On May 21, 2018, a closely divided United States Supreme Court held in Epic Systems Corp. v. Lewis that employers may require employees to resolve employment disputes with an employer through individual arbitration even if the arbitration agreements waive the right to proceed by class or collective action.
On May 11, 2018, the U.S. Securities and Exchange Commission’s (SEC) Division of Corporation Finance (the Division) consolidated and updated its interpretations of the proxy rules and Schedules 14A and 14C. The interpretations, still grouped by Rule or Schedule section, but now in the question-and-answer format of the Division’s other Compliance & Disclosure Interpretations (C&DI), replace the interpretations published in the Proxy Rules and Schedule 14A Manual of Publicly Available Telephone Interpretations and the March 1999 Supplement to the Manual of Publicly Available Telephone Interpretations (collectively, the Telephone Interpretations). In particular, C&DIs 124.01, 124.07, 126.02, 151.01, 161.03 and 163.01 reflect substantive changes to the Telephone Interpretations, while C&DIs 126.04, 126.05, 158.01 and 158.03 reflect technical revisions. The remaining C&DIs reflect only nonsubstantive changes to the Telephone Interpretations.
Beginning May 11, 2018, the new Financial Crimes Enforcement Network (FinCEN) customer due diligence rule (the “CDD Rule”) will require covered financial institutions to identify, and verify the identity of, the beneficial owners of all legal entity customers (i.e., corporations, limited liability companies, partnerships or other business entities) at the time a new account is opened, subject to certain exceptions, including limited exceptions allowing reliance on previously collected information from a customer who certifies or confirms that the information is current and accurate. Covered financial institutions include federally regulated banks and federally insured credit unions, mutual funds, brokers or dealers in securities, futures commission merchants, and introducing brokers in commodities. Significantly for underwritten securities offerings, the CDD Rule has been interpreted to require beneficial owner identification and verification each time a new account is opened, including establishment of a formal relationship with a broker or dealer in securities to effect transactions in securities.
This week, we highlight a report by the EY Center for Board Matters that analyzes independent directors who were elected by shareholders to the board of a Fortune 100 company for the first time in 2017. The research shows that companies are continuing to bring fresh and diverse perspectives into the boardroom, and enhancing the alignment of board composition with their forward-looking strategies.
Akin Gump has released an alert on President Trump’s announcement that the U.S. government has withdrawn from the Iran Nuclear Deal and that secondary sanctions will be re-imposed. The sanctions will restrict non-U.S. persons from engaging in a broad range of business in Iran and it remains to be seen how the sanctions will square with the policies in the other countries that plan to continue their commitment to the deal.
Click here to read the full alert.
Akin Gump has issued an alert detailing the Securities and Exchange Commission’s (SEC’s) proposed new interpretation of fiduciary duties of investment advisers under the Investment Advisers Act of 1940, as amended. The alert discusses how the SEC interprets the duty of care, the duty of loyalty, the ability to “disclose away” as well as potential additional requirements.
Click here to read the full alert.
Akin Gump Corporate Partner, Meng Ru attended the 2018 Harvard China Law Symposium and participated on the panel, From China to the World: Cross-border Transactions. The overall theme of the conference was Entrepreneurship and Development of China and some of the key takeaways included how the surge of deals involving China continues to push for strong growth in the cross-border deal market and how the increasing presence of Chinese corporations and investments in the market and the development of Chinese economic and financial institutions are signaling a growing number of new opportunities. At the same time, the structural transformation of the Chinese economy, government regulations imposed on capital, and uncertainties brought by the internationalization of the RMB may create friction in the global cross-border M&A pipeline. The panel explored the question of how China’s role will develop going forward in cross-border transactions and covered the following topics:
- Unique challenges to Chinese investors with respect to their international investments
- CFIUS review and other regulatory issues on both sides of the Pacific
- How to prepare the board of directors of a Chinese investor
- Trends of Chinese outbound investments in the U.S.
New ISS Help Center
On April 9, 2018, Institutional Shareholder Services Inc. (ISS) launched a new online communications portal, the ISS Help Center, to provide a simplified interface for submitting questions to ISS Research. The new Help Center will be used for submitting questions and requests to ISS for a number of important subjects, including:
- proxy voting and shareholder meeting research
- QualityScore corporate profiles and methodology questions
- research engagement requests
- submissions and disclosures relating to company data