Regulatory

Originally posted March 31, 2020. Last updated September 30, 2020. In response to the novel coronavirus (COVID-19) pandemic, the Securities and Exchange Commission and its Staff have provided temporary regulatory relief and guidance to assist a variety of market participants. This document summarizes the SEC’s actions that affect public companies, registered investment companies and registered investment advisors. The SEC Staff is monitoring developments closely and will consider additional relief and guidance from other regulatory requirements for those affected by the coronavirus as conditions warrant. We will update this summary as the SEC takes additional actions. The guide linked below should…
On 4 June 2020, Megan Butler (Executive Director of Supervision – Investment, Wholesale and Specialist at Financial Conduct Authority (“FCA”) gave a speech concerning the FCA’s response to the COVID-19 pandemic (“COVID-19”) and expectations for the rest of the year. Ms Butler’s speech was shortly followed by a podcast, delivered by Interim Chief Executive, Chris Woolard, which provides further insight into the FCA’s regulatory response to COVID-19 and outlines areas of focus from the 2020/21 Business Plan, including retail investments, payments and protections for the consumer credit market. Mr Woolard discusses plans for the transformation of the FCA, and…
On 27 May 2020, the UK Financial Conduct Authority (“FCA”) published the latest issue (“Issue 63”) of its Market Watch newsletter focusing on market conduct and transaction reporting issues. Market Watch 63 sets out the FCA’s expectations of market conduct in the context of increased capital raising events and alternative working arrangements due to the current pandemic. The newsletter is intended to highlight that firms need to be more vigilant where there is an increase in the likelihood of potential leaks and rumours in the current market, and as more businesses are heading to the market to recapitalize…
In today’s world, cybersecurity breaches and threats are pervasive concerns for any business entity, without exception. Working from home arrangements due to COVID-19 constraints only magnify the risk and create further vulnerabilities for companies. Companies should be aware of (1) the key cyber threats they face, (2) the consequences of a breach, and (3) the statutory and regulatory framework governing cybersecurity. Cybersecurity breaches are unique in that an entity can both be the victim of the breach and still be found to have a degree of responsibility. Fortunately, there are precautionary measures that companies can implement to help prevent…
On 14 May 2020, the UK Financial Conduct Authority (“FCA”) published its final guidance for insurance and premium finance firms, in relation to the fair treatment of customers who are in temporary financial difficulty resulting from the current COVID-19 pandemic. The guidance and associated rules subsequently came into effect on 18 May 2020 and will be reviewed within 3 months of the same in light of any further developments around the current circumstances. Firms for which this guidance is relevant include the following: insurers; insurance intermediaries (including appointed representatives); premium finance lenders that provide credit to fund the payment of…
In today’s world, cybersecurity breaches and threats are pervasive concerns for any business entity, without exception. Working from home arrangements due to COVID-19 constraints only magnify the risk and create further vulnerabilities for companies. Companies should be aware of (1) the key cyber threats they face, (2) the consequences of a breach, and (3) the statutory and regulatory framework governing cybersecurity. Cybersecurity breaches are unique in that an entity can both be the victim of the breach and still be found to have a degree of responsibility. Fortunately, there are precautionary measures that companies can implement to help prevent…
On the 4th of May 2020 the FCA announced that it intends to pilot a ‘digital sandbox’ in order to enhance regulatory support to innovative firms, such as fintech and regtech businesses, tackling challenges caused by the COVID-19 pandemic. The FCA has previously supported new and innovative firms through regulatory platforms such as  its Innovation Hub, Regulatory Sandbox and TechSprint programme and has accelerated plans to launch the digital sandbox in the wake of the issues caused by COVID-19. The new digital version of the sandbox will enable firms to test and develop proofs of concept in a digital…
On April 28, 2020, Treasury Secretary Mnuchin announced that companies that received loans of more than $2 million through the Paycheck Protection Program (“PPP”) of the CARES Act will be closely scrutinized.  Mr. Mnuchin’s announcement followed public outcry after reports surfaced that large, and even publicly-traded, companies received loans through the PPP, which can be forgiven if used for payroll and certain other expenses, such as commercial rent and utilities.  Mr. Mnuchin stated that any loan greater than $2 million would be subjected to a full review before being forgiven and that the Small Business Administration (“SBA”), the agency backing…
On 1 May 2020, the UK Financial Conduct Authority (“FCA”) published a statement on its website about business interruption (“BI”) insurance cover in light of the current COVID-19 pandemic. The FCA confirmed that it intends to obtain a fast-tracked court declaration to resolve current contractual uncertainty in relation to the same. The issue which the FCA would like to resolve is that there is currently a great lack of clarity and certainty for many businesses making BI claims, and the basis on which insurance firms are subsequently making decisions in relation to whether to pay out on such claims. Due…
Given the volatility in asset prices caused by the COVID-19 crisis, various sectors across Europe have become attractive targets for foreign investors.  In response, the European Commission has issued guidance to Member States on foreign investment and various Member States have enhanced their Foreign Direct Investment (“FDI”) regimes. The European Commission’s guidance calls on Member States to make “full use” of their existing regimes to limit FDI impacting COVID-19 related critical sectors. Certain Member States have also responded quickly to the crisis by introducing pre-clearance requirements for FDI in additional sectors, which may affect foreign investors’ ability to acquire or…
The FCA has recently issued temporary draft guidance for firms that issue regulated motor finance agreements in the wake of the COVID-19 virus and its impact on the financial situation of motor finance customers. Agreements in scope of the guidance will include hire purchase agreements (such as personal contract purchase (“PCP”) agreements), conditional sale agreements or other credit agreements used to purchase a vehicle where the creditor is also the supplier (e.g., credit sale). It will also apply in relation to personal contract hire (“PCH”) agreements and it will extend to firms that have acquired such agreements. The FCA expects…
On April 8, 2020, the Securities and Exchange Commission (the “SEC”) issued an exemptive order to business development companies (“BDCs”) to provide temporary flexibility to issue and sell senior securities and participate in certain negotiated co-investment transactions (the “Order”).[1]  The exemptions are premised upon the challenges that BDCs may face in fulfilling their statutory mandate to provide capital to smaller domestic operating companies in light of the current and potential effects of COVID-19.  The relief is available to a BDC through the earlier of December 31, 2020 and the date on which the BDC elects to cease relying on…
The novel Coronavirus (“COVID-19”) has already had a global impact and will continue to have significant implications on the global financial services industry. With this in mind, the UK Financial Conduct Authority (“FCA”) has issued various communications in order to emphasise the need for business continuity at financial services firms and guidance on how to ensure that is the case. In its recent statement of 17 March 2020 the FCA confirms that it remains focused on business continuity plans for financial institutions and will expect regulated firms to take all reasonable steps to continue meeting their regulatory obligations. Firms will…