Financial Regulatory Developments Focus - Issue 13, April 4, 2018

The SEC has granted petitions for review of Nasdaq's $5 million MVLS listing standard, keeping the controversial rule on hold while extending the review period for NYSE American's similar market capitalization requirement. Microcap companies trading near these thresholds face potential delisting consequences if these proposed rule changes are ultimately approved, making it critical to understand the compliance strategies and ongoing regulatory developments.

The SEC is proposing to substantively overhaul the securities transfer agent regulatory framework, which has largely remained unchanged since the paperwork-based system of the mid-1970s.

The U.S. Small Business Administration has set new annual fee rates for Small Business Investment Companies' debentures for fiscal year 2027, with standard debentures at 0.3000% and accrual debentures at 0.8710%. These fees apply to any SBIC receiving debenture commitments between October 1, 2026 and September 30, 2027, regardless of when the debentures are actually drawn.

Financial services firms, healthcare organizations, and businesses across industries are investing heavily in AI and data analytics, yet many struggle to translate these investments into measurable returns. The gap between AI ambition and execution often begins with governance, workforce readiness, and the ability to turn insights into actionable business outcomes.

FinCEN has renewed its Geographic Targeting Order for Minnesota, extending enhanced reporting requirements for financial institutions in Hennepin and Ramsey Counties through February 2027. The order mandates detailed recordkeeping for international fund transfers of $3,000 or more, with exemptions for certain lower-risk transactions. What are the compliance implications for banks and money services businesses operating in these jurisdictions?

The SEC's Division of Examinations has identified six critical areas where investment advisers commonly fall short in their annual compliance reviews, from timing failures to inadequate documentation and unimplemented corrective actions. Understanding these deficiencies is essential for advisers seeking to strengthen their compliance infrastructure and avoid examination risks.

The federal banking agencies have proposed new third-party risk management guidance that is more prescriptive than its emphasis on a “risk-based” approach might suggest. In addition to calling for risk-based oversight, the proposal identifies specific elements that banks should address in board-approved policies and throughout the life cycle of third-party relationships, including due diligence, contracting, ongoing monitoring, documentation, remediation, and termination.

Forget what you thought you knew about startup funding. According to Crunchbase, billion-dollar rounds have moved from anomaly to expectation. In the first half of 2026, 60% of global startup funding flowed to rounds of $1 billion or more — and in the U.S., that figure jumped to a staggering 73%.

Federal banking regulators have proposed new interagency guidance that fundamentally reshapes how financial institutions should manage third-party relationships, moving away from process-driven oversight toward risk-based assessments tailored to actual harm potential. The proposal emphasizes that banks should focus resources on relationships presenting genuine financial, operational, or compliance risks rather than applying uniform heightened standards across all vendor arrangements.

The U.S. Senate's failed cloture vote on the Digital Asset Market Clarity Act has prompted a flurry of regulatory activity from federal agencies seeking to establish frameworks for cryptocurrency markets. In response, the SEC issued groundbreaking exemptions for tokenized securities trading, the CFTC extended relief to crypto wallet providers, and Congress advanced new tax legislation for digital assets.

On 14 July 2026, HM Treasury published its long-awaited consultation on modernising the UK’s payment services and electronic money regulatory framework. The consultation is part of the Government’s National Payments Vision agenda, which aims to ensure that the UK has a trusted, world-leading payments ecosystem delivered on next generation technology, while preserving choice for consumers and businesses.

The resurgence experienced in the nuclear sector in recent years continues to go from strength to strength. Global nuclear power capacity is predicted to increase by at least a third by 2035, with over 75 reactors under construction and approximately 120 more planned.

The Dutch government has released its comprehensive tax plan for 2027, introducing significant changes across corporate income tax, dividend withholding tax, Pillar 2 implementation, employment taxation, and real estate transfer tax. Key measures include modifications to the participation exemption regime for hedging instruments, implementation of the OECD Side-by-Side Safe Harbour package for US-headed multinational groups, and new stock option schemes for startups and scale-ups designed to strengthen the

The European Commission's July 2026 proposal to revise the EU Emissions Trading System Directive introduces significant changes to how carbon capture, use and storage activities are regulated and incentivized.

English law-governed intercreditor agreements increasingly feature distressed disposal provisions that enable liability management exercises with non-pro rata outcomes for equally-ranked creditors.

Spain's draft Royal Decree introduces stringent energy sustainability, environmental, resilience and digital sovereignty requirements for data centers, including renewable additionality, hourly correlation, and efficiency standards. The regulation applies to all access and connection permits obtained after entry into force, with specific compliance deadlines for projects in progress and those with granted permits not yet connected to the grid.

The UK Court of Appeal has clarified the test for valid consent under GDPR, ruling that an objective approach should be taken rather than examining an individual's subjective state of mind. This decision has significant implications for how data controllers assess consent from vulnerable individuals, particularly in sectors like online gambling where addiction concerns arise.

The Pensions Regulator has published its finalised enforcement approach with high-level principles for proportionate, risk-based regulation, while PASA releases operational readiness guidance for schemes preparing for guided retirement requirements expected from summer 2029. A&O Shearman's upcoming Pensions Academy Online sessions will feature a legal update and an exploration of AI's impact on UK pension schemes with TPR's Cliodhna Judge.

Abu Dhabi's Administrative Decisions No. 25 and 26 of 2025 introduce comprehensive reforms governing the post-handover management of jointly owned property, establishing detailed requirements for service charge collection, management company operations, and owners' committee formation. These changes transform what was previously a contractual framework into a structured regulatory regime with direct implications for developers, property managers, investors, and lenders operating in the emirate's real estate

A federal judge dismissed a securities fraud class action against former executives of a business communications company, finding that plaintiffs failed to adequately plead actionable misstatements or establish scienter. The court analyzed allegations concerning revenue projections, financial disclosures, and internal controls during the company's transition from hardware to subscription-based software, ultimately determining that forward-looking statements were protected by safe harbor provisions and that