USA updates

Aviation

Contributed by Katten Muchin Rosenman LLP
Federal Aviation Administration bill proposes implicit revocation of US-EU Air Transport Agreement
  • USA
  • July 26 2017

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.

Model aircraft registration rule shot down by DC Circuit
  • USA
  • June 14 2017

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.

Supreme Court declines to clarify whether federal laws pre-empt aviation product liability claims
  • USA
  • March 22 2017

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.

From implementation to take-off: OFAC issues licences for commercial aircraft deals with Iran
  • USA
  • November 30 2016

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.

OFAC general licence facilitates negotiations with Iran for commercial passenger aircraft
  • USA
  • June 01 2016

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.


Banking

Contributed by Sidley Austin LLP
CFPB principles for data aggregation services could have broad implications
  • USA
  • December 08 2017

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.

Volcker Rule: OCC requests public input on potential revisions
  • USA
  • September 29 2017

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.

CFPB proposes amendments to final rule for pre-paid accounts
  • USA
  • July 21 2017

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.

Treasury releases report to reform US financial system
  • USA
  • July 14 2017

The Treasury Department recently released its long-awaited report to reform the US financial system. The report includes dozens of recommendations to reform laws, treaties, regulations, guidance, reporting and recordkeeping requirements and other government policies that inhibit federal regulation of the financial system in a manner consistent with the set of core principles enunciated by President Trump in Executive Order 13772.

OCC issues third-party relationship FAQs
  • USA
  • July 07 2017

The Office of the Comptroller of the Currency recently issued a set of frequently asked questions (FAQs) to supplement its 2013 bulletin on third-party relationship risk management. The FAQs affirm the bulletin's broad applicability, while re-emphasising the need for third-party relationship oversight to be risk based and tailored to individual institutions' needs and delving into several more detailed compliance questions.


Capital Markets

Contributed by Morrison & Foerster LLP
Capital formation bills pass House Financial Services Committee
  • USA
  • December 05 2017

The House Financial Services Committee recently approved 23 bills. These included various bills to facilitate capital formation and reduce certain regulatory requirements, such as the Regulation A+ Improvement Act and the Corporate Governance Reform and Transparency Act 2017.‎ The chair of the committee stated that the bills "will provide smaller businesses with greater access to the capital markets so those businesses can grow and create jobs".

Recent SEC and FINRA actions relating to survivor's options
  • USA
  • November 28 2017

A seasoned investment banker established a hedge fund and solicited terminally ill patients to open brokerage accounts as joint tenants with rights of survivorship. Upon the death of a patient, the investment banker exercised the survivor's option and assigned the profits to the hedge fund. The Securities and Exchange Commission filed charges against those behind this investment strategy for possible securities law violations, which were recently dismissed by an SEC administrative law judge.

Securities rating agency not entitled to refund of erroneously remitted sales tax
  • USA
  • November 21 2017

A New York state administrative law judge recently upheld the denial of a securities rating agency's request for a refund of sales tax. The judge rejected the agency's argument that it had paid the sales tax on behalf of its customers, finding that it did not demonstrate that the tax had not been collected from its customers. The decision seems to elevate form over substance, as it seems logical to conclude that it was the agency that bore the cost of (and actually paid) the sales tax.

SEC solves Section 28(e) MiFID II compliance conundrum – for now
  • USA
  • November 07 2017

In a series of recent no-action letters, the Securities and Exchange Commission published guidance to address concerns by US broker-dealers and investment advisers about how to comply with EU Markets in Financial Instruments Directive rules that limit the use of soft dollars. The long-awaited guidance provides some clarity for financial institutions faced with the dilemma of how to comply with conflicting US and EU regulatory requirements.

Bipartisan congressional legislation introduced aimed at increasing IPO activity
  • USA
  • October 17 2017

Congressmen Ted Budd and Gregory Meeks recently introduced a bipartisan bill, HR 3903, in the US House of Representatives. The bill proposes amendments to the Securities Act 1933, as amended, to increase initial public offering and follow-on activity. The proposed legislation extends three JOBS Act provisions currently available to emerging growth companies to all issuers.


Company & Commercial

Contributed by Cooley LLP
Do performance metrics based on relative total shareholder return transform an equity award into a lottery ticket?
  • USA
  • December 04 2017

According to a recent report, relative total shareholder return (rTSR) is still the most common performance measure used in long-term incentive plans for chief executive officers among S&P 500 companies. However, it has been suggested that rTSR does not adequately reflect individual or company performance, but rather frequently reflected market or industry trends as a whole. The report advocates a different approach based on operating performance measures, such as revenue growth.

2017 Audit Committee Transparency Barometer from Centre for Audit Quality shows continued increase in enhanced disclosures
  • USA
  • November 27 2017

The Centre for Audit Quality and Audit Analytics recently posted their annual Audit Committee Transparency Barometer, which measured the quality of proxy disclosures regarding audit committees among companies in the S&P Composite 1500. The report shows continued voluntary enhancements to transparency and broadly increased disclosure around audit committee oversight of the external auditor.

'Tis the season: SEC Division of Corporation Finance issues new SLB regarding shareholder proposals
  • USA
  • November 20 2017

Just in time for the beginning of proxy and shareholder proposal season, the Securities and Exchange Commission Division of Corporation Finance has posted Staff Legal Bulletin (SLB) 14I on Shareholder Proposals. The SLB addresses the scope and application of the rules regarding ordinary business and economic relevance exclusion, the proposals submitted on behalf of shareholders (shareholder proposals by proxy) and the use of graphics and images.

NACD report on culture as a corporate asset couldn't be more timely
  • USA
  • November 06 2017

Recently, corporate cultures – or, more particularly, serious lapses in the same – have emerged as flashpoints, often with significant negative press coverage and severe economic consequences. A timely new report from the National Association of Corporate Directors suggests that boards should be paying more attention to the oversight of company culture – not just for scandal avoidance, but also "as a way to drive sustained success and long-term value creation".

Will board diversity be the new proxy access?
  • USA
  • October 02 2017

In 2014 New York City (NYC) Comptroller Scott Stringer, who oversees the NYC pension funds, submitted proxy access proposals to 75 companies – and ignited the push for proxy access at public companies across the United States. The NYC Comptroller's Office recently announced the Boardroom Accountability Project 2.0, which will focus on corporate board diversity, independence and climate expertise. Will Project 2.0 have an impact comparable to that of the drive for proxy access?


Competition & Antitrust

Antitrust cartel cases: what can companies expect under the Trump administration?
  • USA
  • April 13 2017

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.

Outlook for disgorgement remedies in Trump administration
  • USA
  • March 09 2017

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.

For whom the agreement tolls: how a typical tolling agreement cost Duke Energy Corporation $600,000
  • USA
  • February 16 2017

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.

Hart-Scott-Rodino and interlocking directorate thresholds announced for 2017
  • USA
  • February 09 2017

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.

Antitrust spotlight on HR professionals – call to review compliance programme
  • USA
  • November 10 2016

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.