EIOPA Publishes Consultation on Opinion on AI Governance and Risk Management
On February 12, 2025, the European Insurance and Occupational Pensions Authority (“EIOPA”) published a consultation on its draft opinion on artificial intelligence (“AI”) governance and risk management (the “Opinion”).
Artificial Intelligence: U.S. Securities and Commodities Guidelines for Responsible Use
Despite recent focus on artificial intelligence (AI) by U.S. financial regulators, the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and Financial Industry Regulatory Authority (FINRA) have not yet issued new regulations specifically addressing the use of AI. Nonetheless, during the Biden administration, guidance from these agencies emphasized the necessity of responsible use of AI within existing regulatory frameworks, urging market participants to exercise additional diligence to navigate compliance risks associated with AI usage.
U.S. Copyright Office Issues Report on Artificial Intelligence and Copyrightability
On January 29, 2025, the U.S. Copyright Office issued the second part of its Report on Copyright and Artificial Intelligence, following a Notice of Inquiry (NOI) the Office issued in 2023. The first part of the Office’s Report, released in July 2024, addressed digital replicas. This second part addresses copyrightability, an issue that attracted considerable interest from authors, artists, and the media and technology industries — approximately half of the more than 10,000 comments that the Office received in response to the NOI addressed copyrightability questions.
With New Technologies Come New Risks: FINRA Issues 2025 Regulatory Oversight Report
Last week, the Financial Industry Regulatory Authority (FINRA) published its 2025 Annual Regulatory Oversight Report. The 80-page report hits on a number of familiar themes and subjects and includes two new areas of focus: 1) risks arising from the use of third-party vendors, including cybersecurity and data privacy risks, and 2) extended-hours trading services, which have become increasingly common across the industry. FINRA offers new observations regarding registered index-linked annuities (RILAs) in the context of Reg BI obligations. The report also reflects FINRA’s increased scrutiny of risks associated with emerging technologies, with a particular focus on generative artificial intelligence (AI) tools. Additionally, although much of the report repeats items included in prior years, it provides useful, comprehensive checklists reflecting FINRA’s views on the various topics and risk areas covered. Efforts to operationalize some of the items raised can present unique challenges, and we encourage you to reach out to a Sidley contact to talk further about particular concerns raised in the report.
New U.S. Export Controls on Advanced Computing Items and Artificial Intelligence Model Weights: Seven Key Takeaways
On January 15, 2025, the U.S. Department of Commerce Bureau of Industry and Security (BIS) published in the Federal Register updated export controls on advanced computing items (including advanced integrated circuits (ICs) and related equipment, software, and technology) and, for the first time, controls on artificial intelligence (AI) model weights under the Export Administration Regulations (EAR). These new regulations were published as an interim final rule and took effect on January 13, 2025, although compliance is not required until May 15, 2025. BIS also published in the Federal Register a smaller companion rule on January 16, 2025, that expands licensing requirements on foundries and packaging companies seeking to export advanced computing equipment and requires compliance by January 31, 2025.
Action Items for U.S. Public Companies for 2025
Rapid rulemaking and aggressive enforcement by the SEC, combined with legislative, judicial, and regulatory developments, have created new requirements and expectations for U.S. public companies.
NHTSA Proposes Sweeping Voluntary Program for Vehicles With Automated Driving Systems
On December 19, 2024, the Chief Counsel of the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA or the Agency) signed a notice of proposed rulemaking (NPRM) in which the Agency proposed a sweeping voluntary program relating to the evaluation and oversight of motor vehicles equipped with automated driving systems (ADS). NHTSA defines ADS-equipped vehicles, which can also be called autonomous vehicles (AVs), as vehicles designed to fully perform the driving task without any expectation of an attentive human driver.
Looking Ahead to 2025 in EU Cybersecurity Developments
As 2024 draws to a close, we look ahead to notable upcoming cyber developments in the new year. From the adoption of new cyber laws to the initiation of infringement proceedings by the European Commission against a number of EU Member States for alleged failures to adequately implement the EU Network and Information Systems Security 2 Directive, the EU continues to emphasize cybersecurity in a rapidly evolving legal and technological environment. There are no signs of this momentum slowing down in 2025.
CMS Proposes Artificial Intelligence Limits and Utilization Management Guardrails for Medicare Advantage
On December 10, 2024, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule with technical changes for the Medicare Advantage (MA) Program and the Medicare Prescription Drug Benefit Program for Calendar Year 2026 (Proposed Rule). Citing the growing use of Artificial Intelligence (AI) within the healthcare sector and reports that the use of AI may lead to “algorithmic discrimination” that exacerbates inequalities within healthcare, CMS proposes, for the first time, new guardrails that must be adopted by MA plans when using AI to manage patient care. CMS also proposes several reforms addressing utilization management (UM) techniques adopted by MA plans, including requirements for such plans to conduct and report detailed analyses on the use of prior authorizations. Notably, the Proposed Rule primarily modifies MA regulations, without direct application to the Medicare Part D prescription drug program.
Post-Election Landscape: New Risks, New Opportunities
Sidley thought leaders explored risks and opportunities of a second Trump administration in a “lightning round”, covering key practice areas. Change is coming and along with it, new and fast-paced risks and opportunities.
