Taking a step into the digital age, the European Commission announced that the 2020s shall become the EU’s Digital Decade. The EU’s digitalization, including in the area of health, is one of the Commission’s key priorities and covers a wide range of actions and related initiatives.

Building on prior initiatives, in 2019 the Commission announced six key priorities (since supplemented by the COVID-19 recovery plan) that would shape the coming five years of policy making. One of these six key priorities is to create a Europe fit for the digital age and work on a digital strategy that will empower people with a new generation of technologies.

Artificial Intelligence; Big Data; Cybersecurity; European Union; FinTech; Health Privacy; International; Legislation; Policy

U.S. Office of the Comptroller of the Currency Finalizes Fair Access Requirements

Jan 20 2021

David Teitelbaum and Kerry Ann Nilsen

On January 14, 2021, the U.S. Office of the Comptroller of the Currency (OCC) issued its controversial final rule (Rule)¹ to establish a new requirement for covered banks to provide “fair access” to financial services to both natural persons and legal entities.² The preamble to the Rule explains that it is intended to address situations in which large banks have denied access to financial services on the basis of a prospective customer’s industry affiliation or connection with a politically unpopular, but lawful, activity. The Rule instead requires, among other things, that access to all financial services at covered banks be provided on the basis of a person’s individual characteristics evaluated under quantitative, impartial risk-based criteria. The OCC claims that these fair access standards do not, however, require that a covered institution provide any specific type of financial service, do business with a particular person or industry, or operate in a particular market. Nonetheless, in part because of the perception that the Rule will impair the ability of banks to take into account issues like climate change in making underwriting decisions, the fate of the Rule under the Biden administration remains uncertain.

Financial Privacy; FinTech; Policy

UK FCA Expectations on Call Recording in a Remote Working Environment — Market Watch 66

Jan 19 2021

Leonard Ng

On 11 January 2021, the UK Financial Conduct Authority (FCA) published the 66th edition of its Market Watch newsletter. The newsletter sets out the FCA’s expectations for firms on recording telephone conversations and electronic communications when alternative working arrangements are in place, including increased homeworking in light of the COVID-19 pandemic.

The newsletter follows on from an update on 8 January 2021 to the market trading and reporting statement on the FCA’s Coronavirus (Covid-19): Information for firms webpage. In that update, the FCA notes that, given the extensive duration of alternative working arrangements during the pandemic, the FCA now expects firms to record all relevant communications (including voice calls) when working outside the office.

Communications Privacy; Financial Privacy; International; Policy

Preparing Your 2020 Form 10-K: A Summary of Recent Key Disclosure Developments, Priorities, and Trends

Jan 13 2021

David C. Buck, John P. Kelsh, Lindsey A. Smith, Istvan A. Hajdu, Andrea L. Reed, Sara M. von Althann and Sylvia G. Baraniewski

This Sidley Practice Note highlights certain key disclosure considerations for preparing your annual report on Form 10-K for fiscal year 2020, including recent amendments to U.S. Securities and Exchange Commission (SEC) disclosure rules and other developments that will affect 2020 Form 10-K filings as well as certain significant disclosure trends and current areas of SEC staff focus for disclosures. Appendix A to this Practice Note sets forth a summary checklist of significant Regulation S-K amendments affecting 2020 Form 10-K filings, which are discussed in further detail. As always, we invite you to contact us with any questions on these topics or any other SEC reporting and compliance matters.

Cybersecurity; General; SEC

Trump Executive Order Blocks Transactions With Certain Chinese Software Applications

Jan 08 2021

Andrew W. Shoyer, Eric M. Solovy, Michael E. Borden, Kwaku Akowuah, Lei Li, Jen Fernandez and Carys Golesworthy

On January 5, 2021, President Donald Trump signed Executive Order (EO) 13971, banning certain transactions and activities with persons who “develop or control” eight Chinese “connected software applications,”¹ specifically Alipay, CamScanner, QQ Wallet, SHAREit, Tencent QQ, VMate, WeChat Pay, and WPS Office. The prohibitions will come into effect 45 days after the issuance of the order, that is, February 19.

Cybersecurity; Data Breaches; National Security; Policy

Regulatory Update: NAIC Fall 2020 National Meeting

Dec 28 2020

Stephanie H. Dobecki, Ellen M. Dunn, Andrew Holland, Michael L. Rosenfield, Chris Burusco and Sara N. Africano

The National Association of Insurance Commissioners (NAIC) held its Fall 2020 National Meeting (Fall Meeting) December 3-9, 2020. As a result of the continuing COVID-19 pandemic, the NAIC once again met in a virtual format. This Sidley Update summarizes the highlights from this meeting in addition to interim meetings that were held during November in lieu of taking place during the Fall Meeting.

Insurance; NAIC; Policy

FinCEN Proposes Tracking and Reporting Virtual Currency Transactions Involving Unhosted Wallets

Dec 24 2020

Sujit Raman, David Teitelbaum and Lilya Tessler

On December 18, 2020, the Financial Crimes Enforcement Network (FinCEN) issued a notice of proposed rulemaking (NPR) regarding a proposal to impose on banks¹ and money service businesses (MSBs) new recordkeeping, reporting, and identity verification requirements in relation to certain transactions involving convertible virtual currency (CVC) or digital assets with legal tender status (legal tender digital assets or LTDA)² if the counterparty to the transaction does not have an account with, including a digital asset wallet hosted by, a financial institution regulated under the U.S. Bank Secrecy Act (BSA) or certain foreign financial institutions not located in designated problematic jurisdictions. If adopted, the proposed rule will impose significant new burdens only on banks and MSBs involved in digital asset businesses and undercut the role of U.S. institutions in digital asset economies, including in the growing area of “decentralized finance.” The NPR proposes to exclude broker-dealers, futures commission merchants, and mutual funds, among others that are subject to the BSA from these new reporting requirements, but specifically requests the industry’s comment on whether these types of institutions should also be included within the scope of the rule.

Affected institutions will have very limited time to assess and comment on the NPR, as the comment period closes on January 4, 2021, notwithstanding two intervening federal holidays.

Cybersecurity; Enforcement; Financial Privacy; FinTech; National Security; Regulation

A Digital Europe – Digital Health and other Recent EU Data Initiatives

U.S. Office of the Comptroller of the Currency Finalizes Fair Access Requirements

UK FCA Expectations on Call Recording in a Remote Working Environment — Market Watch 66

Preparing Your 2020 Form 10-K: A Summary of Recent Key Disclosure Developments, Priorities, and Trends

Trump Executive Order Blocks Transactions With Certain Chinese Software Applications

Regulatory Update: NAIC Fall 2020 National Meeting

FinCEN Proposes Tracking and Reporting Virtual Currency Transactions Involving Unhosted Wallets

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Data Protection in Financial Services Week 2021