January 9, 2012
AT&T Mobility v. Concepcion Notwithstanding, the National Labor Relations Board Finds That Class Action Waivers Are an Unfair Labor Practice
The National Labor Relations Board held, in the case of D.R. Horton and Michael Cuda, that it is an unfair labor practice for employers to require employees who are covered by the National Labor Relations Act to sign an arbitration agreement that waives their right to file joint or class claims. The NLRB’s decision is a blow to companies hoping to extend the Supreme Court’s decision in AT&T Mobility v. Concepcion to the employment context.
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- Labor, Employment and Immigration
- Labor and Employment Class and Collective Actions
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January 9, 2012
European Court rules on Access to Statements of Contents of European Commission Cartel Files in Civil Antitrust Damages Actions
In a December 2011 ruling , the General Court of the European Union held that the European Commission should disclose the statements of contents of its cartel case files to private plaintiffs in “follow-on” civil antitrust damages actions in Europe, upon motivated request. Although the ruling does not require the Commission to disclose the actual documents in its file, it facilitates discovery of at least some of those documents in domestic litigation. Indeed, plaintiffs will be able to use the statements of contents to identify and seek discovery of specific documents listed in the statements.
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January 8, 2012
SEC Guidance Relating to Sovereign Debt and Other Exposures in Europe
On January 6, 2012, the SEC’s Division of Corporation Finance issued important guidance to registrants (primarily financial institutions) relating to their disclosures concerning European sovereign debt. The guidance, which is effective immediately, applies to both US registrants and foreign private issuer registrants. Issuers should comply with the guidance in future SEC filings and, if considering an offering in the immediate future, should review their existing filings to determine if further disclosures are appropriate. The Division’s guidance is also of potential importance to issuers of 144A and other non-registered securities. Please contact a Sidley lawyer if you require further information.
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- Preferred and Capital Securities
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January 6, 2012
New York Becomes the Latest State to Adopt a Version of Section 711 of the Insurer Receivership Model Act
New York becomes the latest state to adopt a version of the Section 711 of the Insurer Receivership Model Act. Counterparties to derivative transactions with New York-domiciled insurers now will be provided additional protections if any such insurer becomes subject to an insolvency proceeding.
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January 5, 2012
FDA Issues Interim Final Rule Requiring Sole Drug Manufacturers to Report Temporary Production Halts
On December 19, 2011 the Food and Drug Administration (FDA) published in the Federal Register an interim final rule aimed at improving the Agency’s awareness of impending drug shortages. The rule comes in response to an Executive Order issued by President Obama in October directing FDA to “take steps that will help to prevent and reduce current and future disruptions in the supply of lifesaving medicines” and noting that timely advance notification of shortages to FDA and the public is an important element of mitigating such disruptions.
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- Compliance Counseling - FDA
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January 5, 2012
Recent Developments in the Export Controls and Sanctions Area
There have been a number of significant developments in the area of export controls and sanctions regimes, which should be of interest to companies with global operations.
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January 4, 2012
China Drug Supply Chain and GxP Update
This update includes information on the following topics:
- SFDA Publishes Further Proposed Revisions to Drug GSP for Comment
- China Completes Seven Overseas GMP Inspections in 2011
- China Heightens Crackdown on Counterfeit Drugs
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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January 4, 2012
FDA Request for Comments on Timing For Implementation of Safety Labeling Changes
On December 20, 2011, the U.S. Food and Drug Administration (FDA) published a notice requesting public input on the deadlines for implementing drug safety labeling changes. FDA’s request refers specifically to the timeframes in which manufacturers should implement safety labeling changes and the circumstances in which it is appropriate for products with existing labeling to remain in distribution when a labeling change is made. Comments are due by February 21, 2012.
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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January 3, 2012
China Further Revises Rules for Foreign Investment in Pharmaceutical Industry
On December 24, 2011, China’s National Development & Reform Commission (NDRC) published the amended Industry Catalogue for Foreign Investments (the Catalogue). Initially promulgated in the early 1990’s, the Catalogue classifies foreign investments in various industries into four categories (Encouraged, Restricted, Permitted and Prohibited) and has been the key regulation defining the regulatory landscape of foreign investments in China. While the amended Catalogue does not significantly alter the life sciences industries’ rules, a number of changes are worth noting.
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January 3, 2012
New California State Legislation Requires Prop 39 Audits to be Submitted By March 31 to Citizens’ Oversight Committee
SB 423 was recently enacted to require school districts, community college districts or the county office of education to submit its Prop 39 general obligation bond annual, independent financial and performance audit for the preceding fiscal year to its citizens’ oversight committee by March 31 of each year.
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January 3, 2012
Preview of New 2012 California Labor and Employment Laws
As we enter 2012, employers in California are faced with a number of significant new obligations imposed by recently passed legislation and NLRB decisions. Prudence dictates that employers review their human resources policies to ensure compliance with these laws and decisions.
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- Labor, Employment and Immigration
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December 28, 2011
Extension of Temporary Registration Rule for Municipal Advisors
The Securities and Exchange Commission is amending Rule 15Ba2-6T, which provides for the temporary registration of municipal advisors under Section 15B of the Securities Exchange Act of 1934 to extend the date on which the Rule will terminate from December 31, 2011 to September 30, 2012. As a result, the registration of any municipal advisor who is temporarily registered pursuant to the Rule as of December 31, 2011 will be automatically extended without the need for further affirmative action by the municipal advisor.
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- Investment Funds, Advisers and Derivatives
- Private Equity and Venture Capital Funds
- Private Real Estate Funds
- Securities and Futures Regulatory
- Securities Regulatory Aspects of Transactional Work
- Securities Regulatory Compliance Counseling
- Securities Regulatory Investigations and Examinations
- Securities/Commodities Industry Strategic Business Transactions
- Public Finance Derivatives
- Public Finance Securitization
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December 22, 2011
European Unitary Patent Protection
The legislative package for the creation of a European Unitary Patent and Patent Court is coming closer to approval and the first Unitary Patents could be granted as early as 2013. This package has the potential to dramatically reduce the costs associated with patent filing and litigation in Europe, but it is not without problems. This alert discusses current political problems, the legislation under consideration, criticisms of the package and the timetable for implementation.
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- Intellectual Property Litigation
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December 22, 2011
Falsified Medicines Directive – Public Consultation on “Safety Features”
The European Union’s Falsified Medicines Directive (2011/62/EU) aims to improve drug safety by introducing measures to prevent falsified medicines entering the legal supply chain. “Safety features” will be required to be placed on packaging to enable product verification. There is currently a consultation on the nature of these safety features. This alert discusses this aspect of the Directive, the consultation and the next steps in the process.
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December 22, 2011
Landmark WTO Government Procurement Agreement Opens New Markets for Contractors and Suppliers
On December 15, 2011, negotiators at the World Trade Organization (WTO) Ministerial Conference session in Geneva concluded a landmark trade agreement that will expand international competition in the government procurement sector. This new accord comes in the form of revisions to the WTO Government Procurement Agreement (GPA), which safeguards the access of foreign suppliers to government contracts in 42 countries worldwide.
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December 21, 2011
CMS Seeks Comments on its Long-Awaited Sunshine Act
The Centers for Medicare & Medicaid Services (“CMS”) recently published a proposed rule implementing the Physician Payment Sunshine Act (section 6002 of the Affordable Care Act). Comments on the Proposed Rule will be accepted until February 17, 2012. This Client Update highlights significant issues upon which CMS is actively soliciting comments.
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December 21, 2011
DDTC Proposes Long-Awaited Changes to Defense Trade Brokering Rules
On December 19, 2011, the U.S. State Department’s Directorate of Defense Trade Controls proposed long-awaited changes to the rules governing the brokering of defense articles and defense services under the International Traffic in Arms Regulations. The proposed changes entail far-reaching changes to the brokering requirements, as well as certain related requirements applicable to manufacturers and exporters of defense articles and defense services. Comments on the proposed changes are due by February 17, 2012.
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December 20, 2011
EU Issues New Export Authorizations for Dual-Use Goods
Under the EU export control framework, the export of dual-use goods and technologies (those that can be used for both civil and military purposes) is subject to prior authorization. Controlled items may not leave the EU customs territory without an export authorization. Currently, there are four types of export authorizations.
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December 20, 2011
U.S. Court of Appeals Invalidates Application of Anti-Subsidy Law to China and Other Non-Market Economy Countries
On December 19, 2011, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued a landmark decision invalidating the application of U.S. anti-subsidy, or countervailing duty (CVD), law to non-market economy countries (NMEs), including China. Barring intervention by the U.S. Supreme Court or the U.S. Congress, this decision will halt or overturn scores of CVD proceedings involving China, profoundly impacting the administration of trade remedies in the United States. However, an immediate suspension of pending investigations and reviews or unwinding of existing orders is unlikely.
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- Antidumping, Countervailing Duties and Trade Remedies
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December 13, 2011
New California Website Disclosure Law On Human Trafficking And Slavery Applicable To Retailers And Manufacturers
SB 657, the “Transparency in Supply Chains Act of 2010” requires certain retailers and manufacturers to post on the homepage of their Internet Website a “conspicuous and easily understood link” to a disclosure detailing whether, and to what extent, they investigate or monitor slavery or human trafficking in their “direct” product supply chains. SB 657 mandates certain statements on this topic, detailed in this update.
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- Labor, Employment and Immigration
- Privacy, Data Security and Information Law
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December 13, 2011
New EU Data Protection Regulation to have Significant Impact on Life Sciences
A draft EU Regulation on Data Protection was released un-officially last week. The Regulation, which is unlikely to become law until 2014 at the earliest, will replace the existing EU data protection regime and will have significant implications for the life sciences industry including fines of up to 5% of the annual worldwide turnover.
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December 12, 2011
MF Global and MF Global UK: What Every End-User of Futures and OTC Derivatives Should Be Thinking
The collapse of MF Global has raised a number of concerns primarily in the context of futures but equally likely to apply to cleared OTC derivatives. Clearinghouse standards and the mechanisms for transferring (or ‘porting’) positions and collateral related to cleared swaps are not fully developed and are yet to be tested by a futures commission merchant or clearing member insolvency. In the U.S., the shortfall in customer assets has exposed flaws in the regulatory framework and gaps in the regime for prudential supervision. In the UK, the failure of MF Global UK has highlighted certain problems with porting of positions and collateral to new clearing members as well as the risks associated with principal-to-principal clearing models. This update summarizes these issues and proposes some ideas that could help to mitigate the potential risks.
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- Investment Funds, Advisers and Derivatives
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December 12, 2011
OFAC Lifts Sanctions Affecting South Sudan
On December 8, 2011, the Office of Foreign Assets Controls (OFAC) issued a final rule lifting sanctions on South Sudan’s petrochemical sectors and authorizing transshipments of goods, technology and services to South Sudan through Sudan. These changes come in the form of two new general licenses under the Sudanese Sanctions Regulations and are designed to open the door to trade and investment in South Sudan following that country’s political independence.
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December 8, 2011
CFPB Proposes Two-Page Credit Card Agreement
On December 7, 2011, the Consumer Financial Protection Bureau (“CFPB”) announced a new “Know Before You Owe” project. The stated goal of the project is to simplify credit card agreements, to create greater consumer understanding of the prices, risks, and terms of credit cards.
The centerpiece of the new project is a prototype two-page credit card agreement. The short agreement is intended to convey the key terms of a credit card to a consumer. The agreement does not contain all of the contractual details that are typically found in a cardholder agreement today, including some that are required by regulation, and instead refers to a list of standardized definitions that the CFPB has also released.
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- Financial Institutions Regulatory
- Financial Institutions Business Transactions
- Financial Institutions Counseling
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December 8 , 2011
December Edition of Notable Cases and Events in E-Discovery
This month’s Case Notes include discussion of a Ninth Circuit decision finding that the terms of the Electronic Communications Privacy Act prohibit disclosure of a foreign citizen’s emails to third parties in response to a civil subpoena and a Pennsylvania federal court ruling providing guidance on e-discovery costs recoverable by a prevailing party.
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- Complex Commercial Litigation
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December 8, 2011
SEC Changes Review Procedures for Offerings by Foreign Issuers
The SEC has just announced that its Division of Corporation Finance has changed its practices for examining draft versions of Securities Act registration statements for foreign issuers. For more than twenty years, the staff has accepted drafts of registration statements as correspondence, without any public filings or other submissions to EDGAR. The drafts were reviewed in substantially the same manner as publicly-filed documents. The staff would provide comment letters to the issuer and review amended drafts responding to the comments. Under this procedure, a foreign issuer could complete the entire examination process before any public filing under the Securities Act.
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December 7, 2011
Financial Crimes Enforcement Network FAQs
On November 2, 2011, the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) released a set of Frequently Asked Questions (“FAQs”) to assist providers and sellers of prepaid access in understanding certain aspects of the final prepaid access rule that FinCEN issued on July 29, 2011 (“Prepaid Access Rule”). FinCEN makes clear that the FAQs are intended to provide interpretive guidance only, and do not supersede or replace any aspect of the Prepaid Access Rule. We discuss below certain aspects of the guidance that the FAQs provide with respect to the Prepaid Access Rule.
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- Financial Institutions Regulatory
- Retail Financial Services
- Financial Institutions Counseling
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December 6, 2011
Reporting U.S. Ownership of Foreign Securities on Treasury's TIC Form SHC
Certain U.S.-resident custodians and end-investors, including investment funds, that have holdings of foreign securities will be required to file a Report of U.S. Ownership of Foreign Securities, Including Selected Money Market Instruments (“Form SHC”) by March 2, 2012, to reflect their holdings as of December 31, 2011. Form SHC is a benchmark survey conducted every five years to collect data on U.S. ownership of foreign securities as part of the Treasury International Capital (“TIC”) reporting system. The reported information is used by the U.S. government in computing U.S. balance of payments accounts and international investment positions, and formulating international economic and financial policies. This update provides an overview of Form SHC reporting requirements for U.S.-resident entities that may need to prepare and file the report.
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- Financial Institutions Regulatory
- Investment Funds, Advisers and Derivatives
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December 6, 2011
SFDA Simplifies Clinical Trial Requirements for Certain Class II Devices
On November 24, 2011, the Chinese State Food and Drug Administration (SFDA) announced the Notice for Clinical Trial Waiver concerning Certain Class II Devices (Notice) with immediate effect. In the Notice, SFDA identified 21 types of Class II devices eligible for waiver of local registration trials, provided that the applicants for marketing authorizations can produce a comparative illustration of the device under application with the same type of device which has been approved by SFDA. Such comparative illustration must include information about the functional mechanism, product materials, structural composition, primary technical performance indicators, methods for sterilization (if applicable), expected uses, and whether intended for household uses.
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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December 5, 2011
EU Strengthens Syrian Sanctions
On 1 December 2011, the European Union decided to exert additional pressure on the Syrian Government by imposing a new set of economic sanctions.
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December 5, 2011
SEC Announces Record Number of Enforcement Actions
With significant publicity, the U.S. Securities and Exchange Commission announced several weeks ago that it had filed the most enforcement actions in a single year in SEC history. For the fiscal year ending September 30, 2011, the SEC stated it filed a record 735 enforcement actions, with more than $2.8 billion in penalties and disgorgement ordered.
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- Accountants/Professional Service Firms Liability
- Securities and Futures Regulatory
- Financial Reporting and Disclosures
- Investment Advisers and Mutual Funds
- Private Securities Litigation
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December 2, 2011
Lehman Update: Post-Confirmation Claims Trading
On December 6, 2011 the Third Amended Joint Chapter 11 Plan of Lehman Brothers Holdings Inc. and its Affiliated Debtors dated August 31, 2011 (the “Plan”) is expected to be confirmed by the United States Bankruptcy Court Southern District of New York. The Plan is supported by the official committee of unsecured creditors and more than 150 Lehman creditors, including 87 foreign Lehman affiliates, holding over $450 billion of unsecured claims have agreed to vote to confirm the Plan by signing plan support agreements. The anticipated confirmation of the Plan will likely generate significant trading of Lehman claims.
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- Corporate Reorganization and Bankruptcy
- Corporate Governance and Compliance
- Financial Institutions Regulatory
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December 1, 2011
Section 457A Amendment Deadline Approaching
Sections 409A and 457A of the Internal Revenue Code significantly revised the rules applicable to nonqualified deferred compensation arrangements and imposed substantial penalties for failures to comply with the new requirements. As described below, the deadline for adopting certain amendments to these arrangements to comply with Section 457A is December 31, 2011. If necessary amendments are not adopted or the requirements of Section 457A are otherwise not satisfied, the income deferred under these arrangements may be subject to a 20% additional tax and the recognition of such income may be accelerated.
Section 457A applies to deferred compensation arrangements between a service provider subject to U.S. income tax and a tax-indifferent service recipient, such as an offshore investment vehicle. The Section generally applies to compensation attributable to services performed after 2008. Deferred compensation attributable to services performed before 2009 (“Grandfathered Amounts”) generally must be paid by the later of (a) the last taxable year beginning before 2018 or (b) the first taxable year in which the Grandfathered Amounts are no longer subject to a substantial risk of forfeiture.
The time or form of payment of Grandfathered Amounts may be amended to comply with the Section 457A payment deadline without violating the other restrictions of Sections 409A and 457A, provided that the amendment is set forth in a written instrument and is effective on or before December 31, 2011. Thus, if you have any deferred compensation arrangements covering Grandfathered Amounts, any amendments to those arrangements needed to comply with Section 457A must be adopted by the end of this year.
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- Investment Funds, Advisers and Derivatives
- Private Equity and Venture Capital Funds
- Private Real Estate Funds
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November 30, 2011
U.S. Technologies and Trade Secrets at Risk in Cyberspace
In its report to Congress dated October 2011, “Foreign Spies Stealing U.S. Economic Secrets in Cyberspace,” the U.S. National Counterintelligence Executive (“NCIX”) provided harrowing details regarding the pervasive and growing threat of economic cyber-espionage being conducted against U.S. corporations. Foreign perpetrators—identified in the report as emanating primarily from China and Russia—are described as targeting American companies to obtain sensitive intellectual property, technology data and other business secrets.
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- Privacy, Data Security and Information Law
- Information Security and Data Breaches
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November 29, 2011
IOM Report Recommends FDA Prepare to Regulate Health IT
On November 10, 2011, the Institute of Medicine released a report, Health IT and Patient Safety: Building Safer Systems for Better Care, which evaluates the benefits and risks associated with health IT. According to the report, the current lack of federal oversight for health IT puts patients at risk. The report recommends the creation of a new agency to oversee health IT adverse event reporting and advises the U.S. Department of Health and Human Services (HHS) to lay the groundwork for future U.S. Food and Drug Administration (FDA) oversight in the event other recommendations prove inadequate to protect the public.
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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November 29, 2011
USCIS Announces H-1B Cap Has Been Reached
This Immigration Update contains news regarding the following recent developments in business immigration and E-Verify:
- H-1B cap reached
- Movement of bills to create E-Verify mandate and to eliminate per-country green card limitations
- Employer ordered to pay H-1B wages for failure to pay return transportation
- Procedural USCIS developments, including new EAD card, electronic filing, and secure mail initiative
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November 28, 2011
China Issues Rules on Drug Pricing Investigation
On November 9, 2011, China’s National Development and Reform Commission (NDRC) released a regulation entitled Trial Measures for Investigation on Ex-Factory Prices of Drugs, which will enter into effect on December 1, 2011.
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November 23, 2011
United States Imposes New Sanctions Against Iran Aimed at Petroleum, Petrochemical, Banking and Nuclear Sectors
On November 21, 2011, the United States imposed a series of new sanctions against Iran in response to the recent alleged plot to assassinate the Saudi Ambassador in the United States and new findings by the International Atomic Energy Agency concerning Iran’s nuclear activities. Because the United States already maintains a nearly comprehensive embargo of Iran, these new sanctions primarily target non-U.S. persons with dealings involving Iran in the petroleum, petrochemical, banking and nuclear sectors. The sanctions are accompanied by complementary measures imposed by the United Kingdom and Canada, with additional jurisdictions expected to impose similar measures in the coming days.
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- Financial Institutions Regulatory
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November 22, 2011
ISS Publishes Policy Updates for 2012 Proxy Season
On November 17, 2011, Institutional Shareholder Services Inc. (“ISS”) published corporate governance policy updates to its benchmark proxy voting guidelines for the 2012 proxy season. The policy changes will apply to shareholder meetings held on or after February 2, 2012. The attached summary highlights what we believe the be the most significant policy updates.
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- Corporate Governance and Compliance
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November 22, 2011
SEC and CFTC Adopt Form PF Confidential Information Reporting Requirements
In a joint release issued on October 31, 2011, the SEC and the CFTC published new rules establishing confidential information reporting requirements on Form PF. SEC-registered investment advisers, and commodity pool operators or commodity trading advisors dually registered with the SEC and the CFTC, that advise one or more private funds and have at least $150 million of private fund regulatory assets under management as of the end of the most recently completed fiscal year will be required to file periodic reports on Form PF, subject to a two-stage compliance phase-in period. As adopted, Form PF includes a number of industry-friendly changes from the requirements as proposed, including an extension of the compliance dates. The information to be collected on Form PF is intended primarily for the use of the Financial Stability Oversight Council in monitoring and assessing systemic risk in the U.S. financial system.
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- Investment Funds, Advisers and Derivatives
- Private Equity and Venture Capital Funds
- Private Real Estate Funds
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November 21, 2011
Review of DDMAC / OPDP Warning and Untitled Letters By Therapeutic Category
Frequently cited therapeutic categories in the 115 warning and untitled letters issued by the Division of Drug Marketing, Advertising, and Communications and the Office of Prescription Drug Promotion since 2009 include antineoplastic agents, analgesics, genitourinary agents, and central nervous system agents.
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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November 18, 2011
FDA Issues Draft Guidance on Medical Device Studies
On November 10, 2011, the U.S. Food and Drug Administration (FDA) issued two draft guidance documents with the stated purpose of encouraging medical device research and innovation of significant risk medical devices. The draft guidances seek to provide more clarity regarding when FDA will permit an investigational device study to proceed even when FDA has outstanding concerns regarding the study and to describe new approaches that would permit the conduct of early feasibility studies based on less nonclinical data than would be required for other types of investigations. The draft guidances are consistent with FDA’s recently announced innovation initiative, but it is too soon to determine whether they will have their intended impact. The comment period ends on February 8, 2012.
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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November 18, 2011
Final Treasury Regulations Address Tax Treatment of Partnership Debt-for-Partnership Interest Exchanges
The Treasury Department has issued Final Treasury Regulations (the “Final Regulations”) providing guidance regarding the determination of discharge of indebtedness income of a partnership that transfers a partnership interest to a creditor in satisfaction of the partnership’s indebtedness (a “debt-for-equity exchange”). The Final Regulations also address the treatment of the creditor in such a debt-for-equity exchange. These Final Regulations modify and replace Proposed Treasury Regulations promulgated in 2008 addressing the same topic.
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- Private Equity and Joint Ventures
- Private Equity and Venture Capital Funds
- Tax Aspects of Bankruptcy
- Tax Aspects of Mergers and Acquisitions
- Tax Aspects of Capital Markets Transactions
- Investment Funds, Advisers and Derivatives
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November 16, 2011
MiFID II – an Analysis of the Commission Proposal
On 20 October 2011, the European Commission published its proposals for the revision of the EU Markets in Financial Instruments Directive (MiFID). MiFID has been implemented in EU Member States since November 2007. Following new developments in financial services across the EU and in line with the review requirement in the original MiFID text the Commission has called for wide-ranging changes with a view to updating the MiFID framework. This update provides an overview and analysis of the Commission proposal, known as “MiFID II”.
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- Securities and Futures Regulatory
- Financial Institutions Regulatory
- Investment Funds, Advisers and Derivatives
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November 15, 2011
The UK's Serious Fraud Office Announces New Whistleblowing Service
On 1 November 2011, the UK's Serious Fraud Office announced the launch of a new service to allow whistleblowers to report suspected fraud or corruption in confidence. The introduction of this new service for whistleblowers could bring us closer to the first corporate prosecution under the recently implemented UK Bribery Act 2010.
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November 10, 2011
DOJ Announces Plan To Release New FCPA Guidance
For the first time in the thirty-four years since the passage of the Foreign Corrupt Practices Act (Act), the Department of Justice (DOJ) will release general guidance on the Act’s criminal and civil enforcement provisions. Lanny Breuer, Assistant Attorney General for DOJ’s Criminal Division made the announcement on Tuesday, November 8, at the National Conference on the Foreign Corrupt Practices Act in Washington D.C. The Guidance will be released in 2012, and Breuer said that he “hope[d] [it] will be a useful and transparent aid” for companies. Breuer gave no further details.
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- Complex Commercial Litigation
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November 8, 2011
CFTC Position Limits Rulemaking
On October 18, 2011, the Commodity Futures Trading Commission (“CFTC”) adopted final regulations on position limits, revising the CFTC’s publication on January 26, 2011 of a proposed rule establishing a position limits regime for 28 exempt and agricultural commodity futures and options contracts and the physical commodity swaps that are economically equivalent to these futures and options contracts. The final position limits rule, made available on the CFTC’s website on October 26, 2011, will go into effect 60 days after the term “swap” is further defined pursuant to Section 721 of the Reform Act, both with respect to futures and options contracts and swaps that are economically equivalent, with one exception: Referenced Contracts that are not one of the nine “legacy” agricultural Referenced Contracts and that currently are not subject to CFTC position limits will be subject to the position limits final rules by order of the CFTC after the CFTC has received one year of open interest data on physical commodity cleared and uncleared swaps under the swaps large trader reporting rule. The CFTC has stated that it intends to adopt a final definition of “swap” before year-end, although, as with some of the other rulemakings, this definitional rulemaking could be delayed until 2012.
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- Securities and Futures Regulatory
- Investment Funds, Advisers and Derivatives
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November 8, 2011
Post-Issuance Compliance Procedures for Issuers
On August 11, 2011, the Internal Revenue Service (the “IRS”) released revisions to the section of the Internal Revenue Manual (the “2011 IRM Revisions”) that provides guidelines for the IRS’s voluntary closing agreement program (“VCAP”). The 2011 IRM Revisions create incentives for issuers and conduit borrowers to establish written post-issuance compliance procedures by providing that an issuer that has written procedures in place may receive more favorable treatment by the IRS under VCAP.
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November 7, 2011
November Edition of Notable Cases and Events in E-Discovery
This month’s Case Notes include a California federal court decision enforcing an SEC subpoena requiring an Internet service provider to turn over identifying information regarding the owner of an email account, a New York federal court decision addressing manner of production issues in a criminal proceeding, a Northern District of Illinois decision finding waiver of attorney-client privilege with respect to inadvertently produced privileged documents, and a New Jersey district court decision ordering a defendant to change his Facebook profile picture to include a prior photograph to allow plaintiff to print Facebook pages as they existed prior to changes made by defendant.
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- Complex Commercial Litigation
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November 4, 2011
SFDA Releases Proposed Revisions to China Drug Distribution Regulations
On October 14, 2011, the State Food and Drug Administration (SFDA) released another round of proposed revisions to the Administrative Measures for Drug Distribution License (Draft Measures) for public comment by November 30, 2011. The Draft Measures significantly raise the standards for setting up a drug distribution enterprise (especially wholesale enterprises) in China. This proposal further demonstrates SFDA’s continuing effort to strengthen the drug distribution sector and to usher in the “modern logistics industry.”
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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November 3, 2011
Proposed IRS Regulations Would Clarify Existing U.S. Federal Income Tax Rules Applicable to Foreign Governments’ Investment into the United States
The U.S. Internal Revenue Service has released proposed regulations (the “Proposed Regulations”) that would clarify in certain favorable respects the existing U.S. federal income tax rules applicable to certain U.S. investments made by foreign governments, directly or through their “controlled entities”. While the Proposed Regulations are applicable only after publication of final regulations in the Federal Register, taxpayers may rely on the Proposed Regulations in the interim period.
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- Tax Aspects of Mergers and Acquisitions
- Private Equity and Venture Capital Funds
- Private Real Estate Funds
- Investment Funds, Advisers and Derivatives
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November 3, 2011
SFDA Clarifies Requirements for Foreign Pre-Clinical Data
As more and more local drug applicants use pharmacological and toxicological data generated from foreign pre-clinical studies (the Foreign Pre-Clinical Data) to support their regulatory filings in China, SFDA recently stated that it will require local applicants to provide additional, notarized and legalized supporting documents to prove the reliability of the Foreign Pre-Clinical Data. Such documents include the GLP Compliance Statement and recent GLP inspection records concerning the foreign research institution, and documents proving that the compound being tested overseas is the same substance as the one the local applicant is utilizing.
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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November 2, 2011
SFDA Regulates Drug Administration in Medical Institutions
In order to regulate the safe use of drugs by medical institutions, SFDA promulgated Measures on Drug Supervision and Administration in Medical Institutions on October 11, 2011. This is the first time that SFDA has issued a regulation clearly asserting its authority over the administration of drugs by medical institutions. This new effort is presumably made in response to serious safety events caused by the use of counterfeit drugs used by a Shanghai hospital last year.
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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November 1, 2011
Insurance sector under renewed scrutiny by UK competition regulator
The insurance sector has recently come under renewed scrutiny by the UK’s competition regulator, the Office of Fair Trading, which has been consulting for a second time on undertakings given by motor insurance companies to modify an information exchange programme and assessing competition in the motor insurance market more generally.
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October 31, 2011
CMS Releases Highly-Anticipated Accountable Care Organization Final Rule
Embracing a series of measures designed to incentivize greater participation, the Centers for Medicare & Medicaid Services (“CMS” or the “Agency”) on October 20, 2011, released its final rule regarding Accountable Care Organizations (“ACOs”) under the Medicare Shared Servings Program (the “Final Rule”). This Final Rule contains a number of important changes from the proposed rule published by the Agency in the Federal Register on April 7, 2011 (the “Proposed Rule”), and is part of a multi-agency effort to implement the ACO provisions of the Patient Protection and Affordable Care Act. Additionally, on the same day, CMS and the Office of the Inspector General (“OIG”) jointly issued an Interim Final Rule which establishes waivers of certain fraud and abuse laws for ACOs. CMS and OIG are accepting comments on the Interim Final Rule for 60 days after it is published in the Federal Register on November 2, 2011.
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October 28, 2011
2012 On The Horizon – Employee Benefit Plan Action Items
Employers should review their employee benefit plans for changes that are required or desirable by year-end or in 2012. This Employee Benefits Update briefly highlights key year-end and 2012 action items for employee benefit plans that employers should consider.
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October 28, 2011
U.S. Customs Sets Rules for Statistical Sampling and Offsetting in Audits and Prior Disclosures
On October 25, 2011, U.S. Customs and Border Protection (CBP) issued a final rule providing for the use of statistical sampling in customs audits and prior disclosure proceedings. The revised regulations, which CBP describes as harmonizing its regulations with the agency’s current practices, also implement a 2002 amendment to the statute authorizing CBP audits by specifically allowing overpayments and over-declarations to offset underpayments and under-declarations in calculating any loss of revenue owed to CBP.
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October 27, 2011
CFTC Proposes Additional Delays in Effective Dates for Swap Provisions of Dodd-Frank
On October 18, 2011, the Commodity Futures Trading Commission proposed amendments to its previously issued order granting temporary relief from the effectiveness of certain statutory provisions enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The amendments would extend the effectiveness of the temporary relief for many provisions until July 16, 2012.
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- Investment Funds, Advisers and Derivatives
- Securities and Futures Regulatory
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October 27, 2011
SEC Adopts Form PF with a Number of Industry-Friendly Changes
On Wednesday, October 26, the SEC adopted new Rule 204(b)-1 under the Investment Advisers Act of 1940 which establishes new confidential information reporting requirements as set forth in new Form PF, for investment advisers registered, or required to be registered, with the SEC that advise one or more private funds. The SEC initially proposed the requirements jointly with the CFTC on January 26, 2011. As adopted, the requirements of Form PF differ in a number of respects from the requirements as proposed.
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- Private Equity and Venture Capital Funds
- Investment Funds, Advisers and Derivatives
- Private Real Estate Funds
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October 21, 2011
OIG Work Plan Initiatives for Pharmaceutical Manufacturers and Biotech Companies for Fiscal Year 2012
On October 5, 2011, the Office of the Inspector General of the U.S. Department of Health and Human Services (“OIG”) released its annual Work Plan for Fiscal Year 2012. The Work Plan provides valuable insight into the program areas that the OIG will target for audits and investigations. This year’s Work Plan describes several audit items of particular relevance to pharmaceutical manufacturers and biotech companies, and this Sidley Update outlines many of these items.
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October 18, 2011
FDA and CMS Announce Beginning of Parallel Review Pilot Program for Medical Devices
The Centers for Medicare & Medicaid Services (CMS) and the Food and Drug Administration (FDA) recently announced the implementation of a pilot program for parallel review of medical devices for FDA market approval and Medicare coverage. This program, proposed in September of 2010 and described in our update here, is described by the agencies as accelerating the development and availability of innovative new products and reducing the time between FDA marketing approval and CMS national coverage determinations. In particular, this program aims to address the common occurrence of innovators focusing solely on obtaining FDA approval without meeting regulatory requirements for Medicare coverage.
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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October 18, 2011
New SEC Guidance on Cybersecurity Risk Disclosures Highlights the Elevated Importance of Information Governance and Data Security Compliance Programs
The Securities and Exchange Commission has issued significant new guidance suggesting that public companies should evaluate disclosure of cybersecurity risks more closely. The guidance was released on October 13 by the Securities and Exchange Commission’s Division of Corporation Finance, which is responsible for review of public company filings. This publication follows Senator Jay Rockefeller’s recent request to SEC Chairman Mary Schapiro for issuance of such guidance, and Ms. Schapiro’s June response to Senator Rockefeller. In her response, the SEC Chairman indicated that more disclosure of cybersecurity risks could be appropriate. She stated that several existing regulations could require disclosure of actual cyber-attacks, but that potential cyber-attacks should also be disclosed in some circumstances. The new guidance confirms that, while no existing SEC disclosure requirement explicitly refers to cybersecurity risks and cyber incidents, existing disclosure requirements (including risk factors and management’s discussion and analysis) may impose an obligation on public companies to disclose such risks and incidents. Therefore, companies should engage in ongoing review of the adequacy of their disclosure relating to cybersecurity risks and cyber incidents. The update also includes a number of information governance recommendations.
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- Corporate Governance and Compliance
- Privacy, Data Security and Information Law
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October 17, 2011
Proposed Regulations Implementing the Volcker Rule
On October 11, 2011, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation issued a proposed rule implementing the requirements of new Section 13 of the Bank Holding Company Act of 1956 (the “BHC Act”), the so-called “Volcker Rule”. Section 13 was added to the BHC Act by Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Securities and Exchange Commission also proposed the same rule on October 12, 2011.
The proposed rule generally prohibits a “banking entity” from:
- engaging in proprietary trading for its own account,
- acquiring or retaining an ownership interest in or sponsoring a “covered fund”, and
- entering into certain relationships with a “covered fund”,
in each case, subject to various exceptions.
Comments on the proposed rule are due by January 13, 2012.
This client update addresses the proposed rule and exceptions, the clarifications in the rule for certain activities that banking entities may continue to engage in, such as underwriting, market-making and trading on behalf of clients, and includes a discussion of the impact of the proposed rule on securitization transactions.
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- Financial Institutions Regulatory
- Securities and Futures Regulatory
- Investment Funds, Advisers and Derivatives
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October 12, 2011
Delaware Insurable Interest Law Developments
On September 20, 2011, the Delaware Supreme Court issued an important opinion relating to the application of Delaware’s insurance laws to so-called “stranger originated life insurance.” Although the opinion is specific to Delaware law, it is nevertheless relevant to participants in the life settlement market because the Court’s analysis may provide persuasive reasoning to the courts of other states as they are presented with similar issues. This Sidley update discusses the opinion and its implications for the life settlement market.
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- Life Accumulation and Life Settlement Programs
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October 12, 2011
OFAC Eases Rules for Food Exports to Iran and Sudan
On October 12, 2011, the Office of Foreign Assets Controls issued general licenses authorizing the export and re-export of food to Iran and Sudan. Exporters who meet the terms of these new general licenses no longer need to apply for specific licenses under the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA). Non-food agricultural commodities, medicine and medical devices continue to require a specific license.
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October 11, 2011
New EU Food Labeling Rules Adopted
On 29 September 2011, the Council of the European Union adopted a new EU Regulation which overhauls the existing food labeling regime and imposes additional food labeling requirements aimed at providing more and better information for consumers.
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- Food, Drug, Device and Cosmetic Law
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October 10, 2011
California Legislature Passes Bill to Clarify Lobbyist Requirements for Marketers
California has enacted new legislation that clarifies lobbyist requirements imposed earlier this year on persons who market investment managers and their funds to California public pension plans. The bill is effective immediately.
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- Investment Funds, Advisers and Derivatives
- Private Equity and Venture Capital Funds
- Private Real Estate Funds
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October 7, 2011
Buy American Provisions in President Obama’s Proposed “American Jobs Act”
On September 12, 2011, President Obama submitted a legislative proposal entitled the “American Jobs Act of 2011,” designed to strengthen the economy and bolster job growth through tax relief, infrastructure investments, and assistance for unemployed workers. Republican reaction has been substantially negative, with House leadership indicating that the proposal as a whole may not be allowed to come up for a vote, so that perhaps only some portions will ever receive significant congressional attention. Nonetheless, it is noteworthy that the President’s proposed bill contains “Buy American” provisions for iron, steel and manufactured goods that are identical to the Buy American provisions passed in the American Recovery and Reinvestment Act of 2009 (“Recovery Act”).
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October 7, 2011
October Edition of Notable Cases and Events in E-Discovery
This Month’s Case Notes include discussion of a Maryland federal court decision by Magistrate Judge Paul Grimm upholding against a defendant’s privacy challenge a third party subpoena for the defendant’s cell phone text messages, telephone bills, and incoming and outgoing call records, a D. C. court ruling finding that privilege had been waived with respect to an inadvertently produced attorney-client communication, and a Virginia federal case rejecting claims of undue burden and expense and requiring production and restoration of backup tapes for review of potentially relevant emails.
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- Complex Commercial Litigation
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October 5, 2011
California Employers Are Closer to Receiving Clarity Regarding Meal and Rest Period Obligations
On October 4, 2011, the California Supreme Court moved one step closer to providing California employers with much-needed clarity regarding California’s meal and rest period rules. The Court set oral argument in Brinker Restaurant Corp. v. Superior Court of San Diego (Hohnbaum), the closely-watched meal and rest period case, for November 8, 2011. Accordingly, nearly two years since the Supreme Court took Brinker under review, employers can look forward to a Supreme Court decision by February 6, 2012.
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- Labor, Employment and Immigration
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October 3, 2011
Anti-Corruption Quarterly Newsletter
Sidley Austin LLP is pleased to distribute its third 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.
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- Securities and Futures Regulatory
- Complex Commercial Litigation
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September 30, 2011
The PRC Social Insurance Scheme to Cast Its Net on Foreign Employees and Their PRC Employers
As you might know, until recently, contribution into China’s social insurance scheme, which is comprised of: (1) basic pension, (2) basic medical insurance, (3) work-related injury insurance, (4) unemployment insurance, and (5) maternity insurance (the “Social Insurance Scheme”), was mandatory only for employed PRC citizens.
Effective July 1, 2011, the new Social Insurance Law of the PRC (“Social Insurance Law”) for the first time in PRC history announced in a thinly worded one line sentence that foreign employees will be required to participate in China’s Social Insurance Scheme. The Social Insurance Law did raise concern about the elevated cost of doing business in China, however, at the time of its issuance it was only viewed as a preliminary measure. The Provisional Measures on Foreign Workers Participating in Social Insurance in China (the “Measures”), which are due to take effect on October 15, 2011, signal that the authorities will in fact be pursuing this reform aggressively.
In this issue of our China Update, we will discuss the impact of the Social Insurance Scheme on PRC-based employers and their foreign employees, and address some commonly raised questions such as:
- Who are defined as “foreign employees” under the Social Insurance Scheme?
- How much are the social insurance premiums? Who is responsible for their payment?
- Are there any exemptions that would exclude employee or employer contributions into the Social Insurance Scheme?
- What are the employee benefits under the Social Insurance Scheme?
- What are the consequences for non-compliance?
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- Labor, Employment and Immigration
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September 30, 2011
U.S. Customs Considers Easing Rules on Post-Importation Price Adjustments in Related Party Sales
On September 23, 2011, U.S. Customs and Border Protection (CBP) announced that it is re-examining its approach to valuing imported merchandise from related parties and may decide to allow use of the transaction value basis of appraisement for entries that involve post-importation price adjustments, both upward and downward. Importers would have to use the reconciliation program under this new approach. CBP has requested comments from the public concerning this potential change, which could have far-reaching consequences for corporate groups. Comments are due by October 23, 2011.
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September 28, 2011
Office of Government Ethics Proposes To Severely Restrict Registered Lobbying Organizations From Hosting Free Educational and Social Events for Government Employees
The Office of Government Ethics (OGE) plans to amend its ethics regulations to extend certain restrictions on the acceptance of gifts by political appointees to career executive branch employees. The current restrictions regarding political employees are contained in Executive Order 13490, issued by President Obama in January 2009, which also instructed OGE to apply the restrictions as “necessary or appropriate . . . to all executive branch employees.”
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- Complex Commercial Litigation
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September 27, 2011
Are Your Contracts Ready for OTC Clearing and Collateral Segregation?
Many readers may already be familiar with the provisions in Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act that provide for mandatory clearing of certain OTC derivatives transactions and for segregation of client collateral for uncleared OTC derivatives. While the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) have recently announced delays in the promulgation of final rules under Title VII, it is apparent that many commonly traded types of swaps will, sooner or later, be subject to either the clearing or the collateral segregation requirements. Given the complexity of these arrangements, it is not too soon to think seriously about the contracts that will be necessary to accommodate these requirements.
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- Investment Funds, Advisers and Derivatives
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September 27, 2011
China Promulgates Device Safety Monitoring Guidance
On September 16, 2011, the State Administration of Food and Drug (SFDA) unveiled the Tentative Guidance for the Monitoring of Adverse Device Events (Guidance). The Guidance specifies how device manufacturers, distributors, healthcare institutions and individuals should perform reporting, monitoring and re-evaluation in accordance with the Tentative Administrative Rules for the Monitoring and Re-Evaluation of Adverse Device Events promulgated by SFDA in 2008 (2008 Device Safety Rules).
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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September 27, 2011
Court of Justice Affirms Primacy of EU in Suspending GMO Approvals
On September 8, 2011, the Court of Justice of the European Union issued its ruling in Monsanto and Others v French Ministry for Agriculture and Fisheries (joined cases C-58/10 to C-69/10). In its judgment, the Court examined the circumstances under which Member State authorities may temporarily suspend authorizations granted by the European Commission to place genetically modified organisms (GMOs) on the EU market.
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- Food, Drug, Device and Cosmetic Law
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September 27, 2011
Medicaid Recovery Audit Contractor Program
On September 16, 2011, the Centers for Medicaid and Medicare Services (“CMS”) issued a final rule that creates the Medicaid Recovery Audit Contractor program (“Medicaid RAC program”), as required by § 6411 of the Patient Protection and Affordable Care Act. The rule requires each State to enter into a contract with at least one Medicaid RAC in an effort to police payments made to providers under the Medicaid program. The Medicaid RAC program, which is modeled on a similar Medicare program, is designed to promote the integrity of the Medicaid program and is estimated to save over $2.1 billion in the next five years. The rule is set to take effect on January 1, 2012 and could have ramifications not only for providers, but also for manufacturers whose products are reimbursed by Medicaid agencies under bundled payment systems.
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- Healthcare Public Policy and Governmental Affairs
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September 26, 2011
Clinical Trials: New FDA/NIH Draft Guidance Would Permit Broader Patient Waiver
A September 19 draft guidance jointly issued by Food and Drug Administration (FDA) and National Institutes of Health’s Office for Human Research Protections (OHRP) would allow sponsors of clinical trials to require humans subjects to waive certain legal rights, including those related to biospecimens collected for research. This departure from longstanding interpretations by both OHRP and FDA is achieved through a more narrow interpretation of federal regulations prohibiting the inclusion of “exculpatory language” in informed consent documents.
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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September 26, 2011
Securities and Exchange Commission issues proposed rules under the Dodd-Frank Act’s prohibition on conflicts of interest for certain securitization participants
On September 19, 2011, the SEC approved proposed rules to implement Section 621 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”). Section 621 of the Dodd-Frank Act amended the Securities Act of 1933 to add Section 27B, which prohibits underwriters, placement agents, initial purchasers and sponsors (and their affiliates and subsidiaries) of asset-backed securities (as defined under the Securities Exchange Act of 1934) and synthetic asset-backed securities from engaging in any transaction for a period ending on the date that is one year following the date of the first closing of the sale of such securities that would involve or result in any material conflict of interest with respect to any investor in the transaction.
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- Aircraft and Other Equipment Finance
- Asset-Backed Securitization
- Risk Transfer and Insurance Securitization
- Financial Institutions as Credit Providers
- Hedge Funds as Credit Providers
- Workouts and Restructurings
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September 20, 2011
Amendments to Shareholder Proposal Rule Take Effect Making Way for Proxy Access Proposals
Today the SEC published a notice in the Federal Register announcing the effectiveness of its amendments to Exchange Act Rule 14a-8, the shareholder proposal rule. The amendments require a public company to include in its proxy statement, under certain circumstances, a shareholder proposal seeking to establish procedures in the company’s governing documents for including a shareholder’s director nominees in the company’s proxy materials. Accordingly, shareholders may now submit shareholder proxy access proposals for inclusion in 2012 proxy statements.
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- Corporate Governance and Compliance
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September 20, 2011
The EU proposes a radical overhaul of its GSP
The European Commission has issued a proposal to radically change the EU’s General System of Preferences (“GSP”). This newsletter outlines the three main GSP schemes; explains the main proposed changes to the GSP; sheds light on the interplay between GSP and the GSP rules of origin, which have recently undergone important changes (cumulation and self-certification); and provides examples of what GSP users and beneficiaries should now consider, both in practice and in contacts with decision-makers.
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September 19, 2011
FDIC Approves Rules Regarding Resolution Plans
On September 13, 2011, the Board of the Federal Deposit Insurance Corporation approved rules requiring the submission of resolution plans (so-called “living wills”) by certain domestic and foreign financial companies pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act and by certain FDIC-insured depository institutions. This client update summarizes the salient provisions of the rules.
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- Financial Institutions Regulatory
- Corporate Reorganization and Bankruptcy
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September 19, 2011
Proposed IRS Regulations Clarify Tax Treatment of CDS and Other Derivatives
The IRS has released proposed regulations that would treat credit default swaps as notional principal contracts under the Internal Revenue Code and would also allow derivative contracts that are based on objective non-financial information (such as weather derivatives) to qualify as notional principal contracts. The proposed regulations would also exclude notional principal contracts from the mark-to-market system of Section 1256 of the Internal Revenue Code.
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- Investment Funds, Advisers and Derivatives
- Tax Aspects of Capital Markets Transactions
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September 16, 2011
Changes Proposed to CLIA and HIPAA to Permit Patient Access to Test Reports
On September 14, 2011, the U.S. Department of Health and Human Services (HHS) published a proposed a rule that would allow patients and their personal representatives direct access to completed laboratory test results. This change is intended to reduce barriers to the exchange of health information and to encourage patients to have a more active role in their personal health care decisions.
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- Privacy, Data Security and Information Law
- Healthcare Information and Privacy
- Healthcare Public Policy and Governmental Affairs
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September 15, 2011
FDA Announces Two Pilot Projects for Improving Ways to Trace Sources of Foodborne Illness; FDA Will Solicit Stakeholder Input in Designing and Implementing the Pilots
On September 7, 2011, the U.S. Food and Drug Administration (FDA) announced that it is moving forward with two pilot projects—one for processed foods and the other for produce—designed to help the agency and the food industry, including farms, restaurants, and grocery stores, more rapidly and effectively trace products back to a contamination source during outbreaks of foodborne illness. FDA has commissioned the Institute of Food Technologists (IFT), a Chicago-based non-profit scientific society focused on food science and food technology, to implement the two pilot projects under the agency’s direction.
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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September 15, 2011
Securities and Exchange Commission Requests Comment on Proposed Rulemaking Related to Treatment of Asset-Backed Securities Transactions Under the Investment Company Act
Entities that constitute “investment companies” under Section 3(a)(1) of the Investment Company Act of 1940 (the “ICA”) are highly regulated under the ICA such that it would be effectively impossible to structure an asset-backed transaction to comply with its requirements. Because issuers of asset-backed securities generally meet the definition of an investment company under Section 3(a)(1), an exclusion from the ICA’s requirements is necessary. The SEC recently released an advance notice of proposed rulemaking (the “ANPR”) with respect to the treatment of asset-backed issuers under Rule 3a-7 under the ICA and Section 3(c)(5) of the ICA. Comments are due on the ANPR no later than November 7, 2011.
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- Mortgage-Backed Securitization
- Asset-Backed Securitization
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September 14, 2011
CFTC Proposes Compliance and Implementation Schedules for Clearing, Trade Execution, Documentation and Margin Requirements under Dodd-Frank and Provides Additional Guidance on Dodd-Frank Implementation Schedule
On September 8, 2011, the Commodity Futures Trading Commission approved notices of proposed rulemaking relating to the implementation timing of the clearing, exchange trading, documentation and margin requirements under the Dodd Frank Wall Street Reform and Consumer Protection Act. The proposed rules are designed to provide additional time for compliance and to facilitate the transition to the new regulatory regime for swaps in a manner that is not unduly disruptive. The CFTC also distributed an outline of final Dodd-Frank derivatives rules that the CFTC may consider during the remainder of 2011 and in the first quarter of 2012.
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- Investment Funds, Advisers and Derivatives
- Securities and Futures Regulatory
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September 13, 2011
The SEC Seeks Comment Related to the Status Under the Investment Company Act of REITs and Other Companies Engaged in the Business of Acquiring Mortgages and Mortgage Related Instruments
On August 31, 2011, the U.S. Securities and Exchange Commission issued a release relating to the treatment of companies engaged in the business of acquiring mortgages and mortgage related instruments under the Investment Company Act of 1940 (the “1940 Act”). The Release provides an overview of mortgage-related pools, including mortgage REITs, and requests data and comment on their management styles, corporate governance, and similarities to traditional investment companies. It also discusses the legislative, administrative and interpretive background of Section 3(c)(5)(C) of the 1940 Act, the statutory exclusion for such entities.
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- Private Equity and Venture Capital Funds
- Private Real Estate Funds
- Investment Funds, Advisers and Derivatives
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September 9, 2011
How to Navigate the Distressed “BISO”
Beginning on September 9, 2011, bank loan trades entered into on the basis of the Loan Syndication and Trading Association (the “LSTA”) Distressed Trade Confirmations are subject to Buy-in / Sell-out Provisions (“BISO Provisions”) similar to those already used in the LSTA Par/Near Par Trade Confirmation. The BISO Provisions may provide a “Performing Party” with a mechanism to expedite settlement if its trading partner is a “Non-Performing Party.” The BISO Provisions are set forth in Sections 16 through 19 of the LSTA Standard Terms for Distressed Trade Confirmations, published by the LSTA on September 9, 2011.
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- Corporate Reorganization and Bankruptcy
- Corporate Governance and Compliance
- Financial Institutions Regulatory
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September 8, 2011
California, Texas Amend Data Breach Notification Laws; Texas Expands Health Privacy Requirements
California and Texas have both significantly expanded statutes that require notifications in the event of a data breach, with Texas also creating significant new protections for health information that apply to a broader universe of entities than HIPAA. The California bill was signed by California Governor Jerry Brown after three vetoes from former California Governor Schwarzenegger. The new California data breach notification law mandates notification to the California Attorney General when a breach involves more than 500 Californians and also contains new content requirements for notification letters. Texas Governor Perry has signed into law a significant amendment of the Texas data breach notification law, which expands notification requirements by requiring notice to affected Texas residents and – in a novel requirement – affected residents of other states that have no data breach notification law. Governor Perry also approved significantly expanded health privacy requirements. The new Texas law could impose substantial costs and requirements on entities that have never before had to implement extensive protections for health information.
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- Privacy, Data Security and Information Law
- Healthcare Information and Privacy
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September 7, 2011
September Edition of Notable Cases and Events in E-Discovery
This Month’s Notable Cases and Events in E-Discovery includes a discussion of a Pennsylvania federal case in which a Magistrate Judge conducted an in camera review of plaintiff’s Facebook account and ordered plaintiff to produce specified information from that account in response to defendants’ discovery requests and a California court refused to impose sanctions against a defendant for producing documents from a proprietary database in a non-searchable PDF format, finding there was insufficient evidence that the defendant had converted the data to PDF format to intentionally hinder plaintiff’s ability to search the data.
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- Complex Commercial Litigation
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September 6, 2011
NLRB Pendulum Swings, Board Reverses Precedent Concerning Voluntary Recognition and Successor Employers
The National Labor Relations Board on August 30 announced two decisions reversing prior Board doctrine and strengthening the role of unions in the context of voluntary recognition of a labor union and successorship following a sale or merger. In these cases, the Board established that a union, either recognized voluntarily by an employer or as a result of the employer’s role as a successor, must be given a “reasonable period of time”—between 6 months and a year, depending on the circumstances—to negotiate with the employer before its representative status may be challenged.
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September 2, 2011
2011 Amendment to Japanese Code of Civil Procedure Concerning Jurisdiction over Actions on Property Rights with International Elements
Civil disputes over property rights that have international elements are on the rise because of further internationalization of economic activities. On April 28, 2011, the Japanese Diet passed an amendment to the Japanese Code of Civil Procedure and to the Japanese Civil Provisional Remedies Act that defines the jurisdiction of Japanese courts over such disputes. This Sidley update describes the background and the main features of this amendment which becomes effective in 2012.
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September 2, 2011
Labor Disputes in Japan: Overview of Substantive Law and Dispute Settlement Procedures
This Sidley update provides a brief overview of Japanese labor law, including the rules of employment, conditions justifying transfer, demotion or termination, workforce downsizing. basic employer-employee relations (except those involving labor unions) and settlement procedures for individual labor disputes.
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September 1, 2011
New EU Safety Reporting Guideline Enters into Force
As of 1 September 2011, sponsors of clinical trials must comply with the new clinical trial safety reporting requirements set out in the International Conference on Harmonisation E2F Guideline on Development Safety Update Reports.
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August 31, 2011
NLRB Posting Requirement Creates New Obligation for Private Sector Employers - Unionized or Not
On August 25, 2011, the National Labor Relations Board announced new requirements imposing affirmative obligations on almost all private sector employers in the United States, regardless of whether or not they are unionized. Effective as of November 14, 2001, all employers subject to the NLRB’s jurisdiction will be required to post a Board-sanctioned notice advising employees of their rights under the National Labor Relations Act.
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August 30, 2011
HHS Proposes Major Overhaul To Human Subjects Rules
The Department of Health and Human Services (HHS) issued an advance notice of proposed rulemaking (ANPRM) seeking public comment on significant proposed changes to the federal requirements governing research with human subjects, known as the “Common Rule”. Three proposed changes in particular—related to research with biospecimens, data security, and clinical trial monitoring—could affect pharmaceutical and medical device companies and other entities that sponsor research with human subjects. Comments on the ANPRM are due by October 26, 2011.
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August 26, 2011
UK Medicines Self-Regulatory Bodies Have Started Issuing and Enforcing Advertising and Pharmacovigilance Guidelines in Social Media Context
The UK’s medicines self-regulatory bodies have begun to issue and enforce guidelines on how EU and UK pharmaceutical advertising and pharmacovigilance laws apply to company-sponsored social media websites.
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August 25, 2011
AIFM Directive – Analysis of ESMA Consultation Paper on Third Country Issues
On 23 August 2011, the European Securities and Markets Authority (“ESMA”) published its consultation paper in relation to the “third country” aspects of the EU AIFM Directive. This Update considers ESMA’s proposals and provides insight on some of the issues raised.
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- Investment Funds, Advisers and Derivatives
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August 25, 2011
DDMAC Enforcement Webinar Highlights
Today the Division of Drug Marketing, Advertising, and Communications of the U.S. Food and Drug Administration regulatory counsel conducted the second in a planned series of quarterly web-enabled conference calls to discuss “enforcements” (warning/untitled letters) from the previous quarter, answering 26 questions in thirty minutes.
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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August 22, 2011
European Medicines Agency publishes new electronic submission format of information on medicines
The European Medicines Agency (“EMA”) has published the new electronic format in which pharmaceutical companies will need to submit information on medicinal products for human use authorized or registered in the European Union. The format is referred to as the EudraVigilance Medicinal Product Report Message (“EVPRM”).
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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August 22, 2011
Important U.S. Court Ruling on Scope of the Foreign Trade Antitrust Improvements Act
On August 17, 2011, the United States Court of Appeals for the Third Circuit issued an important decision regarding the scope of the Foreign Trade Antitrust Improvements Act (FTAIA). The Court interpreted the FTAIA in ways which may make it easier for plaintiffs to plead and prove antitrust violations based upon foreign conduct.
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- Corporate Governance and Compliance
- Complex Commercial Litigation
- Antitrust and Unfair Competition
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August 19, 2011
United States Tightens Sanctions Against Syria
On August 18, 2011, President Obama imposed further sanctions on Syria. The new sanctions block all property interests of the Government of Syria and prohibit many trade transactions by U.S. persons with Syria. These sanctions represent the strongest U.S. financial action taken against the regime of Syrian President Bashar al-Assad since the start of popular protests in Damascus earlier this year.
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V2011
I-797 Approval Notice and Travel Advisory
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- Labor, Employment and Immigration
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August 17, 2011
Joseph E. Price, Senior Vice President of Corporate Financing and Advertising Regulation at FINRA, Discusses the Use of Social Media Sites By Broker-Dealers and Their Registered Representatives at the SIFMA July Monthly Luncheon
On July 26, 2011, Joseph E. Price, Senior Vice President of Corporate Financing and Advertising Regulation at the Financial Industry Regulatory Authority, Inc. spoke at the SIFMA Compliance and Legal Society July Monthly Luncheon. Mr. Price discussed certain issues relating to the application of FINRA rules governing communications with the public to the use of social media sites by FINRA member firms and their registered representatives.
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- Securities and Futures Regulatory
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August 16, 2011
Business Concern Over New EU Consent Requirement to Use Website Cookies
Amendments to the EU’s ePrivacy Directive have meant that since 25 May 2011 the EU has required website operators to obtain consent of website users to use of cookies. This is a significant development and is causing considerable concern as businesses struggle to find practical ways to obtain consent and deal with the inconsistent implementation of the new law in different EU Member States.
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- Privacy, Data Security and Information Law
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August 15, 2011
China SFDA Imposes New Regulatory Requirements on Cross-border Pharmaceutical Contract Manufacturing Activities
On July 22, 2011, the China State Food and Drug Administration published a notice on strengthening its supervision over domestic contract manufacturing activities for foreign pharmaceutical manufacturers, with an aim to prevent export counterfeiting. The Notice imposes new regulatory measures on cross-border contract manufacturing which will affect current and future contract manufacturing arrangements made by foreign companies.
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- Food, Drug and Medical Device Compliance and Enforcement
- Food, Drug and Medical Device Regulatory
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August 9, 2011
The UK Agency Workers Regulations 2010
The United Kingdom Agency Workers Regulations 2010 will come into force on 1 October 2011. The Regulations introduce new rights for agency workers or “temps”, including access to collective facilities and to information about employment vacancies from the first day of their assignment and the right to the same pay and other basic working conditions as equivalent permanent staff of the hirer or end-user after a 12-week qualifying period. All employers who use temporary agency workers should be aware of the implications of the Regulations.
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- Labor, Employment and Immigration
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August 5, 2011
August Edition of Notable Cases and Events in E-Discovery
This Month’s Notable Cases and Events in E-Discovery include an order by U.S. District Judge Shira Scheindlin withdrawing her February 2011 ruling that certain metadata was part of an electronic record and should presumptively be included in any production in response to a Freedom of Information Act request and two separate Northern District of Illinois decisions ordering e-discovery cost shifting.
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- Complex Commercial Litigation
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August 4, 2011
Congress Approves Significant Reforms to the Controversial Consumer Product Safety Improvement Act
After more than two years of intractable partisan differences and inaction, on August 1, 2011 Congress sent the President legislation to reform the Consumer Product Safety Improvement Act (CPSIA), originally enacted in August 2008. The legislation includes provisions, such as changes to the controversial Consumer Product Safety Information Database created under the CPSIA that could benefit the broad spectrum of companies whose products are regulated by the five-member Consumer Product Safety Commission. Further provisions should benefit the all-terrain vehicle and bicycle industries, libraries, charities dealing in used children’s products, and various small businesses, including the handmade toy industry.
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August 4, 2011
New SEC Rule: Large Trader Reporting System
On July 27, 2011, the U.S. Securities and Exchange Commission issued a release adopting new “Large Trader” reporting requirements. The new rules have two primary components: (i) requirements for certain Large Traders (i.e., persons who exercise investment discretion over one or more accounts, and who effect transactions that in the aggregate exceed a determined activity level) to register with the SEC, and to disclose information concerning their ownership structures and businesses; and (ii) recordkeeping, reporting, and monitoring duties imposed on registered broker-dealers that service Large Trader customers. The deadline for the self-identification requirement for Large Traders (which will include advisors to both registered investment companies and private funds) is December 1, 2011. The deadline for broker-dealers, with respect to the recordkeeping, reporting, and monitoring requirements is April 30, 2012.
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- Securities and Futures Regulatory
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