Insights

Amidst an ever-changing U.S. regulatory landscape, Israeli fintechs need to carefully consider their licensing obligations when offering their products to U.S. consumers. Chapman partner Tobias Moon provides perspective on regulatory considerations associated with the credit products Israeli fintech companies are offering to U.S.-based consumers in the US-Israel Legal Review, published by Israel Desks.

In February 2023, Perpetual US Services, LLC filed an application for exemptive relief with the Securities and Exchange Commission (SEC) that, if granted, would allow a mutual fund to create and operate an ETF share class alongside its mutual fund share classes. In the February 2024 issue of The Investment Lawyer, Chapman partners Rick Coyle, Barry Pershkow and Morrison Warren break down the history of the sought-after relief, the potential advantages to such a structure for mutual fund sponsors and shareholders, and share their insights into the SEC’s reluctance to grant such relief, while ultimately arguing that the approval of these applications is the proper step for the SEC to take.

Earlier this month, the United States Securities and Exchange Commission (“SEC”) finalized a long-awaited rule that mandates climate-related disclosures by public companies and in public offerings. See here. The rule does not apply to public asset-backed securities (“ABS”) issuers and the SEC has stated that it will continue to review climate disclosures related to these issuers.

Earlier this month, the United States Securities and Exchange Commission (“SEC”) finalized a long-awaited rule that mandates climate-related disclosures by public companies and in public offerings. See here. The SEC’s rule is already facing legal challenges, including a recent ruling that temporarily blocks the rule from taking effect.

In its 2024 Supervisory Priorities, the NCUA set out examination priorities based on activities that pose the highest risk to federally insured credit union members (referred to as “credit unions”) and that are responsive to the continuous stream of challenges facing credit unions in this current market. It should come as no surprise to anyone that liquidity risk is once again an examination priority for 2024, as the economic environment continues to be uncertain. This all follows on the heels of the Addendum to the Interagency Policy Statement on Funding and Liquidity Risk Management: Importance of Contingency Funding Plans issued in July 2023 (the “Addendum”), highlighting the importance of contingency funding plans as a crucial component of managing funding and liquidity risk. 

On November 27, 2023, the US Securities Exchange Commission (“SEC”) adopted final Securities Act Rule 192 (“Final Rule 192”) prohibiting certain conflicts of interest in securitization transactions. In general, Final Rule 192 prohibits a “securitization participant” with respect to an “asset-backed security” (“ABS”) from directly or indirectly engaging in any “conflicted transaction” during the applicable prohibition period.

The Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) recently issued a decision in In re Envision Healthcare holding that a debtor did not forfeit its rights (including voting and managerial rights) in a Delaware limited liability company (an “LLC”) by filing for bankruptcy, notwithstanding the fact that Delaware state law terminates a person’s membership interest in an LLC upon the member’s bankruptcy.

The Corporate Transparency Act (CTA) went into effect January 1, 2024. Under the CTA, all newly created entities are now required to file a report with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) within 90 days of formation, unless an entity qualifies under one of 23 exemptions. That means, unless an exemption applies, any newly formed LLC, limited partnership, corporation, statutory trust, or other organization that is created by filing with a secretary of state has an additional federal filing requirement. All existing entities formed prior to January 1, 2024, that do not qualify for an exemption have until the end of 2024 to file a Report.

On December 22, 2023, the Internal Revenue Service unveiled its online pre-registration portal for elective pay (or “direct pay”) and transferability of tax credits under the Inflation Reduction Act (the “IRA”). Separately, on December 28, 2023, the IRS released Notice 2024-9, which provides relief for taxpayers facing a phaseout of elective pay tax credits related to a failure to meet certain domestic content requirements.

Our December 6, 2023 Client Alert described very generally important aspects of the “Basel III Endgame” NPR (NPR) that proposed replacing two “subparts” of the existing US Basel III rule. In that Alert, we indicated we would issue a separate Client Alert describing in more detail how the Standardized Approach “risk weights” in Section 32 and “credit conversion factors” (CCFs) in Section 33 of the US Basel III rule differ from the risk weights and CCFs proposed in the NPR (which would be contained in proposed Sections 111 and 112 of the US Basel III rule).

Amidst an ever-changing U.S. regulatory landscape, Israeli fintechs need to carefully consider their licensing obligations when offering their products to U.S. consumers. Chapman partner Tobias Moon provides perspective on regulatory considerations associated with the credit products Israeli fintech companies are offering to U.S.-based consumers in the US-Israel Legal Review, published by Israel Desks.

The 2024 Legally Israel 100, published by Israel Desks, has for the third consecutive year ranked Chapman among the Top 10 Israel Practices in both Capital Markets and Real Estate.

In February 2023, Perpetual US Services, LLC filed an application for exemptive relief with the Securities and Exchange Commission (SEC) that, if granted, would allow a mutual fund to create and operate an ETF share class alongside its mutual fund share classes. In the February 2024 issue of The Investment Lawyer, Chapman partners Rick Coyle, Barry Pershkow and Morrison Warren break down the history of the sought-after relief, the potential advantages to such a structure for mutual fund sponsors and shareholders, and share their insights into the SEC’s reluctance to grant such relief, while ultimately arguing that the approval of these applications is the proper step for the SEC to take.

Earlier this month, the United States Securities and Exchange Commission (“SEC”) finalized a long-awaited rule that mandates climate-related disclosures by public companies and in public offerings. See here. The rule does not apply to public asset-backed securities (“ABS”) issuers and the SEC has stated that it will continue to review climate disclosures related to these issuers.

Earlier this month, the United States Securities and Exchange Commission (“SEC”) finalized a long-awaited rule that mandates climate-related disclosures by public companies and in public offerings. See here. The SEC’s rule is already facing legal challenges, including a recent ruling that temporarily blocks the rule from taking effect.

In its 2024 Supervisory Priorities, the NCUA set out examination priorities based on activities that pose the highest risk to federally insured credit union members (referred to as “credit unions”) and that are responsive to the continuous stream of challenges facing credit unions in this current market. It should come as no surprise to anyone that liquidity risk is once again an examination priority for 2024, as the economic environment continues to be uncertain. This all follows on the heels of the Addendum to the Interagency Policy Statement on Funding and Liquidity Risk Management: Importance of Contingency Funding Plans issued in July 2023 (the “Addendum”), highlighting the importance of contingency funding plans as a crucial component of managing funding and liquidity risk. 

On November 27, 2023, the US Securities Exchange Commission (“SEC”) adopted final Securities Act Rule 192 (“Final Rule 192”) prohibiting certain conflicts of interest in securitization transactions. In general, Final Rule 192 prohibits a “securitization participant” with respect to an “asset-backed security” (“ABS”) from directly or indirectly engaging in any “conflicted transaction” during the applicable prohibition period.

The Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) recently issued a decision in In re Envision Healthcare holding that a debtor did not forfeit its rights (including voting and managerial rights) in a Delaware limited liability company (an “LLC”) by filing for bankruptcy, notwithstanding the fact that Delaware state law terminates a person’s membership interest in an LLC upon the member’s bankruptcy.

Chapman acted as counsel on the registration and listing of three of the first spot bitcoin exchange-traded funds (ETFs) to launch in the United States, which received approval from the U.S. Securities and Exchange Commission (SEC) on January 10, 2024.

The Corporate Transparency Act (CTA) went into effect January 1, 2024. Under the CTA, all newly created entities are now required to file a report with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) within 90 days of formation, unless an entity qualifies under one of 23 exemptions. That means, unless an exemption applies, any newly formed LLC, limited partnership, corporation, statutory trust, or other organization that is created by filing with a secretary of state has an additional federal filing requirement. All existing entities formed prior to January 1, 2024, that do not qualify for an exemption have until the end of 2024 to file a Report.

On December 22, 2023, the Internal Revenue Service unveiled its online pre-registration portal for elective pay (or “direct pay”) and transferability of tax credits under the Inflation Reduction Act (the “IRA”). Separately, on December 28, 2023, the IRS released Notice 2024-9, which provides relief for taxpayers facing a phaseout of elective pay tax credits related to a failure to meet certain domestic content requirements.

Our December 6, 2023 Client Alert described very generally important aspects of the “Basel III Endgame” NPR (NPR) that proposed replacing two “subparts” of the existing US Basel III rule. In that Alert, we indicated we would issue a separate Client Alert describing in more detail how the Standardized Approach “risk weights” in Section 32 and “credit conversion factors” (CCFs) in Section 33 of the US Basel III rule differ from the risk weights and CCFs proposed in the NPR (which would be contained in proposed Sections 111 and 112 of the US Basel III rule).