Securities Law Related Blogs

Global 3 May 2024 – On 26 February 2024, the Financial Action Task Force announced it was considering revisions to Recommendation 16 (R.16), its Interpretive Note (INR.16) and the related glossary of specific terms, to adapt them to the changes in payment business models and messaging standards. The deadline for comments is 3 May 2024. EU 29 April 2024 – On 29 January 2024, the European Securities and Markets Authority launched public consultations on two sets of guidelines it is mandated to develop for the purpose of the application of the Regulation on Markets in Crypto-Assets. The draft guidelines cover reverse solicitation and the qualification of crypto-assets as financial instruments. Stakeholders have until 29 April 2024 to provide comments on the draft guidelines. 30 April 2024 – On 20 February 2024, the European Banking Authority (EBA) published a consultation paper to consult on the draft implementing technical standards amending Commission…

On 25 April 2024, the European Parliament issued a press release stating that it had adopted a first reading position on the proposed Directive on payment services and electronic money services in the Internal Market amending Directive 98/26/EC and repealing Directives 2015/2366/EU and 2009/110/EC and the proposed Regulation on payment services in the internal market and amending Regulation (EU) No 1093/2010.  The press release adds that MEPs of the next Economic and Monetary Affairs Committee remain free to choose whether to open negotiations based on the negotiating mandate as adopted by the April plenary or whether to draw up a new negotiating mandate. If they choose the first option, negotiations will be able to begin sooner.

On 26 April 2024, the Government published a further response to the House of Commons’ Treasury Committee Second Report on the Edinburgh Reforms. On 8 December 2023, the Treasury Committee published its Second Report 2023-24, Edinburgh Reforms One Year On: Has Anything Changed?. On 28 February 2024, the Economic Secretary to the Treasury committed to provide the Treasury Committee with a more detailed response to the Second Report’s recommendations. The supplementary response is appended to the report. In its Second Report, the Treasury Committee had questioned the validity of the government’s claims that welcoming consultations, establishing reviews or publishing documents should be considered reforms. In his response the Economic Secretary to the Treasury argues that reviews are a key part of the policy making process and that it would not have been appropriate to commit to more specific reforms at Edinburgh prior to this work being completed. He adds that…

On 26 April 2024, the FCA published a new webpage concerning its financial promotions quarterly data for Q1 2024. The webpage provides a summary of data generated between 1 January 2024 and 31 March 2024 from the FCA’s actions against firms breaching financial promotion rules, and referrals and investigations into unregulated activity. Among other things FCA interventions in Q1 2024 resulted in 2,211 promotions being amended or withdrawn by authorised firms. The FCA issued 597 alerts on unauthorised firms and individuals, 11% of these were clone scams. The FCA also reminds firms that on: 8 January 2024, the modification by consent – which delayed the start of the Direct Offer Financial Promotion rules – ended. 7 February 2024 the financial promotions approval gateway came into effect.

By Suzanne CosgroveThe Department of Labor this week issued a final rule that defines the role of an investment advice fiduciary for purposes of Title I and Title II of ERISA, categorizing a person as an investment advice fiduciary if they provide recommendations to investors on a regular basis as part of their job, or if they represent that they are acting as a fiduciary under Title I or Title II of ERISA, or both.The investment recommendations also must be provided “for a fee or other compensation, direct or indirect” as defined in the final rule, the DOL said.The Department said the updated final rule better reflects the text and the purposes of ERISA and better protects the interests of retirement investors, compared with the previous regulatory definition, which was last finalized in 1975.Read the rest of the story and other securities news from Wolters Kluwer at VitalLaw.com.

A recent lawsuit involving a buyer’s attempt to terminate a deal based on a seller’s alleged non-compliance with the purchase agreement’s financing cooperation covenant raises the question of when a buyer should have the right to walk away from a deal on that basis. Here’s a description of the lawsuit from this article in Weil’s […]

On 24 April 2024, the Payment Systems Regulator (PSR) published a Call for Views on its proposed approach to supervision. Background The PSR established a Supervision and Compliance Monitoring division last year, with the aim of driving compliance with the PSR’s requirements. Ensuring compliance has become increasingly important for the PSR as it uses its powers to boost competition, increase choice and tackle payment fraud. As such, the division aims to improve outcomes for everybody that uses payment systems by deterring and challenging poor practise within firms.  The PSR’s proposals Key aspects of the PSR’s proposed approach to supervision include: Through supervision and regular engagement, the PSR will have effective, ongoing relationships in place with the firms it regulates. It will be evidence-based in its supervision and will be guided by its remit and the regulatory framework that governs its work. The primary focus will be on the PSR’s…

Laura Graham was injured when she tripped over a sprinkler box located on property owned by a single member limited liability company.  She sued the LLC and asserted that its member was the alter ego of the LLC and the case was appealed to the Nevada Supreme Court, Ene v. Graham, 140 Nev. Adv. 26 (Apr. 18, 2024).   The Supreme Court reversed finding that substantial evidence did not support the trial court's alter ego determination.  The opinion makes several important points regarding the analysis of alter ego liability for LLCs: The alter ego analysis for for an LLC is the same as the analysis applied with respect to a corporation.  NRS 86.376 sets forth the elements required to support an alter ego finding with respect to an LLC.  It mirrors the language and elements of NRS 78.747 and simply replaces the term "corporation" with "limited liability company". NRS 86.376 was enacted after NRS 78.747 but the case…

A few years ago, I shared observations as I was heading out on parental leaves for my son and my daughter. Now, I’m gearing up for a different reason – thoracic surgery. Medical leaves are a reality for many, yet they’re rarely discussed openly. Here are my learnings in case they’re helpful to anyone else out there: 1. There is no perfect time. I know my career will endure a 6-week pause. That said, it’s tempting to try to wait for the “perfect time.” Right now is inconvenient because my practice has momentum, everything is going well, there are lots of events I want to attend and people I want to see. When it comes to things like this, there is never an ideal moment. But when it comes to your quality of life, you’ve got to play to win. Which brings me to… 2. Don’t neglect your health. Although this is a condition I’ve had my entire life, years of running and yoga helped me mask (but not eliminate) my symptoms.…

In this 21-minute episode of the “Women Governance Trailblazers” podcast, Courtney Kamlet & I interviewed Maryrose Sylvester, who is an Independent Director at Vontier Corporation, Flex, Waste Management, and Harley-Davidson and previously served in executive and leadership roles at General Electric for over 30 years. We discussed: 1. Maryrose’s transition from the corporate world to the public company board world, and how she evaluates board service opportunities. 2. What traits are essential to bring to the boardroom. 3. Methods for staying informed as a director on the latest industry trends and the broader business environment. 4. The most valuable lessons Maryrose has learned from board service. Advice for women who aspire to become directors. 5. Effective approaches to communicating and collaborating with fellow board members and with management teams. 6. How directors can measure and evaluate their own performance and impact as a board member. 7.…

Normally I spread out these podcast blogs, but since AI is moving at the speed of light and I am going out on a brief medical leave, I don’t want this episode to become obsolete before you see it. Check out this 17-minute episode of “Women Governance Trailblazers” – Courtney Kamlet & I interviewed Cassidy Donohue, who is Product Manager at Troop. Previously, Cassidy served as a Research Analyst for Engine No. 1 and as Lead Researcher for Accountable: The Rise of Citizen Capitalism. We discussed: 1. Cassidy’s background and career path – and what drew her to the field of corporate governance. 2. How Troop is setting out to change proxy voting through technology, including how the tools differ from traditional proxy voting recommendations and voting reports. 3. How Troop ensures that recommendations are correct. 4. Communication suggestions for companies and their advisors as investment stewardship teams enhance their use of AI to analyze…

The SEC (U.S. Securities and Exchange Commission) recently hosted the 2024 SEC Speaks conference in Washington, DC. During the event, SEC leaders, including the Chair, commissioners, and senior staffers, shared their views about key priorities and trends in the enforcement space. Senior leaders of the Enforcement Division emphasized the SEC’s enforcement results for 2023 — a year in which the SEC instituted a record number of enforcement actions and obtained almost $5 billion in financial remedies — and shared their perspectives on the year ahead. This alert summarizes key enforcement takeaways from the event. Overarching Enforcement Environment Gurbir Grewal, Director of the Enforcement Division, kicked off the conference with a keynote speech addressing the overarching enforcement landscape. He described the SEC as facing “significant headwinds” in enforcement efforts, including questions about the Commission’s authority and criticisms of…

On April 5, 2024, a jury in California federal court found a former corporate executive liable for insider trading in SEC v. Panuwat, a novel enforcement action involving a theory known as “shadow trading.” In Panuwat, the U.S. Securities and Exchange Commission (SEC) takes the position that the insider trading laws apply where an insider uses material non-public information about his or her own company to trade securities of another company, such as a competitor or peer company in the same industry. Key Takeaways The jury’s finding that the Panuwat defendant had breached his duty of trust and confidence to his employer, a public company, turned upon the wording of his employer’s insider trading policy, which prohibited trading the securities of any public company based on material non-public information. Panuwat, an important test case for the SEC, underscores the following corporate governance considerations: A company…

The “G” in ESG stands for “governance.” ESG is of course of one of the most au courant topics in the corporate and securities world, and the inclusion of governance as one of the three ESG pillars inferentially suggests that governance is a new – or at least newly relevant – topic. The reality is, however, that governance is a perennial topic. Its relevance has never diminished, and it remains as important as ever. However, principles of corporate governance do evolve with changing times. It is this evolution of corporate governance that is at the heart of a new book on the topic. The book, which is entitled “Corporate Governance: Understanding the Board-Management Relationship,” and was written by H. Stephen Grace, Jr., Ph.D, Founder and President of H.S. Grace & Company, Inc.; Suzanne Gilbert, Member Board of Advisors of Grace & Co. Consultancy, Inc.; Joseph P. Monteleone, Esq, Principal Catamount Services, LLC; and…

The Securities and Exchange Commission’s Small Business Capital Formation Advisory Committee today released the agenda for its meeting on Monday, May 6, 2024. The meeting will include a discussion of Regulation Crowdfunding (Reg CF) and activity and…Read the Full Press Release Have a securities law question? Call New York Securities Lawyers at 212-509-6544.

On April 23, 2024, the Federal Trade Commission (the “FTC”) voted 3-2 to issue its final rule (“Final Rule”) banning employers from imposing noncompete clauses on their workers, approving the final rule in a special Open Commission Meeting.  The FTC issued the Final Rule more than 15 months after publishing a proposed rule. Since that time, the FTC has received tens of thousands of comments, with the FTC claiming that 25,000 of the 26,000 comments received supported a ban on noncompetes.  According to FTC Chair Lina Khan, “Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned . . . [t]he FTC’s final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market.” The Final Rule…

On 24 April 2024, the European Parliament adopted the following draft legislative texts. These draft texts still need to be formally adopted by the Council of the EU. Following this they will be published in the Official Journal of the EU (OJ). The draft texts are: Regulation amending Regulations (EU) 2017/1129, (EU) No 596/2014 and (EU) No 600/2014 to make public capital markets in the Union more attractive for companies and to facilitate access to capital for small and medium-sized enterprises. The draft Regulation enters into force on the twentieth day following its publication in the OJ. Certain provisions in Article 1 apply from 15 months or 18 months from the date of entry into force. Member States shall take necessary measures to comply with Article 2 point (14)(a) and point (15) by 18 months from the date of entry into force. Directive amending Directive 2014/65/EU to make public capital markets in the Union more attractive for companies and to facilitate access to…

On 25 April 2024, the Financial Stability Board (FSB) issued a report on financial resources and tools for central counterparty (CCP) resolution. In the report, which incorporates feedback from a public consultation, the FSB identifies a toolbox approach as an effective means for resolution authorities to support CCP resolution. In the toolbox approach, resolution authorities should have ready access to a combination of resources and tools from the toolbox as options to use in resolution. The resolution toolbox comprises a set of resolution-specific resources and tools available for resolution and if available, financial resources from access to non-exhausted recovery tools. Implementation of the toolbox approach will be achieved through amendments to the Financial Market Infrastructures Annex of the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions and the 2020 Guidance on Financial Resources to Support CCP Resolution and on the Treatment of CCP…

On 25 April 2024, the European Banking Authority (EBA) published its report on high earners for 2022. In 2022, the number of high earners receiving remuneration of more than EUR 1 million increased by 19.7% from 1,957 in 2021 to 2,342 in 2022. The EBA’s analysis also highlights a persistent gender imbalance within the financial sector, and particularly the highest paid positions. The report has been prepared in accordance with Article 75(3) of the Capital Requirements Directive IV and Article 34(4) of the Investment Firms Directive. These provisions mandate the EBA to collect information on the number of individuals per institution that are remunerated EUR 1 million or more per financial year in pay brackets EUR 1 million, including the business area involved and the main elements of salary, bonus, long-term award and pension contribution.

On 25 April 2024, the European Parliament adopted the text of the proposed Corporate Sustainability Due Diligence Directive. The draft Directive still needs to be formally adopted by the Council of the EU. Following this it will be published in the Official Journal of the EU (OJ).The Directive enters into force on the twentieth day following its publication in the OJ. Member States shall adopt and publish, by 2 years from the Directive’s entry into force, the laws, regulations and administrative provisions necessary to comply with the Directive. These measures shall apply in accordance with the transposition provisions set out in Article 37 of the Directive.