On October 20, 2023, the U.S. Federal Aviation Administration (FAA) issued advisory circular (AC), AC 450.45-1: “Launch and Reentry of Space Nuclear Systems.” AC 450.45-1 provides guidance on the licensing process for the launch into space and reentry of nuclear technologies and radionuclides (referred to in the guidance and this alert as “space nuclear systems” or SNS). The AC addresses the safety review requirements and payload determinations of the FAA regulations and offers guidance and regulatory compliance methods to those seeking to launch or reenter SNS.

We recently waved goodbye to 2023, and we remember many things from last year (besides Taylor Swift), including two important letters—A.I. These two letters arguably received more attention than any others, ranging from companies developing and implementing breakthrough AI technology, to government regulators expressing caution and high school students becoming best friends with ChatGPT. As AI expands into virtually every industry—whether cutting edge technology and financial companies or “old school” industries, such as construction and transportation—another letter merits our attention: the letter G.

Under the U.S. system, based on the common law, a trust is a useful and common planning tool for estate, and sometimes income, tax planning. But a trust structure can be problematic in certain civil law jurisdictions, such as those in many European countries. A Liechtenstein Stiftung is a planning option used by many in civil law jurisdictions to create a trust-like structure (and is typically taxed as a trust in the U.S.) for planning purposes.

Speaking at an annual national bankruptcy conference decades ago, a prominent bankruptcy judge stated that “if you think about whether a contract is executory or not for more than a few minutes, then you have spent too much time thinking about it.” By this, the judge seemed to imply that (subject to the express exceptions contained in the Bankruptcy Code) a debtor should be relieved from financially burdensome obligations (or be able to take advantage of a better opportunity) through the mechanism of contract rejection, thus (1) avoiding specific performance under applicable non-bankruptcy law, and (2) leaving the counterparty with only a prepetition general unsecured creditor for its breach-of-contract damages. The bankruptcy court’s recent decision in In re Le Yang, Case No. 23-00075 (Bankr. S. D. IN October 23, 2023) may call into question such approaches, policy and results, and reinforce the minority of decisions that do not allow the rejection of real estate purchase options.

The Fair Labor Standards Act (FLSA) requires employers to provide minimum wage and overtime pay to qualified employees—but not to independent contractors. Many employees, especially full-time employees, are also entitled to various statutory benefits, such as state law paid sick leave entitlements, workers’ compensation benefits, unemployment benefits, and to benefits under an employer’s ERISA-governed benefit plans, such as group health insurance policies and 401(k) plans. Failure to properly classify workers as employees can therefore result in substantial damages and penalties, even if the misclassification is unintentional, as described in more detail below. Correctly classifying workers is therefore of significant importance.

On December 26, 2023, the Department of Defense (DoD) issued the long-awaited Cybersecurity Maturity Model Certification (CMMC) proposed rule and related guidance. As we have previously reported, CMMC is a program developed by the DoD to protect the Defense Industrial Base from cyber threats. Under this program, nearly all DoD contractors and subcontractors would be required to achieve certain levels of cybersecurity maturity. The DoD first announced the CMMC program in 2019, then issued an initial version of the program (CMMC 1.0) in November 2020. In November 2021, the DoD announced that it would be overhauling the CMMC Program and replacing it with CMMC 2.0. The purpose of CMMC 2.0 was to restructure the CMMC Program and to reduce the cost and administrative burden of achieving cybersecurity compliance. The newly released proposed rule implements many aspects of CMMC 2.0 and introduces additional requirements. Below is a summary of some of the key aspects of the new rule. If implemented, the proposed rule would represent the DoD’s first implementation of the much-debated CMMC Program. Comments on the proposed rule are due on February 26, 2024.

The SEC's sweeping Cybersecurity Disclosure Final Rules put registrants on a tight deadline—just four business days to disclose material cybersecurity incidents.

On December 23, 2023, New York Governor Kathy Hochul vetoed a bill that would have imposed a broad ban on non-compete agreements in New York. The legislation proposed a sweeping and aggressive prohibition of new non-compete agreements with employees and other workers and service providers, without any exceptions for highly compensated employees, for partners leaving a partnership or even for non-competes entered into in the sale of a business context.

In the waning days of 2023, Louisiana became the third state granted authority by the U.S. Environmental Protection Agency (EPA) under the Safe Drinking Water Act (SDWA) to permit and regulate Class VI underground injection control (UIC) wells—i.e., wells permitted specifically for long-term, deep geological storage of carbon dioxide (CO₂) and which are critical to the full-scale development of commercial geological carbon sequestration. Until now, only North Dakota (2018) and Wyoming (2020) had been granted primacy, and Louisiana becomes the first state to receive this “primacy” status under the Biden Administration.

With the Iowa Republican Caucus happening in mid-January and dozens of additional primaries and caucuses to follow before the 2024 general election, broadcasters need to be aware of the use of artificial intelligence (AI), deepfakes and synthetic media in political advertising and the various laws at play when such content is used. These laws seek to ensure that viewers and listeners are made aware that the person they are seeing or the voice they are hearing in political advertising may not be who it looks like or sounds like. Campaigns, political committees, super PACs, special interest groups and other political advertisers are using AI, deepfakes and synthetic media in advertisements, making it easier to mislead and misinform viewers and listeners.

On December 8, 2023, the National Institute of Standards and Technology (NIST) issued the “Draft Interagency March-In Framework” that would provide guidance to agencies on the prerequisites for exercising march-in rights, and, if those prerequisites are met, on facts to be gathered by the agency, and factors to consider in determining whether to require a contractor, assignee or exclusive licensee of an invention made under a government contract or funding agreement to grant a license to practice the invention. The comment period closes on February 6, 2024, after which point, NIST is expected to finalize the framework.

On October 26, 2023, the Department of Energy (DOE) released a notice of proposed rulemaking to propose a comprehensive revision to its acquisition regulations. The DOE and the National Nuclear Security Administration (NNSA) promulgate the Department of Energy Acquisition Regulation (DEAR) to provide uniform acquisition policies and procedures for the DOE and NNSA. The notice of proposed rulemaking clocks in at over 100 pages in length, making for dense reading. Companies that regularly contract with the DOE, however, will likely want to at least peruse the proposed rule for relevant changes in this first comprehensive re-write of the DEAR in decades.

In a matter of great interest to asset recovery litigants, after nearly two decades of cooperation between U.S. and China law enforcement authorities, Xu Guojun, who fled China in 2001, was sentenced in China to life imprisonment for corruption and embezzlement of nearly $500 million from the Bank of China.

As enacted by the Inflation Reduction Act of 2022 (IRA), section 45V of the Internal Revenue Code (IRC) grants a clean hydrogen production credit (CHPC) for each kilogram of clean hydrogen produced by a taxpayer at a qualified clean hydrogen production facility. The available credit amount under IRC section 45V varies based on the lifecycle greenhouse gas (GHG) emissions generated from the qualified hydrogen production facility (as well as the taxpayer’s compliance with the IRA’s new prevailing wage and apprenticeship requirements). The maximum credit amount is $3.00 per kilogram of clean hydrogen, which requires a lifecycle GHG emissions rate of less than 0.45 kilograms of CO2e per kilogram of hydrogen.

The Federal Communications Commission (FCC) first adopted rules in 1998 restricting the use and disclosure of customer proprietary network information (CPNI), which refers to data collected by telecommunications carriers about their customers’ usage patterns, including call information, and service and billing details. The rules were updated in 2007 to, among other things, apply to interconnected VoIP providers and require that federal law enforcement (United States Secret Service and the FBI) and customers be notified of data breaches involving CPNI. In 2013, the rules were further amended to cover telecommunications relay service providers. The FCC revised the rules again in 2016 to require providers to notify customers, the FCC, FBI and Secret Service of data breaches unless the provider reasonably determined that no harm to customers was “reasonably likely to occur.” However, in 2017, Congress nullified the FCC’s 2016 Order by invoking the seldom used Congressional Review Act (CRA), which is a tool Congress can use to overturn certain federal regulatory actions.

This article provides overviews the status of PFAS regulation in the United States. Given the ubiquity of PFAS in commercial products, the expectation is that the United States’ regulation of PFAS and liability risks associated with PFAS will be of interest to a wide array of Japanese businesses, including specialty chemical companies, industrial manufacturers, oil and gas operations, and trading companies. Indeed, it is to be understood that many businesses, including those that have never knowingly used PFAS in their operations, may have a nexus to PFAS without knowing that they do. This article briefly describes PFAS, the types of products that include it, the recent wave of litigation involving PFAS contamination, which has involved settlements above $10 billion, and developments in federal and state regulation of these chemicals. This is followed by a brief discussion of specific scenarios in which these developments may affect Japanese corporations. The article ends with the recommendation that businesses that manufacture, distribute, use, or dispose of PFAS or products containing PFAS should stay abreast of these developments and develop proactive strategies to minimize their potential liability.

The Federal Communications Commission (FCC) recently adopted a Second Report and Order (Order), Second Further Notice of Proposed Rulemaking (Further Notice), and Waiver Order that, among other things, take steps to protect Americans from illegal and unwanted text messages. The Federal Trade Commission puts the harm to consumers from scam text messages at $326 million for 2022, with other sources finding the harm reaching more than $20 billion. The FCC's actions are intended to bolster Americans' trust in text messages, which, unlike spam phone calls, are delivered to mobile devices without an option to ignore them before seeing some or all of the contents of the message.

As amended by the Inflation Reduction Act of 2022, section 45X of the Internal Revenue Code (IRC) grants an advanced manufacturing production credit (AMPC) to manufacturers who produce certain clean energy components in the United States. On December 14, 2023, the Internal Revenue Service (IRS) published proposed regulations [REG-107423-23] in the Federal Register providing further guidance on the AMPC. The proposed regulations supplement Notices 2022-27, 2023-18 and 2023-44 that were published on October 14, 2023, March 6, 2023, and June 20, 2023, respectively.

On December 4, 2023, the Department of Labor (DOL) published a final rule highlighting the federal government’s procurement interest in economy and efficiency which requires successor contractors or subcontractors to hire the predecessor’s employees, for the same or similar services, thus avoiding displacement of these employees. On July 19, 2022, we advised on this proposed rule in a client alert addressing the implementation of Executive Order 14055, Nondisplacement of Qualified Workers Under Service Contracts. The proposed rule required service contracts which succeed contracts for the same or similar services, and solicitations for such contracts, to include a nondisplacement clause to offer right of first refusal of employment under the successor contract.

On October 7, 2023, California Governor Gavin Newsom signed AB 1305 into law, requiring businesses marketing or selling voluntary carbon offsets (VCOs) or marketing products as having significantly reduced emissions within California to disclose on their website certain information concerning the projects that generated the VCOs and emission reductions. Additionally, AB 1305 requires the disclosure of certain information supporting any business activity or product purported to achieve net-zero emissions, carbon neutrality or a reduction in greenhouse gas (GHG) emissions. This law represents California’s latest attempt to reduce “greenwashing,” hold businesses accountable for claims concerning GHG emission reductions and intensify transparency within the VCO market. AB 1305 is effective January 1, 2024, and businesses are required to update their disclosures at least annually.

In October 2023, the U.S. Supreme Court agreed to hear an appeal of the Fourth Circuit's decision in Truck Ins. Exch. v. Kaiser Gypsum Co. (In re Kaiser Gypsum Co.), 60 F.4th 73 (4th Cir. 2023). An alert on the Fourth Circuit's decision can be found here.

Last week, NCAA President Charlie Baker, without advance notice, released a framework that, if adopted, would allow schools, for the first time, to directly pay student-athletes, fundamentally altering the NCAA’s current Name, Image and Likeness (NIL) rules and governance structure.

Share Repurchase Rule Postponed
On November 22, 2023, the Securities and Exchange Commission (SEC) issued an order postponing the effective date of the Share Repurchase Disclosure Modernization Rule (“Share Repurchase Rule”), which became effective on July 31, 2023. The postponement order was issued in light of the October 31, 2023, decision by the U.S. Court of Appeals for the Fifth Circuit. The decision by the Fifth Circuit granted a petition for review and remanded the rule to the SEC to “correct the defects” identified in the rule by November 30, 2023. As a result of the SEC’s postponement order, the Share Repurchase Rule is stayed pending further action by the SEC.

As amended by the Inflation Reduction Act of 2022, IRC 30D provides for a tax credit of up to $7,500 for a new clean vehicle, consisting of $3,750 if certain critical mineral requirements are met and $3,750 if certain battery components requirements are met. Under the relevant rules, vehicles placed in service beginning in 2024 are not eligible if the battery includes battery components manufactured or assembled by a foreign entity of concern (FEOC), while vehicles placed in service beginning in 2025 are not eligible if the battery contains certain critical minerals extracted, processed or recycled by an FEOC.

As described in our previous client alert, the Corporate Transparency Act (CTA), which becomes effective on January 1, 2024, creates novel obligations for millions of entities to report beneficial ownership information (BOI) and certain other information to FinCEN. This requirement extends to private entities previously not otherwise subject to any reporting requirements. Under prior FinCEN rulemaking (the BOI Rule), companies created or first registered after January 1, 2024, would have had only 30 calendar days (the notice date) after the date that is the earlier of the date on which a company receives actual notice or public notice that it has been created or registered to determine whether they are subject to the CTA and, if so, report required information to FinCEN. However, on November 29, 2023, FinCEN amended the BOI Rule to extend that reporting deadline to 90 calendar days after the notice date for companies created or first registered in 2024.

On November 17, 2023, the Internal Revenue Service (IRS) published proposed regulations [REG-132569-17] in the Federal Register providing further guidance on the Energy Investment Tax Credit (ITC) under section 48 of the Internal Revenue Code (IRC) of 1986, as amended. The proposed regulations expand on existing Treasury regulations under IRC section 48 to incorporate the changes made by the Inflation Reduction Act of 2022. As relevant here, the Inflation Reduction Act of 2022 extended the existing ITC for most projects that begin construction before January 1, 2024, and modified it by expanding the types of energy properties that are eligible for the credit, allowing for increased credit amounts for energy projects that satisfy the prevailing wage and apprenticeship requirements and providing opportunities for several bonus credits.

On October 18, 2023, the U.S. Nuclear Regulatory Commission (NRC) issued draft regulatory guide (DG), DG – 4034, for public comment. DG – 4034 includes a proposed Revision 4 for Regulatory Guide (RG) 4.7, “General Site Suitability Criteria for Nuclear Power Stations.” RG 4.7 provides guidance on the major health, safety and environmental site characteristics the NRC staff considers in determining the suitability of proposed sites for nuclear power plants. Essentially, it lays out the methods for determining whether a reactor may be located at a particular potential location.

The Annual Meeting
The International Counter Ransomware Initiative (CRI) is an international initiative comprising 48 countries, the European Union and INTERPOL. The United States is a prominent member of this group, not only in hosting this annual meeting but also by serving as the CRI Secretariat. The CRI aims to “undercut the viability of ransomware, pursue threat actors, counter illicit finance underpinning ransomware ecosystem, collaborate with the private sector to defend against ransomware attacks, and cooperate internationally to address all elements of the ransomware threats.” The CRI focuses on partnerships and information sharing to bolster collective security against ransomware threats.

On October 3, 2023, the Federal Acquisition Regulation (FAR) Council proposed two rules, Cyber Threat and Incident Reporting and Information Sharing and Standardizing Cybersecurity Requirements for Unclassified Federal Information Systems. The proposed rules partially implement Executive Order (EO) 14028, Improving the Nation’s Cybersecurity, which focuses on improving the nation’s cybersecurity and protecting against cyber threats by revamping incident reporting, information sharing for federal contractors and implementation of related cybersecurity policies. On November 1, 2023, the FAR Council extended the comment period for these proposed rules until February 2, 2024.

On November 1, 2023, the Armed Services Board of Contract Appeals (ASBCA or Board) issued its fiscal year (FY) 2023 annual report, covering the period from October 1, 2022, through September 30, 2023. During FY 2023, contractors filed 342 new appeals at the ASBCA. This activity represents a 15% decrease from the number of appeals docketed during FY 2022. In fact, this was the lowest number of docketed appeals during any fiscal year since 1979. A significant percentage of the appeals—105 of the 342 new cases (or roughly 30%)—were filed against the U.S. Army Corps of Engineers. Over the last 10 years, the U.S. Army Corps of Engineers has generally been the agency against which most new ASBCA appeals have been filed.

On October 10, 2023, the U. S. Securities and Exchange Commission (SEC) adopted amendments (Amendments) to the beneficial ownership reporting requirements for beneficial owners of more than 5% of a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (Exchange Act). The Amendments adopt, modify or decline to adopt the rule amendments initially proposed in the SEC’s February 10, 2022, release (2022 Proposals).

Charting Expectations for AI
The rapid pace of artificial intelligence (AI) development is exceeding expectations, making it difficult to predict the exact next wave of AI progress. Even with these challenges, several studies considering how AI impacts the workforce are finding consistent patterns in their forecasts. Studies find AI will affect a wide spectrum of jobs but emphasize the impact on lower-wage professionals. AI brings more opportunity but may not bring opportunity equally to all employment sectors. While the future workforce is uncertain, studies provide guidance on how companies working with AI can take precautionary measures now to help protect their workforce from AI-generated harms while also preparing their employees to benefit from AI’s potential for streamlining work and providing greater efficiencies in the office.

For distressed borrowers seeking to reorganize, the Bankruptcy Code provides multiple options, including reinstatement of prepetition defaulted and accelerated debt. Given recent staggering increases in interest rates, reinstatement can be an attractive option because it allows a debtor to de-accelerate a defaulted loan and reinstate the loan’s original terms, including the original interest rate, over a creditor’s objection by making the creditor’s claim “unimpaired.” Although reinstatement can be beneficial, courts are split on whether a debtor must pay a secured lender default-rate interest and fees as a condition to reinstating a loan under a chapter 11 plan.

On October 5, 2023, the Federal Acquisition Regulatory (FAR) Council issued an interim rule that implements the requirements of the Federal Acquisition Supply Chain Security Act (FASCSA) and creates three new FAR clauses that prohibit contractors from delivering or using covered articles and sources subject to exclusion or removal orders issued under the FASCSA. The FASCSA, which was signed into law on December 21, 2018, aims to prevent foreign adversaries from creating and exploiting vulnerabilities in information and communications technology to commit malicious cyber-enabled actions against the U.S. government. The FASCSA established the Federal Acquisition Security Council (FASC), an executive branch interagency council authorized to perform a variety of functions to further these goals.

In 2023, the name image and likeness (NIL) allowance, the transfer portal, conference realignment and the NCAA’s overall governance structure attracted a significant amount of media attention. But one of the most important issues in industry of collegiate athletics rules enforcement and collegiate sports law continues to be what, precisely, constitutes a “representative of [a university program’s] athletics interests,” colloquially known as a “booster.” That is, because, under long-standing NCAA legislation, member institutions are held responsible for the actions of their boosters under the very low evidentiary standard of “known or should have known.”

Following the October 7 attack on Israel by Hamas, the Treasury Department’s Office of Foreign Assets Control (OFAC) has undertaken several initial sanctions steps to counter terrorist financing and call attention to financing networks, ongoing proliferation and terrorist support by Iran and due diligence expectations.

On October 30, President Biden issued the long-awaited Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (AI), the first order to navigate AI’s impact across sectors and to help agencies and consumers harness the benefits of AI while mitigating risks.

On October 24, 2023, the Federal Deposit Insurance Corporation (FDIC), Board of Governors of the Federal Reserve System (FRB), and Office of the Comptroller of the Currency (OCC) issued a joint final rule that makes extensive amendments to the regulations that implement the Community Reinvestment Act (CRA). The agencies’ stated goal in issuing the Final Rule is to “strengthen and modernize” the CRA regulations, which have not been significantly revised in nearly three decades. The Final Rule is the culmination of a lengthy process that ends years of uncertainty about the fate of the agencies’ CRA regulations.

On October 26, 2023, the Government Accountability Office (GAO) published its Bid Protest Annual Report to Congress for Fiscal Year 2023. The GAO’s report, which is mandated by the Competition in Contracting Act, lists its key statistics for FY 2023 bid protest activity. The report also includes a chart providing similar bid protest statistics for fiscal years 2019 – 2023. This five-year snapshot provides some valuable insight into current bid protest trends and developments at the GAO.

In its Vision 2030 report, EY India projects that the number of global capability centers (GCCs) in India will increase from approximately 1,600 GCCs in 2023 to 2,400 GCCs in 2030, with the market size of GCCs increasing from about $43 billion to over $100 billion during this period. This dramatic increase forecasted by EY India is not surprising. GCCs provide a number of attractive benefits, including access to a very large pool of highly skilled IT resources in India, the ability to leverage this talent to build internal teams that can deliver on strategic digital initiatives with speed and agility, the opportunity to tap into India’s robust startup ecosystem, and the potential savings associated with lower labor rates and other costs of doing business in India.

In July 2023, the Occupational Safety and Health Administration (OSHA) finalized its “Improve Tracking of Workplace Injuries and Illnesses” rule, which requires establishments with 100 or more employees in certain designated high-hazard industries (including agricultural, food production, manufacturing, retail, wholesale, transportation, medical and entertainment) to electronically submit information from their OSHA Form 300 (Log of Work-Related Injuries and Illnesses) and Form 301 (Injury and Illness Incident Report) once a year. Specifically, employers must submit detailed information about each recordable injury and illness, including the date, physical location and severity of the injury or illness; details about the worker who was injured; and details about how the injury or illness occurred. The rule is effective on January 1, 2024, and annual reporting is due March 2, 2024, through OSHA’s Injury Tracking Application (ITA).

On September 27, 2023, after receiving over 7,500 public comments, the U.S. Department of Education (ED) announced final regulations concerning the Gainful Employment Rule and the financial value transparency (FVT) framework it had proposed in May. The final regulations were published in the Federal Register on October 10, 2023, and will take effect on July 1, 2024.

At its October 2023 Open Meeting, the Federal Communications Commission (FCC) proposed rules that, if adopted, would reclassify Broadband Internet Access Service (BIAS) as a telecommunications service and reinstate the Commission’s authority adopted in 2015 but discarded in 2018. The item was supported by the three Democrats on the Commission and opposed by the two Republican commissioners. Since 2005, when the FCC adopted its Internet Policy Statement, Commission leaders have sought to regulate or deregulate BIAS through policy statements, by placing conditions on internet access companies seeking to merge, and, most notably, by classifying internet access service as either an information service, which affords the FCC limited regulatory authority, or a telecommunications service, which gives the FCC more robust tools to regulate service provider conduct.

Federal consumer protection agencies and the White House have escalated their efforts to target so-called “junk” or surprise, add-on fees in a wide range of industries. The Biden Administration’s focus on junk fees has been intensifying since the beginning of 2022, as the White House has realized the popularity of these consumer protection measures in the midst of rising inflation. The Administration’s junk fee initiative, driven by the White House Competition Council formed in July 2021, is yielding new regulatory requirements across a wide swath of consumer-facing industries, and is likely to lead to enforcement actions in the not-too-distant future.

There has been a rush of news and debate around Artificial Intelligence (AI) since the launch of ChatGPT in late 2022. AI is nothing new; you likely interact with it every day via spellcheck, virtual assistants and email spam filters. Generative AI, however, and its mass adoption for both personal and professional use, is a more recent phenomenon, and you may not have considered the legal implications and potential impact on your association.

The 2023 taxation climate presents challenges—as well as opportunities—for wealthy individuals and families. This September, the Internal Revenue Service (IRS) announced its concentrated focus on high-income taxpayer compliance, while in June the IRS and Department of the Treasury released guidance that allows individuals, estates and trusts to benefit from certain new transfer opportunities of renewable energy credits. With the scheduled sunset of the all-time-high unified estate and gift tax exclusion amounts, as well as the IRS taking harsh positions against high-income earners, now is the time to consider opportunities for estate and tax planning. Very often, these opportunities to save tax will include making gifts to children, including in trust for them, and using the generation-skipping transfer (GST) exemption to make the potential transfer tax savings on that gift last through many generations.

On October 8, 2023, California Governor Gavin Newsom signed Senate Bill (SB) 54 into law. SB 54 will become effective on March 1, 2025, and will require “covered entities” to report demographic information regarding the founding teams of all businesses in which such “covered entities” had invested in the prior year. This report would be required annually and would be made to the California Civil Rights Department (CRD).

As has been widely reported, the Corporate Transparency Act (CTA) will become effective January 1, 2024, creating new obligations for millions of public and even the smallest private companies to report beneficial ownership information (BOI reports) with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Companies that are not exempt from CTA reporting (Reporting Companies), that are created or registered on or after the effective date, will have 30 days after they are formed, under current rules, to comply with the CTA reporting obligations. Non-exempt companies created before the effective date will have until December 31, 2024. For more information on the exemptions from the CTA, please refer to the Pillsbury Client Alert published on June 12, 2023.

In late 2022, the SEC adopted a new rule (Rule 10D-1) and rule amendments (collectively, the “Rules”) that, through listing standards promulgated by the national exchanges (primarily NYSE and Nasdaq), will require all issuers with securities listed in the United States to adopt an incentive-based compensation (IBC) recovery policy (hereinafter, a “clawback policy”). The Rules are sweeping and impact all domestic issuers, as well as foreign private issuers, including those whose only U.S.-listed securities are Level 2 and 3 ADRs. The NYSE and Nasdaq final listing rules implementing the Rules were approved by the SEC on June 9, 2023, and importantly, for NYSE and Nasdaq-listed companies, require the adoption of a compliant clawback policy by no later than December 1, 2023.

On September 20, the Department of Defense (DoD) announced nearly $240 million dollars to eight regional innovation hubs that will accelerate U.S. microelectronics manufacturing industry through the Microelectronics Commons, the Department’s newest program to accelerate product deployment from research to end commercialization. Companies working in the semiconductor industry should consider opportunities to partner and team with the established hubs that will be funding prototype projects key to the U.S. defense.