USA updates

Arbitration & ADR

Contributed by Norton Rose Fulbright
California loosens restrictions on counsel in international arbitrations
  • USA
  • 23 August 2018

California Governor Jerry Brown recently signed into law Senate Bill (SB) 766, Representation by Foreign and Out-of-State Attorneys. The bill, which was passed 69-to-zero by the legislature, clarifies that foreign (ie, not licensed in the United States) and out-of-state (ie, licensed in a US jurisdiction, but not in California) attorneys can represent parties in international arbitrations in California, subject to certain conditions. SB 766 will take effect on 1 January 2019.


Aviation

Contributed by Cozen O'Connor
California federal court declares drones are aircraft
  • USA
  • 06 February 2019

A recent decision from the Central District of California in Philadelphia Indemnity Insurance Company v Hollycal Production, Inc is somewhat groundbreaking in its significance, primarily because it is the first to address in a precedential context the long-held assumption that drones are, in fact, aircraft.

It's a bird… it's a plane… it's OSHA?
  • USA
  • 09 January 2019

The Occupational Safety and Health Administration (OSHA) is modernising its enforcement tools with the use of camera-equipped drones. OSHA requires each of the agency's 10 regions to designate a staff member as an unmanned aircraft programme manager to oversee training requirements and evaluate reports submitted by drone teams. It further requires that drone crews follow Federal Aviation Administration requirements.

San Francisco federal judge dismisses class action claims as time barred and pre-empted by Airline Deregulation Act
  • USA
  • 19 December 2018

In an interesting decision that may have significant repercussions for air carriers, a San Francisco federal judge recently dismissed a putative class action brought against Air France based on a limitations provision set out in Air France's General Conditions of Carriage and the pre-emption provisions of the Airline Deregulation Act.

DOT convenes sexual misconduct working group for Aviation Consumer Protection Advisory Committee
  • USA
  • 05 December 2018

The US Department of Transportation recently announced the reconstitution of the Aviation Consumer Protection Advisory Committee (ACPAC), including a new subcommittee: the National In-Flight Sexual Misconduct Task Force. The first ACPAC meeting will be held in January 2019 to discuss best practices and protocols for air carriers relating to sexual assault handling, reporting and data collection on board commercial aircraft.

Consumer protection following introduction of Federal Aviation Administration Reauthorisation Act
  • USA
  • 21 November 2018

The new Federal Aviation Administration Reauthorisation Act, signed into law by President Trump, will affect aviation-related consumer protection. The Department of Transportation must revise its existing regulations to clarify the laws regarding compensation, establish minimum dimensions for passenger seats that are necessary for passenger safety, prioritise boarding for pregnant women and refine airlines' practice involving pushchairs, among other issues.


Banking

Contributed by Sidley Austin LLP
Volcker Rule: agencies propose to implement community bank exemption and revise name-sharing rule
  • USA
  • 18 January 2019

The five US federal agencies responsible for implementing the Volcker Rule have individually released a related notice of proposed rulemaking. The notice proposes amendments to the Volcker Rule regulations that would implement two statutory changes required by the Economic Growth, Regulatory Relief and Consumer Protection Act. Comments in response to the notice must be received by the agencies within 60 days of its publication in the Federal Register.

US election results: five key matters for financial services industry
  • USA
  • 07 December 2018

In the recent election, the Democrats captured a majority in the House of Representatives and Representative Maxine Waters (D-Calif) is now in line to lead the House Financial Services Committee. As such, it is expected that a significant shift in legislative efforts relating to the financial services industry will occur. During the first Financial Services Committee hearing since the election, Waters announced that deregulation efforts are finished.

New York State Department of Financial Services challenges OCC authority on fintech charters
  • USA
  • 12 October 2018

In July 2018 the Office of the Comptroller of the Currency (OCC) announced its decision to begin accepting applications from fintech companies for special purpose national bank charters (the Fintech Charter Decision). The New York State Department of Financial Services recently filed a federal court complaint seeking to enjoin further actions by the OCC to implement the Fintech Charter Decision and related actions, arguing that such acts are lawless, ill-conceived and destabilising for financial markets.

OCC to issue fintech charters
  • USA
  • 24 August 2018

The Office of the Comptroller of the Currency (OCC) recently announced – to much anticipation – that it will begin accepting applications from fintech companies for special purpose national bank charters (commonly referred to as 'fintech charters'). However, state banking regulators are likely to once again challenge the OCC's authority to grant fintech charters, which could create some uncertainty for early applicants.

New FAQs on customer due diligence requirement
  • USA
  • 04 May 2018

The Financial Crimes Enforcement Network recently issued new frequently asked questions regarding its customer due diligence (CDD) rule. The CDD rule applies to banks, among others, and includes four core elements of CDD, each of which should be included in anti-money laundering programmes.


Capital Markets

Contributed by Morrison & Foerster LLP
SEC adopts Dodd-Frank Act hedging disclosure rule
  • USA
  • 05 March 2019

The Securities and Exchange Commission recently amended the Securities Exchange Act to implement Section 955 of the Dodd-Frank Act. Among other requirements, companies that are not foreign private issuers, listed closed-end investment companies, smaller reporting companies or emerging growth companies must now comply with the new hedging disclosure requirement in proxy or information statements with respect to the election of directors during fiscal years beginning on or after 1 July 2019.

SEC continues to spread sunshine on private equity: reflections on two recent enforcement actions
  • USA
  • 26 February 2019

The end of 2018 was notable for two Securities and Exchange Commission (SEC) enforcement actions against private equity fund managers for violations of the Investment Advisers Act. The actions demonstrate the SEC's continued focus on private equity fund managers' use of operating partners or consultants and the particular issue of how the expenses of such operating partners or consultants are allocated.

SEC Division of Corporation Finance provides operational guidance following government shutdown
  • USA
  • 19 February 2019

The Securities and Exchange Commission (SEC) Division of Corporation Finance recently provided guidance for issuers regarding the approach that the division will take in processing filings, submissions and other requests for action by its staff. Issuers should carefully consider their plans with respect to registration statements, particularly given that it is possible that another government shutdown could commence if an appropriations bill funding the SEC's operations is not enacted prior to the current deadline.

FINRA's 2019 priorities letter highlights broker-dealer online distribution platform activities
  • USA
  • 12 February 2019

The Financial Industry Regulatory Authority (FINRA) recently published its 2019 Risk Monitoring and Examination Priorities Letter. Unlike previous letters, the 2019 letter focuses primarily on priorities that FINRA considers to be materially new. The first highlighted priority, online distribution platforms, will be of particular interest to the growing number of companies providing financial services through online platforms.

Not just for banks: Congress passes legislation providing relief from Dodd-Frank era regulations restricting capital formation
  • USA
  • 26 June 2018

President Trump recently signed into law the Economic Growth, Regulatory Relief and Consumer Protection Act. While much of the act was designed to provide smaller financial institutions and community banks with relief from regulations implemented under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, Title V includes provisions designed to encourage capital formation. Among other things, the act expands the scope of the blue sky registration exemption.


Company & Commercial

Contributed by Cooley LLP
Activist CEOs speak out – is there a better way to do it?
  • USA
  • 18 March 2019

There has recently been a lot of pressure on CEOs to voice their views on political, environmental and social issues. According to the global chair of reputation at Edelman, the expectation that CEOs will be leaders of change is high. As such, to the extent that CEOs are considering taking stands on contentious social, political or environmental issues, are there effective ways for CEOs to decide when and how to do it?

Corp Fin no-action letters address ordinary business exception and executive compensation
  • USA
  • 04 March 2019

In October 2018 the Division of Corporation Finance (Corp Fin) issued a staff legal bulletin on shareholder proposals that examined the ordinary business exception under Rule 14a-8(i)(7), addressing (among other topics) the application of the rule to proposals relating to executive or director compensation. Since the government shutdown, Corp Fin has posted several no-action letters that consider the exception in that context – but do they provide any colour or insight?

California legislature amends required Civil Code Section 1542 language
  • USA
  • 25 February 2019

Section 1542 of the California Civil Code precludes the waiver of unknown claims unless the protections of the section are expressly relinquished. In order to effectively waive these protections, the language of the statute must be included in any agreement and the parties to the agreement must acknowledge that they are waiving the rights and benefits of the statute. These requirements are not new, but the California legislature recently amended the statutory language required to be included in any waiver.

CII advises on disclosure of board evaluation processes
  • USA
  • 18 February 2019

The Council of Institutional Investors (CII) Research and Education Fund recently released a report regarding disclosures of board evaluation processes in proxy statements. While companies have been discussing their board evaluation processes in their proxies with increasing frequency, the CII suggests that these discussions could be more robust and has identified seven indicators of strong board evaluation processes, including a three-tiered review.

Overcoming short-termism: calling time on earnings per share?
  • USA
  • 28 January 2019

To deter short-termism, which can affect stock repurchases, R&D investments and capital expenditures, among other things, some have recommended that companies should stop giving quarterly guidance, while others have advocated an end to quarterly Securities and Exchange Commission reporting. However, a new theory suggests that getting rid of earnings per share may be the solution.