2020 Insights: Regulatory

Skadden's 2020 Insights

Antitrust Enforcement Centers on Technology Industry
As United States and European Union antitrust authorities continue to show signs of greater enforcement levels in 2020, high-tech industries and digital markets are expected to face the most scrutiny on both continents.

Blockchain Trends and Enforcement Surrounding the New Technology
In 2019, regulators started to consider the possibility that "stablecoins" could become an accepted means of global payment, a testament to the growth of blockchain technology and the number of projects seeking to develop a useable virtual currency. Despite that shift, the U.S. Securities and Exchange Commission continued to bring enforcement actions throughout 2019. These efforts likely will continue in 2020, increasing the probability that the courts may be called upon to provide some clarity around token sale activity that occurred in 2017 and 2018.

CFIUS’ First Full Year Under FIRRMA
In 2020, we expect general continuity of practices surrounding Committee on Foreign Investment in the United States, with an increased focus on China-related non-notified transactions; implementation of the final Foreign Investment Risk Review Modernization Act of 2018 regulations (effective February 13, 2020); and, likely most significantly, expanded mandatory CFIUS coverage via continuing export control reform.

Conservative Party Win Paves Way for Reforms to UK National Security Reviews
The Conservative Party’s conclusive win in the U.K.’s recent general election paves the way for long-anticipated and decisive reforms to the country’s national security screening regime. Recent government interventions in high-profile transactions with national security implications highlight the increased focus on national security concerns in recent years and provide useful lessons for navigating the future regime.

An Illusory Promise or Real Change? Transition at CFTC Brings Hope for Dodd-Frank Act Revisions
While the CFTC under the Trump Administration has claimed to make efforts to reduce regulatory obligations in the derivatives space, the number of CFTC enforcement actions for regulatory violations continues to rise. Market participants are hopeful that recent changes at the CFTC will finally result in meaningful action to prune back the underlying regulatory obligations that resulted from the rushed implementation of the Dodd-Frank Act nearly a decade ago.

Growing State Anti-Discrimination and Anti-Harassment Protections Create Patchwork of Regulations for Employers
Several state governments have enacted significant legislation addressing discrimination and harassment in the workplace. Combined with a lack of action on the federal front, these changes create a patchwork of rules that employers must navigate as they balance compliance with state laws while maintaining consistency in their workplace policies, procedures and trainings.

Drug Pricing Concerns Drive Continued DOJ Focus on Life Sciences Companies
In 2019, U.S. Department of Justice (DOJ) enforcement activity targeting drug and device manufacturers jumped sharply, with more than two-thirds of settlements involving Anti-Kickback Statute violations. We expect attention on kickbacks and financial fraud to continue in 2020 as the DOJ focuses on the activities it believes contribute to high drug and medical device prices.

SEC Enters Election Year Focused on Key Initiatives
Despite the customary slowdown associated with a presidential election year, the SEC is expected to continue in 2020 its efforts to address several long-standing regulatory priorities, such as increasing oversight of proxy advisory firms and updating shareholder proposal rules.

The Tax Cuts and Jobs Act's Impact on Cross-Border Transactions
Two years after the enactment of the Tax Cuts and Jobs Act, taxpayers continue to encounter complexities arising from interpretations of the new statutory rules and how they interact with prior rules, reinforcing calls for administrative guidance to provide more clarity.

Challenging Tax Cuts and Jobs Act Regulations and IRS Guidance
The Tax Cuts and Jobs Act (TCJA) brought sweeping changes to the U.S. international tax system. Two years later, taxpayers continue to face substantial uncertainty as to how the TCJA’s rules affect current tax return filings and a company’s financial reporting. Affected taxpayers should explore creative procedural options for accelerating their cases, which could allow them to obtain clarity and resolve their issues far more quickly.

Lessons From 2019: Impact of BEPS on Cross-Border Transactions
In 2019, a number of common themes emerged from cross-border transactions that have continued to demonstrate the impact of the 2014 Base Erosion and Profit Shifting actions. These themes, which we anticipate will gain even more traction in the coming years, impact all stages of a transaction, including due diligence, structuring and valuation, integration, reporting and ongoing operation of group structures.

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