All Archived News
2021
May 20, 2021: FinCEN Launches Rulemaking for New Beneficial Ownership Reporting
The Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury has begun a rulemaking to implement the beneficial ownership reporting provisions of the new Corporate Transparency Act (CTA), which was included within the Anti-Money Laundering Act of 2020 as part of the National Defense Authorization Act and became law on January 1, 2021. The CTA requires reporting companies ......
May 5, 2021: SEC Issues Amendments to Implement HFCAA
The Securities and Exchange Commission (the “SEC”) has adopted interim final amendments (the “Amendments”) to Forms 20-F, 40-F, 10-K, and NCSR to implement the disclosure and submission requirements of the Holding Foreign Companies Accountable Act (“HFCAA”). The HFCAA was signed into law on December 18, 2020, which, among other things, amended Section 104 of the Sarbanes-Oxley Act of 2002 to impose certain requirements on a public company identified by the SEC ......
April 30, 2021: IRS Issues Proposed Regulations on Requirements for Foreign Persons Investing In Opportunity Zone Funds
On April 12, 2021, the Internal Revenue Service (the “IRS”) issued its proposed regulation (the “Proposed Regulation”) which sets forth requirements that certain foreign taxpayers must satisfy in order to elect federal income tax benefits of investing in a qualified opportunity fund (“QOF”) and for the reduction or elimination of withholding tax. The Tax Cuts and Jobs Act ......
April 16, 2021: SEC Staff Issued Statement on SPAC
As special purpose acquisition companies (“SPAC”) continue to grow in popularity, recently the Division of Corporation Finance of the Securities and Exchange Commission issued a staff statement which focused on various issues that private companies should carefully consider in connection with engaging a business combination with a SPAC.
The statement highlighted certain restrictions to which SPACs are subject, including ......
March 24, 2021: Delaware Court Holds Choice of Law Clause Not Precluding Claim Under California Securities Act
On January 28, 2021, the Delaware Court of Chancery (“Court”) decided in Swipe Acquisition Corp. v. Peter M. Krauss et al. Civil Action No. 2019-0509-PAF (Del. Ch. Jan. 28, 2021) that a Delaware choice of law provision did not preclude a party from asserting a claim under the California Securities Act as otherwise would be contrary to California public policy. The basic fact is as follows ......
March 18, 2021: New York Imposed New Registration and Examination Requirements on Certain Investment Advisor Related Persons and Solicitors
Effective February 1, 2021, amendments to the New York Investment Advisory Act (the “Amendment”) require certain people associated with investment advisers to meet the new registration and examination requirements. The Amendment mostly affects the below three categories of people.
With respect to NY registered investment advisers (a “NY Registered Adviser”), the Amendment imposes the requirements on their representatives .......
March 8, 2021: 2021 Major Employment Laws and Compliance in California
California enacted a number of employment-related laws in late 2020. This newsletter provides a brief summary of a few major new laws and their amendments, including (1) California Family Rights Act, (2) Paid Family Leave, (3) Diversity on Corporate Boards, and (4) COVID-19-Related Laws. Click here for details
February 26, 2021: Federal Acquisition Regulation Council Issued Final Rule to Implement Executive Order Regarding Domestic Preferences in Government Procurement
Buy American Act requires the U.S. federal government to procure manufactured articles, materials, and supplies that have been manufactured in the U.S. substantially all from domestic components, subject to certain exceptions. On January 19, 2021, the Federal Acquisition Regulation Council issued a final rule to implement Executive Order 13881 issued by former President Trump, which called for expansion of the preference for domestic goods, products, and materials in government procurement. The final rule implements .......
February 17, 2021: SEC Adopts Amendments to Permit Electronic Signatures
The Securities and Exchange Commission (“SEC”) has recently adopted amendments to Rule 302(b) of Regulation S-T that permit a signatory to an electronic filing using an electronic signature to sign a signature page or other document (“authentication document”) provided certain procedures are followed. Prior to these amendments, each signatory to an electronic filing is required to .......
February 4, 2021: SEC Published Proposed Amendments to Rule 144
The Securities and Exchange Commission has recently proposed certain amendments to Rule 144 under the Securities Act of 1933 (the “Securities Act”) (the “Proposed Amendments”). Among other things, the Proposed Amendments will eliminate the “tacking” of holding period for “marketable-adjustable securities.” Rule 144 under the Securities Act sets forth a safe harbor allowing for public resales of securities without registration under the Securities Act if certain objective criteria are met. One of those criteria is a .......
February 1, 2021: Corporate Transparency Act Imposes New Beneficial Ownership Reporting Requirements
Congress passed and enacted into law the Corporate Transparency Act (the “Act”) on January 1, 2021, imposing new beneficial ownership reporting requirements on many companies. Unless otherwise exempted, the reporting requirements of the Act apply to all “reporting companies,” which is defined as “any corporation, limited liability company or similar entity that is (i) created by the filing of a document with a secretary of state or a similar office under the laws of a State or Indian Tribe; or (ii) ......
January 22, 2021: DOL Issued Final Rule on Independent Contractor Standard
On January 6, 2021, the Department of Labor (the “DOL”) issued a final rule to clarify the classification of workers as employees versus independent contractors under the Fair Labor Standards Act ("FLSA"). The DOL's final rule reaffirms the economic reality test in the determination of whether an individual is in business for himself/herself or economically dependent on a potential employer for work, and specifically identifies two core factors .......
The Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury has begun a rulemaking to implement the beneficial ownership reporting provisions of the new Corporate Transparency Act (CTA), which was included within the Anti-Money Laundering Act of 2020 as part of the National Defense Authorization Act and became law on January 1, 2021. The CTA requires reporting companies ......
May 5, 2021: SEC Issues Amendments to Implement HFCAA
The Securities and Exchange Commission (the “SEC”) has adopted interim final amendments (the “Amendments”) to Forms 20-F, 40-F, 10-K, and NCSR to implement the disclosure and submission requirements of the Holding Foreign Companies Accountable Act (“HFCAA”). The HFCAA was signed into law on December 18, 2020, which, among other things, amended Section 104 of the Sarbanes-Oxley Act of 2002 to impose certain requirements on a public company identified by the SEC ......
April 30, 2021: IRS Issues Proposed Regulations on Requirements for Foreign Persons Investing In Opportunity Zone Funds
On April 12, 2021, the Internal Revenue Service (the “IRS”) issued its proposed regulation (the “Proposed Regulation”) which sets forth requirements that certain foreign taxpayers must satisfy in order to elect federal income tax benefits of investing in a qualified opportunity fund (“QOF”) and for the reduction or elimination of withholding tax. The Tax Cuts and Jobs Act ......
April 16, 2021: SEC Staff Issued Statement on SPAC
As special purpose acquisition companies (“SPAC”) continue to grow in popularity, recently the Division of Corporation Finance of the Securities and Exchange Commission issued a staff statement which focused on various issues that private companies should carefully consider in connection with engaging a business combination with a SPAC.
The statement highlighted certain restrictions to which SPACs are subject, including ......
March 24, 2021: Delaware Court Holds Choice of Law Clause Not Precluding Claim Under California Securities Act
On January 28, 2021, the Delaware Court of Chancery (“Court”) decided in Swipe Acquisition Corp. v. Peter M. Krauss et al. Civil Action No. 2019-0509-PAF (Del. Ch. Jan. 28, 2021) that a Delaware choice of law provision did not preclude a party from asserting a claim under the California Securities Act as otherwise would be contrary to California public policy. The basic fact is as follows ......
March 18, 2021: New York Imposed New Registration and Examination Requirements on Certain Investment Advisor Related Persons and Solicitors
Effective February 1, 2021, amendments to the New York Investment Advisory Act (the “Amendment”) require certain people associated with investment advisers to meet the new registration and examination requirements. The Amendment mostly affects the below three categories of people.
With respect to NY registered investment advisers (a “NY Registered Adviser”), the Amendment imposes the requirements on their representatives .......
March 8, 2021: 2021 Major Employment Laws and Compliance in California
California enacted a number of employment-related laws in late 2020. This newsletter provides a brief summary of a few major new laws and their amendments, including (1) California Family Rights Act, (2) Paid Family Leave, (3) Diversity on Corporate Boards, and (4) COVID-19-Related Laws. Click here for details
February 26, 2021: Federal Acquisition Regulation Council Issued Final Rule to Implement Executive Order Regarding Domestic Preferences in Government Procurement
Buy American Act requires the U.S. federal government to procure manufactured articles, materials, and supplies that have been manufactured in the U.S. substantially all from domestic components, subject to certain exceptions. On January 19, 2021, the Federal Acquisition Regulation Council issued a final rule to implement Executive Order 13881 issued by former President Trump, which called for expansion of the preference for domestic goods, products, and materials in government procurement. The final rule implements .......
February 17, 2021: SEC Adopts Amendments to Permit Electronic Signatures
The Securities and Exchange Commission (“SEC”) has recently adopted amendments to Rule 302(b) of Regulation S-T that permit a signatory to an electronic filing using an electronic signature to sign a signature page or other document (“authentication document”) provided certain procedures are followed. Prior to these amendments, each signatory to an electronic filing is required to .......
February 4, 2021: SEC Published Proposed Amendments to Rule 144
The Securities and Exchange Commission has recently proposed certain amendments to Rule 144 under the Securities Act of 1933 (the “Securities Act”) (the “Proposed Amendments”). Among other things, the Proposed Amendments will eliminate the “tacking” of holding period for “marketable-adjustable securities.” Rule 144 under the Securities Act sets forth a safe harbor allowing for public resales of securities without registration under the Securities Act if certain objective criteria are met. One of those criteria is a .......
February 1, 2021: Corporate Transparency Act Imposes New Beneficial Ownership Reporting Requirements
Congress passed and enacted into law the Corporate Transparency Act (the “Act”) on January 1, 2021, imposing new beneficial ownership reporting requirements on many companies. Unless otherwise exempted, the reporting requirements of the Act apply to all “reporting companies,” which is defined as “any corporation, limited liability company or similar entity that is (i) created by the filing of a document with a secretary of state or a similar office under the laws of a State or Indian Tribe; or (ii) ......
January 22, 2021: DOL Issued Final Rule on Independent Contractor Standard
On January 6, 2021, the Department of Labor (the “DOL”) issued a final rule to clarify the classification of workers as employees versus independent contractors under the Fair Labor Standards Act ("FLSA"). The DOL's final rule reaffirms the economic reality test in the determination of whether an individual is in business for himself/herself or economically dependent on a potential employer for work, and specifically identifies two core factors .......
2020
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December 22, 2020: Congress Passes Another Round of PPP Program
On December 21, 2020, the United States Congress passed a $2.3 trillion federal spending package, which, among other things, includes $284 billion for another round of small business aid through the Paycheck Protection Program (PPP). The bill will become law once signed by the President. A business that has already received a PPP loan may be eligible to ......
December 21, 2020: Delaware Court of Chancery Provides Guidance on the Interpretation of Contract Provisions Impacted by Covid-19
In AB Stable VII LLC v. MAPS Hotels and Resorts One LLC, et al., the Delaware Court of Chancery for the first time gave its guidance on the interpretation of the Material Adverse Effect provision and the ordinary course covenant impacted by Covid-19 in a Covid-19 broken deal, albeit the unique factual background of this transaction. This case was brought by AB Stable VII LLC (“Seller”) when MAPS Hotel and Resorts One LLC (“Buyer”) refused to .......
December 14, 2020: Congress Passes Legislation Requiring Foreign Companies Listed on US Exchanges to Meet US Audit Standards
The U.S. House of Representatives recently approved the Holding Foreign Companies Accountable Act (the “Act”), which is identical to the bill that the U.S. Senate has passed in May 2020. The Act is expected to be signed into law by President Trump by the end of this month. The Act provides that .......
November 24, 2020: Securities and Exchange Commission Adopts
Updated Regulatory Framework for Fund of Funds Arrangements
On October 7, 2020, the Securities and Exchange Commission adopted a new Rule 12d1-4 (the “New Rule”) under the Investment Company Act of 1940, as amended (the “Investment Company Act”), which permits registered investment companies or business development companies (the “acquiring fund”) to acquire the securities of other registered investment companies or business development companies (the “acquired fund”) (the “fund of funds” arrangements) in excess of the limits contained in Section 12(d)(1) of the Investment Company Act, provided certain conditions have been met, including .......
November 13, 2020: SBA Proposed New Questionnaires Requiring PPP Borrowers of $2 Million or More to Justify "Economic Necessity"
In April 2020, the U.S. Small Business Administration (SBA) established the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security Act (CARES Act) to provide forgivable loans to businesses adversely impacted by the Coronavirus Disease 2019 (COVID-19) pandemic. Many PPP borrowers that are eligible for loan forgiveness are now completing the applicable PPP Loan Forgiveness Application. On October 26, 2020, SBA published a notice in the Federal Register seeking public comments on two proposed PPP questionnaires – one for for-profit borrowers (SBA Form 3509) and the other for non-profit borrowers (SBA Form 3510). .......
November 4, 2020: SEC Proposes Conditional Exemption for Finders from Broker-Dealer Registration
On October 7, 2020, the Securities and Exchange Commission (“SEC”) voted to issue a proposed exemptive order (the “Proposal”) that would, if adopted, permit certain natural person who is not registered as, or associated with, a broker-dealer to receive transaction-based compensation in exchange for capital-raising activities involving accredited investors. SEC indicated that such exemption is intended to assist small businesses in raising capital. The Proposal attempts .......
October 26, 2020: California Attorney General Proposes Additional Modifications to CCPA Regulations
On October 12, 2020, the California Attorney General issued an additional set of proposed modifications (the “Proposed Modifications”) to the regulations implementing the California Consumer Protection Act. The Proposed Modifications would make the following revisions to the existing regulations:
First, a business that collects personal information in the course of interacting with consumers offline is required to .......
October 13, 2020: New California Law Mandates Board Diversity in Public Corporations
On September 30, 2020, California Governor Gavin Newsom signed Assembly Bill 979 into law, which requires that a publicly held domestic or foreign corporation whose principal executive office is located in California include one or more racially or otherwise diverse directors. Pursuant to Assembly Bill 979, a publicly held corporations ....... -
October 2, 2020: DOL Proposed to Revise Independent Contractor Test
On September 22, 2020, the Department of Labor (the “DOL”) issued a proposed rule that would clarify whether a worker should be classified as an employee or an independent contractor under the Fair Labor Standards Act ("FLSA"). Although DOL previously adopted the economic reality test and issued guidance on such test, no formal regulation had been promulgated by the DOL to address such test prior to its issuance of this proposed rule. The DOL also stated that the new rule .......
October 2, 2020: Treasury Issues Final Regulations on CFIUS Mandatory Filings
On September 15, 2020, the U.S. Department of the Treasury published a final rule (the “Final Rule”), effective on October 15, 2020, that refines the Committee on Foreign Investment in the United States (CFIUS)’s mandatory filing requirement for certain transactions, in particular those involving foreign investments in U.S. businesses that engage in activities relating to “critical technologies”. The Final Rule eliminates .......
September 21, 2020: Court Temporarily Halts the WeChat Ban
On or around September 20, 2020, a federal judge granted a nonprofit organization’s motion for a nationwide preliminary injunction against the implementation of an Executive Order banning transactions related to WeChat (the “EO”). As a result of the preliminary injunction, users can continue using WeChat as usual. The EO was signed.......
September 17, 2020: California Expands the Exemptions to Independent Contractor Statute
A new California law, Assembly Bill 2257 (“AB 2257”) became effective on September 4, 2020, AB 2257 modifies an earlier Assembly Bill 5 (“AB 5”), which codifies a strict ABC test for determining whether California workers should be classified as employees or independent contractors and had a huge impact on numerous industries. Under the ABC test, hiring entities .......
September 8, 2020: SEC Amends “Accredited Investor” Definition to Allow More Participation in Private Offerings
On August 26, 2020, the Securities and Exchange Commission (SEC) amended the definition of “accredited investor” to add new categories of qualifying natural persons and entities and to make certain other modifications to the existing definition, thereby allowing a larger pool of investors to have access to private offerings. The Amendments......
September 1, 2020: Delaware Court of Chancery Bars Stockholder of a Delaware Corporation from Pursuing Stockholder Inspection Rights Under California Corporations Code
On August 13, 2020, the Delaware Court of Chancery (the “Court”) issued an opinion, JUUL Labs, Inc. v. Grove, C.A. No. 2020-0005-JTL, holding that under the “internal affairs doctrine,” a stockholder of a Delaware corporation headquartered in California could not seek to inspect the corporate books and records pursuant to California’s inspection statute. Click here for details - August 17, 2020: IRS Issues Proposed Regulations Providing Guidance on Taxation of Carried Interest from Investment Partnerships under Section 1061
On July 31, 2020, the Internal Revenue Service (“IRS”) and the Department of the Treasury released proposed regulations (the “Proposed Regulations”) providing taxpayers with definitional and computational guidance regarding how to interpret the carried interest rules under Section 1061 of the Internal Revenue Code of 1986, as amended (the “Code”). Section 1061, which was added to the Code .......
August 10, 2020: 2020 Amendments to the Delaware General Corporation Law
On July 16, 2020, the Delaware legislature amended the Delaware General Corporation Law (the “DGCL”) in part to respond to the COVID-19 pandemic. Section 110 of the DGCL was amended to include and clarify additional circumstances .......
July 28, 2020: Amendment to Definition of “Private Fund” under Cayman Laws
The Cayman Islands Private Funds Law, 2020 (the “PFL”) has recently been amended. The amendment has, among other things, widened the scope of the definition of a “private fund” and subjected more entities to the requirement of registering with the Cayman Islands Monetary Authority (“CIMA”). In the amended definition ......
July 21, 2020: California Privacy Rights Act – California’s New Privacy Act on the Move
Just a few days before the California Consumer Privacy Act (the “CCPA”) became enforceable on July 1, 2020, a new act, the California Privacy Rights Act (“CPRA”), had gathered enough signatures to be put on the California ballot in November, which, if adopted, will impose even stricter requirements on ...... -
July 13, 2020: COVID-19 Prioritized Examination Program for Certain Trademark and Service Mark Applications
Recognizing the need for companies to quickly deliver products that may help combat the COVID-19 pandemic, the United States Patent and Trademark Office (“USPTO”) announced, on June 15, 2020, the new COVID-19 prioritized examination program (“New Program”) for certain trademark and service mark applications. Under the New Program, the USPTO will accept petitions to advance the initial examination ....... -
June 26, 2020: SBA Releases EZ Application for PPP Loan Forgiveness
On June 16, 2020, the Small Business Administration (“SBA”) and the U.S. Treasury Department released revised forms of loan forgiveness application and the accompanying instructions to reflect amendments to the Paycheck Protection Program (the “PPP”) under the Paycheck Protection Program Flexibility Act of 2020 (the “PPPFA”). The updated documents include a revised standard forgiveness application and a new short form “EZ” forgiveness application. For eligible borrowers, the EZ forgiveness application ........
June 22, 2020: Paycheck Protection Program Flexibility Act Signed into Law
On June 5, 2020, President Trump signed into law the Paycheck Protection Flexibility Act (the “Flexibility Act”), which amends the CARES Act and the Paycheck Protection Program (“PPP”) to provide greater flexibility to PPP loan recipients. The major changes that the Flexibility Act made to the administration of the PPP and the terms of PPP loans include, without limitation, the following:.......
June 12, 2020: CFIUS Proposes Rules to Change Mandatory Fling Requirements
On May 21, 2020, the Committee on Foreign Investment in the United States (“CFIUS”) proposed a rule to modify the mandatory filing requirements for certain foreign investment transactions involving critical technologies. Under the existing rules, mandatory filing of a notice or declaration is required for ......
June 9, 2020: Treasury Proposed Rule to Modify FIRRMA Provisions
On May 21, 2020, the Department of Treasury issued a proposed rule that would revise certain provisions in the regulations that implement the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”). Specifically, this proposed rule is intended to revise the scope of the mandatory declaration with the Committee on Foreign Investment in the United States (“CFIUS”) involving certain non-controlling foreign investments in certain US business, among other things. ......
May 29, 2020: BIS to Add 33 Chinese Entities to the Entity List
On May 22, 2020, the Department of Commerce’s Bureau of Industry and Security (BIS) announced it will add 33 Chinese entities to the Entity List, signaling that the Trump Administration will continue its current course to further control export to Chinese entities it deems problematic. Once the 33 entities are added into the Entity List, the export, re-export, or in-country transfer of items subject to the Export Administration Regulations to such entities will be prohibited without Department of Commerce authorization. Companies doing business with Chinese companies or in China should ...... - May 26, 2020: SEC Provides Temporary Relief to Small Businesses Pursuing Expedited Crowdfunding Offerings
- The Securities and Exchange Commission (the “SEC”) recently issued temporary final rules for established small companies affected by COVID-19 that may consider meeting their funding needs through a Regulation Crowdfunding offering from certain requirements of Regulation Crowdfunding relating to the timing of the offering and the availability of financial statements required. Under the temporary final rules, the SEC allows issuers to gain access to funds through securities offerings more quickly than before by .......
May 14, 2020: Nasdaq’s Temporarily Exception to Shareholder Approval Requirements for a 20% Issuance as a Result of COVID-19
The SEC has adopted a new Nasdaq Rule 5636T(b), which will provide a temporary limited exception from certain shareholder approval requirements (Nasdaq Rules 5635(d)). Nasdaq believes that this temporary suspension will permit companies to raise capital quickly to continue running their businesses and address the immediate health crisis caused by the COVID-19 pandemic. The new rule is effective immediately and will remain in place through June 30, 2020. Rule 5635(d) provides that ...... .
May 11, 2020: The Federal Reserve Released Additional Guidance on Main Street Lending Program
The Federal Reserve recently released additional guidance and an FAQ regarding the $600 billion Main Street Lending Program (the “Main Street Program”) to provide support to small and medium-sized businesses that were in sound financial condition prior to the onset of the COVID-19 pandemic to maintain their operations and payroll until conditions normalize. Subject to the term sheet of each loan facility, U.S. businesses with 15,000 employees or fewer or 2019 annual revenues of $5 billion or less may participate in the Main Street Program. Main Street Program includes ....... - May 4, 2020: BIS Expands Export Restrictions to China, Russia and Venezula for Military End Users or Military End Use
On April 28, 2020, the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) published a final rule to expand license requirements on exports, reexports, and transfers (in-country) of items intended for military end use or military end users in China, Russia or Venezuela. The final rule will become effective on June 29, 2020. Notably, the final rule expands ....... - April 21, 2020: White House and Senate Agreed to Replenish PPP Loan
On April 21, 2020, the White House and the Senate agreed on a new funding package in excess of $480 billion to reopen the aid to small businesses stricken by COVID-19. The House is expected to vote on the legislation within this week. A total of $320 billion will be allocated for the Small Business Administration’s Paycheck Protection Program (PPP). The package also includes $60 billion for the Economic Injury Disaster Loan program (EIDL).
The Paycheck Protection Program is designed to expand the access and availability of loans to small businesses affected by the COVID-19 pandemic. The initial funding for the program in the amount of $350 billion was exhausted quickly.
- April 16, 2020: MagStone Law Alerts Investors Who Purchased Luckin Coffee (LK) Securities From April 2019 to April 2, 2020 and Suffered Losses
- Investors who purchased Luckin Coffee securities and have lost at least $2,000,000 are encouraged to contact Bing Zhang Ryan, litigation partner of MagStone Law, at bingzhangryan@magstonelaw.com for a free initial consultation regarding potential recovery of their losses. Click here for details.
- April 14, 2020: DOL Issued Guideline on the Families First Coronavirus Response Act
- Following the enactment of the Families First Coronavirus Response Act (the “FFCRA”) which was discussed in our previous post, on March 24, 2020, the Wage and Hour Division of the U.S. Department of Labor the (“DOL”) released preliminary guideline, comprised of (1) a Fact Sheet for Employers, (2) a Fact Sheet for Employees, and (3) FAQs (collectively, the “Guideline”),which seeks to provide details concerning various aspects on the implementation of the new law. The FFCRA requires, .......
April 8, 2020: Employee Retention Tax Credit under the CARES Act
Enacted on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) provides an employee retention tax credit (“Employee Retention Credit”) to encourage “Eligible Employers” to keep employees on their payroll. The Employee Retention Credit is a fully refundable tax credit for employers. It equals to ....... -
- March 26, 2020: Families First Coronavirus Response Act Signed into Law
- On March 18, 2020, President Donald Trump signed into law the Families First Coronavirus Response Act (“FFCRA”), an emergency relief bill that aims to provide financial support to reduce the impact of the 2019 Novel Coronavirus (“COVID-19”) on American families. The FFCRA provides for two sources of ......
- March 16, 2020: President Trump Orders Beijing Shiji to Divest Acquisition of StayNTouch
- On March 6, 2020, President Trump issued an Executive Order requiring Beijing Shiji Information Technology Co., Ltd., a public company organized under the laws of China (“Shiji”), to divest its acquisition of StayNTouch, Inc. (“StayNTouch”), a US-based hotel property management software company. The Order is the sixth Executive Order to date prohibiting the acquisition of a U.S. business by a foreign person, pursuant to the authorities that allow the Committee on Foreign Investment in the United States (“CFIUS”) to review......
- March 9, 2020: SEC Amends Exemptions from Investment Adviser Registration for Advisers to Rural Business Investment Companies
On March 2, 2020, the Securities and Exchange Commission (“SEC”) adopted the amendments to (i) Section 203(l)-1, which defines the term “venture capital fund” for purposes of the venture capital fund adviser exemption, and (ii) Section 203(m)-1, which defines the term “assets under management” for purposes of the private fund adviser exemption, in each case, under the Investment Advisers Act of 1940 (as amended, the “Advisers Act”), to reflect exemptions from registration for investment advisers who advise rural business investment companies (“RBICs”). Specifically, Section 203(l),...... - March 3, 2020: CRS Releases Report on CFIUS
On February 26, 2020, the Congressional Research Service (“CRS”), a public policy research think tank of the U.S. Congress, released a report on the Committee on Foreign Investment in the United States (“CFIUS”). The CRS report reviewed ......
- CFIUS Update Series of 2020 Please click here.
- February 18, 2020: CFIUS Update IV - Sensitive Personal Data under FIRRMA
On January 13, 2020, the US Department of Treasury (“Treasury”) issued two final rules (the “Final Rules”) implementing the Foreign Investment Risk Review Modernization Act (“FIRRMA”). The Final Rules expand the jurisdiction of the Committee on Foreign Investment in the United States (“CFIUS”) to review non-controlling foreign investments in a US business involving critical technology, critical infrastructure, or sensitive personal data (a “TID US Business”). Under the Final Rules, CFIUS may review ...... - January 18, 2020: SEC Proposes to Amend the “Accredited Investor” Definition
The Securities and Exchange Commission (SEC) has recently proposed to amend the definition of “accredited investor”. Qualifying as an accredited investor may enable an investor to participate in private investment opportunities that are generally not available to the general investment public, such as investments in certain hedge funds and private equity funds. Specifically, the SEC proposes ... - January 13, 2020: Software Specially Designed to Automate Analysis of Geospatial Imagery Added to Export Control Classification Number 0Y521 Series
On January 6, 2020, an interim final rule issued by the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) to make certain items subject to the EAR and imposes a license requirement for the export and reexport of certain items to all destinations, except Canada. Specifically, this rule classifies ...
2019
October 17, 2019: 28 China-Based Entities included in BIS List The U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) recently issued a rule to amend the Export Administration Regulations (“EAR”) by adding twenty-eight additional entities located in China to the Entity List. The rule became effective on October 9, 2019. A copy of the rule, together with the newly added entities, can be viewed here.
For the entities listed in the Entity List, including those newly listed entities, BIS imposes a license requirement for all items subject to EAR and a license review policy of case-by-case review for items under certain Export Control Classification Numbers. BIS has also adopted a license review policy of presumption of denial for license applications to these entities with limited exceptions.
For the entities listed in the Entity List, including those newly listed entities, BIS imposes a license requirement for all items subject to EAR and a license review policy of case-by-case review for items under certain Export Control Classification Numbers. BIS has also adopted a license review policy of presumption of denial for license applications to these entities with limited exceptions.
regarding AB5 or how it may impact your company, please contact us.
- AB5: On September 18, 2019, Governor Gavin Newsom signed Assembly Bill 5 (AB5) into law, which codifies the “ABC” test for employee versus independent contractor classification in California. The new law will become effective on January 1, 2020.
Under the “ABC” test, a hiring entity must establish all of the following conditions for a worker to be considered a contractor rather than an employee:
(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work; and
(B) The person performs work that is outside the usual course of the hiring entity’s business; and
(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
AB5 only requires the use of the “ABC” test for certain employment law areas but not others and there are multiple exemptions from the “ABC” test. California employers should consider classification decisions carefully and should seek legal counsel when the classification is not entirely clear.
regarding AB5 or how it may impact your company, please contact us.
- CA has become first state in ...: California has become the first state to require public companies to include women on their board of directors. Under California’s newly enacted law, a publicly held corporation whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California, is required to have a minimum of one female director on its board of directors by December 31, 2019. By the end of 2021, the minimum number of female directors will be further increased for publicly held corporations with five or more directors. A failure to comply with the law or timely file the directors’ gender information with the California Secretary of State by the specified date could incur $100,000 or more in fine.
- FIRMMA: On September 17, 2019, the Treasury Department proposed final regulations that would comprehensively implement the Foreign Investment Risk Review Modernization Act of 2018 (“FIRMMA”). Among other things, the proposed final regulations expand the jurisdiction of the Committee on Foreign Investment in the United States (“CFIUS”) over (i) non-controlling investment in U.S. business that afford a foreign person certain access, rights, or involvement with critical technologies, critical infrastructure, or sensitive personal data ( “TID U.S. business”) and (ii) certain foreign investments in U.S. real estate. The proposed regulations would also introduce a mandatory declaration requirement for investment in a TID U.S. Business by certain foreign investors if a foreign government has a substantial interest in that foreign investor. Comments on the proposed regulations are due by October 17, 2019. The final regulations will become effective no later than February 13, 2020.
2018
- President Trump signed into law the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) on August 13, 2018.
- On June 27, 2018, President Trump announced that he would back away from an aggressive approach to limit China’s investment in the United States through declaring a national economic emergency. Instead, he would rely on an existing Secretary-led committee to restrict new investments (including Chinese investments) in American technology companies, which is to expand the current CFIUS authorities through the Foreign Investment Risk Review Modernization Act of 2017 (FIRRMA). On June 28, 2018, the House bill of FIRRMA was approved by a margin of 400 to 2. While several differences remain between the House and Senate versions, the overwhelming vote for FIRRMA in the House of Representatives, coupled with the support of President Trump, makes it highly likely that some form of the legislation will be enacted this year.
- GDPR: The European Union’s General Data Protection Regulation (GDPR) was adopted in 2016 and becomes effective May 25, 2018. It requires businesses to protect the personal data and privacy of EU citizens for transactions that occur within EU member states. GDPR applies any company or organization that collects or processes personal data of an EU citizen, who is residing in the EU, regardless of the location of the company or where the personal data is stored. Companies must be able to show compliance by May 25, 2018.
- The new Section 251(h) of the Delaware General Corporation Law eliminates the need to include top-up options or a back-end stockholder vote in most public tender offers for Delaware corporations.
- The SEC has adopted amendments to allow widespread advertising and other forms of “general solicitation” or “general advertising” in private offerings under Rule 506 of Regulation D of the Securities Act of 1933 or under Rule 144A of the Securities Act of 1933, so long as all purchasers of the securities are reasonably believed to be accredited investors or QIBs.