Highest European Court Confirms: No Presumption of Confidentiality Over Documents Submitted in Marketing Authorization Dossier

On January 22, 2020, the Court of Justice of the European Union (CJEU) found that there is not a general presumption of confidentiality over documents containing clinical and preclinical data provided to the European Medicines Agency (EMA) to support a marketing authorization application. However, the CJEU indicated that certain information may be protected if the interested party can specifically show that the disclosure will cause it harm. This is the first time the CJEU has ruled on this matter, upholding the EMA’s approach to handling access to documents requests.

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SEC and FINRA Issue 2020 Examination Priorities (Including Cybersecurity) for Broker-Dealers and Investment Advisers

The U.S. Securities and Exchange Commission’s (SEC) Office of Compliance Inspections and Examinations (OCIE) and the Financial Industry Regulatory Authority (FINRA) recently published their examination priorities (together, the Examination Priorities) for the 2020 calendar year.1 In general, the 2020 Examination Priorities continue recurring themes from recent prior years.

OCIE’s 2020 Examination Priorities for broker-dealers and investment advisers include the protection of retail investors (including compliance with new standard of care requirements and interpretations), cyber and information security risks, anti-money laundering compliance, firms engaging in the digital asset space and the provision of electronic investment advice.

FINRA’s 2020 Examination Priorities for member firms include those generally identified by OCIE for registered broker-dealers, as well as cash management and bank sweep programs, initial public offerings, liquidity management, trading authorizations and order routing and vendor display rule requirements, among others.

This post summarizes selected aspects of the Examination Priorities that may be of particular interest to broker-dealers and investment advisers. As always, firms should use the 2020 Examination Priorities to review their compliance and supervisory procedures carefully and make any necessary revisions. Firms also should be prepared to explain their compliance and supervisory policies in these areas in their upcoming SEC and/or FINRA examinations, as applicable, and provide documentation of relevant reviews.

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The California Consumer Privacy Act: What Happened and What’s to Come

Last year ended with businesses scrambling to be ready for the California Consumer Privacy Act’s January 1 deadline. The CCPA’s entry into force did not, however, resolve implementation complexities or answer myriad questions about how the Act will be interpreted. Moreover, the California Attorney General will finalize regulations during 2020 that are likely to expand compliance obligations and narrow flexibility. How are companies handling these uncertainties? What should companies be doing to prepare for CCPA enforcement beginning on July 1, 2020? How can “reasonable security” be documented?

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Treasury Releases New CFIUS Regulations

On January 13, 2020, the U.S. Department of the Treasury (Treasury) issued final and interim regulations implementing the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), which expands the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS) to review foreign investments and mitigate any potential national security concerns. While the final regulations largely track the proposed regulations issued on September 17, 2019, Treasury has made refinements and added several clarifying examples. See Sidley’s previous Update on the proposed regulations.

Following the structure of the proposed regulations, the final regulations were issued in two parts: one part covers investments in real estate, available here, while the other covers certain other investments in U.S. businesses, available here. Treasury simultaneously released a number of frequently asked questions on the proposed regulations, available here, and a fact sheet, available here.

The final CFIUS regulations will go into effect on February 13, 2020.

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New Guidance Published Addressing Scientific Research and the GDPR

A recent opinion from the European Data Protection Supervisor (EDPS) on data protection and scientific research builds on an opinion from January 2019 from the European Data Protection Board on the GDPR and clinical trials. The Opinion from the EDPS should be taken into account by life sciences companies in their ongoing assessment of how to apply the GDPR to scientific research both in clinical trials and more broadly.

The EDPS – an independent supervisory authority whose primary objective is to ensure that European institutions and bodies respect the right to privacy and data protection – recently published a preliminary opinion on data protection and scientific research (the Opinion). The EDPS acknowledges the critical importance of scientific research but states that “data protection obligations should not be misappropriated as a means […] to escape transparency and accountability.”  In particular, according to the EDPS, compliance with data protection laws is “wholly compatible” with responsible scientific research. However, the EDPS recommends intensifying dialogue between data protection authorities (DPAs) and ethical review boards for a common understanding of which activities amount to genuine research and expects further guidance to be published by the European Data Protection Board – an independent European body, composed of representatives of the national DPAs and the EDPS.

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SEC Warns Investors Regarding Digital Asset Initial Exchange Offerings

On January 14, 2020, the U.S. Securities and Exchange Commission (SEC) Office of Investor Education and Advocacy published an investor alert (Alert) regarding initial exchange offerings (IEOs), a type of digital asset fundraising facilitated by online trading platforms.1 Although the Alert is directed at investors, it provides important information to blockchain companies and trading platforms. The Alert highlights the following:

  • an explanation of an IEO
  • IEOs that are securities offerings must comply with federal securities laws
  • a platform offering an IEO may need to register as a broker-dealer, national securities exchange or operate pursuant to an exemption, such as an alternative trading system (ATS)
  • IEOs offered to U.S. investors, even if offered from outside the United States, must comply with federal securities laws

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