The House of Representatives Committee on Transportation and Infrastructure reported out to the floor of the House of Representatives for the consideration of the 21st Century Aviation Innovation, Reform and Reauthorisation Act. The act privatises US air traffic control, prevents the entry of 'flag of convenience carriers' into the United States and overturns the legal interpretations by the Departments of State, Justice and Transportation of the Air Transport Agreement.
In a recent case the US Court of Appeals for the DC Circuit vacated a rule requiring individuals who fly small drones and other model aircraft for hobby or recreational purposes to register with the Federal Aviation Administration. The case serves as a reminder that, despite rapid advancements in drone technology, the regulators – and society – are still in the early stages of figuring out how to integrate these versatile devices into US airspace.
The Supreme Court recently denied a petition for writ of certiorari, leaving open the question of whether the Federal Aviation Act pre-empts state law standards governing design defects by aircraft and engine manufacturers. When the issue was presented on interlocutory appeal to the Court of Appeal for the Third Circuit, the court held that design defects were not the subject of field pre-emption. Further monitoring is necessary to determine whether other courts will find this approach persuasive.
The beginning of 2016 brought the arrival of 'Implementation Day' under the Joint Comprehensive Plan of Action and its potential for business opportunities in Iran that had been shut off for decades. Subsequent months have shown that, even with the relaxation of US sanctions, the road to doing business with Iran is still complex and riddled with possible compliance faults.
The US Treasury Department Office of Foreign Assets Control recently introduced General Licence I to make it easier for US persons to enter into contingent contracts, negotiations and transactions relating to the sale of aircraft or related parts to Iran. However, the US-Iran trade relationship is tenuous and there are still many opportunities for US businesses to fall foul of US sanctions and export laws unwittingly.
The Board of Governors of the Federal Reserve System has announced revisions to the Annual Report of Foreign Banking Organisations (FR Y-7) which will enable foreign banking organisations (FBOs) to certify their compliance with US risk committee and home country capital stress testing requirements under Regulation YY. The FR Y-7 is an annual report submitted by qualifying FBOs to provide financial, organisational, shareholder and managerial information to the board.
The US Court of Appeals for the Ninth Circuit recently held that California's statute prohibiting credit card surcharges violated the First Amendment as applied to the proposed surcharge practices of the merchant-plaintiffs. The Ninth Circuit used the same reasoning as a recent Supreme Court case to hold that California's surcharge ban regulated speech rather than conduct, therefore posing First Amendment concerns.
The Consumer Financial Protection Bureau recently released a set of consumer protection principles designed to protect consumer interests in the market for services built around consumer-approved use of financial information. The principles are targeted at so-called 'data aggregation' or 'screen scraping' services that collect customer information in order to provide financial planning or other services.
The US Office of the Comptroller of the Currency (OCC) recently released a notice seeking public input regarding how to revise the Volcker Rule. The notice cites a report released by the US Treasury Department, which included recommendations for significant changes to the rule. Although the OCC did not propose specific changes to the rule in its notice, it stated that the information that it is soliciting could support the revisions to the final rule advanced in the Treasury report and elsewhere.
The Consumer Financial Protection Bureau recently issued proposed amendments to its final rule to expand existing consumer protections for electronic fund transfers to pre-paid accounts. Among other things, the proposal would modify the final rule to exempt pre-paid account issuers from the error resolution and limitation of liability provisions with respect to unregistered cardholders and provide more flexibility to issuers of digital wallet accounts that are covered by the final rule.
The Securities and Exchange Commission (SEC) recently issued a public statement regarding exchanges and other secondary trading platforms that list or facilitate the trading of coins and tokens online. The statement emphasises that platforms offering the trading of digital assets that are securities must register with the SEC as a national securities exchange or operate under an exemption from such registration.
In an unusual step that appears to indicate renewed, if not intensified, scrutiny of public companies' cybersecurity practices by the Securities and Exchange Commission, its five commissioners have unanimously issued guidance covering a range of cybersecurity topics, including disclosure obligations, board oversight and risk management controls. Among other things, companies are advised to make cybersecurity training and compliance a priority company-wide.
In a recent principles-based grant of relief, the Securities and Exchange Commission (SEC) focused on the business activities of the particular issuer, instead of whether a particular asset is a qualifying asset, in determining the availability of the Section 3(c)(5)(C) exemption. Mortgage real estate investment trusts should consider obtaining confirmation from the SEC regarding their own particular business activities in order to avoid any potential future uncertainty.
In the recently released Congressional Budget Justification, the Securities and Exchange Commission (SEC) highlighted a number of priorities. The request notes that the Division of Corporation Finance remains focused on measures designed to promote capital formation. It also references the SEC's intent to "propose amendments to further facilitate capital formation through exempt and registered offerings" and refers to proposed amendments to modernise disclosures applicable to real estate companies.
The Securities and Exchange Commission recently issued a final rule which provides that certain communications relating to security-based swaps (SBS) will not constitute 'offers' for the purposes of Section 5 of the Securities Act 1933. The final rule makes clear that the publication or distribution of certain price quotes relating to SBS, and of certain research reports discussing SBS, will not constitute offers of the related SBS for purposes of Section 5 and thus should not require registration.
The EY Centre for Board Matters has identified investors' top priorities for companies in 2018, based on its annual investor outreach involving interviews with institutional investors. According to EY, the top investor priorities include board composition, with a particular focus on enhanced diversity; board-level expertise that is more aligned with business goals; and enhanced attention to talent and human capital management.
The Federal Trade Commission (FTC) has issued its annual inflation-adjusted thresholds for determining whether an acquisition of voting securities requires prior notification under the Hart-Scott-Rodino Act. If any person or entity will hold voting shares that exceed the set amount as a result of an acquisition, all parties must submit a filing and observe a mandatory waiting period before acquiring the shares. The FTC also revised the potential maximum penalty for violations of the act.
The new tax act is expected to trigger a spike in the levels of stock buybacks. Since one of the most prolific proponents of shareholder proposals recently submitted a proposal to eliminate the impact of stock buybacks in determining executive compensation, it seems likely that this type of proposal may resurface more frequently, especially if, in light of the recent tax law change, the level of stock repurchases resumes a sustained upward climb.
The National Association of Corporate Directors has released the results of its 2017-2018 Public Company Governance Survey of over 1,000 directors and executives. The survey looked at directors' outlooks for 2018 on key business trends and critical board priorities, the board's role in overseeing an organisation's culture, the state of board risk oversight – especially cybersecurity risk – and the growing challenge of hedge fund activist investors.
The Securities and Exchange Commission Division of Corporation Finance recently revised some of the guidance in its Financial Reporting Manual relating to the adoption of new accounting standards. One revision relates to the adoption of a new accounting standard in the context of a significant acquisition and the second relates to transition period accommodations for emerging growth companies. This new guidance could take on particular significance in the context of the new revenue recognition standard.
It is difficult to predict how the antitrust trends and policies that have evolved over the past decade will play out under the Trump administration. The president has already made some picks for antitrust leadership that suggest – consistent with his overall pro-business platform – that antitrust enforcement will decrease in some areas. Thus, the cartel space will be an interesting one to watch.
With the departure of now former Chair Edith Ramirez in early February 2017, among the most discussed vacancies in the new administration is the post of permanent chair of the Federal Trade Commission (FTC). According to reports, one leading candidate is Acting Chair Maureen Ohlhausen, whose selection could have significant implications for FTC policy areas, particularly with respect to disgorgement remedies in antitrust cases.
Although tolling agreements are increasingly common in the energy industry, parties that have or may have an interest in acquiring the other party to the agreement must be careful to avoid assuming beneficial ownership of the target before complying with the Hart-Scott-Rodino reporting requirements if Hart-Scott-Rodino notification is required. Failure to do so may result in the tolling agreement constituting evidence of gun jumping and the acquiring person being subject to significant penalties.
The Federal Trade Commission released the annual jurisdictional adjustments for pre-merger notification filings made pursuant to Section 7A of the Clayton Act, known as the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as well as for Section 8 of the act. The new filing thresholds for Hart-Scott-Rodino notification will become effective 30 days after publication in the Federal Register, while the revisions to Section 8 will become effective immediately on publication in the register.
The US Antitrust Division of the Department of Justice and the Federal Trade Commission recently issued guidance for human resources (HR) professionals on steps to avoid antitrust violations. The guidelines – which cover 'no-poaching' agreements, agreements to fix wages or other terms of employment and the exchange of HR information – reveal the agencies' determination to scrutinise the employment arena and their intention to use, if necessary, their most powerful enforcement tools.