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New Know-Your-Customer and Reporting Rules Proposed for Cloud Providers: Five Key Takeaways

Last week, the U.S. Department of Commerce published a notice of proposed rulemaking (NPRM) implementing Executive Orders (EO) 13984 and 14110 to prevent “foreign malicious cyber actors” from accessing U.S. infrastructure as a service products1 (IaaS Rule). The IaaS Rule seeks to strengthen the U.S. government’s ability to track “foreign malicious cyber actors” who have relied on U.S. IaaS products to steal intellectual property and sensitive data, engage in espionage activities, and threaten national security by attacking critical infrastructure.

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U.S. CFTC Seeks Public Input on Use of Artificial Intelligence in Commodity Markets and Simultaneously Warns of AI Scams

The staff of the Commodity Futures Trading Commission (CFTC) is seeking public comment (the Request for Comment) on the risks and benefits associated with use of artificial intelligence (AI) in the commodity derivatives markets. According to the Request for Comment, the staff “recognizes that use of AI may lead to significant benefits in derivatives markets, but such use may also pose risks relating to market safety, customer protection, governance, data privacy, mitigation of bias, and cybersecurity, among other issues.”

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Unofficial Final Text of EU AI Act Released

On 22 January 2024, an unofficial version of the (presumed) final EU Artificial Intelligence Act (“AI Act”) was released. The AI Act reached political agreement early December 2023 (see our blog post here) and had undergone technical discussions to finalize the text since. It was reported that the document was shared with EU Member State Representatives on 21 January 2024, ahead of a discussion within the Telecom Working Party, a technical body of the EU Council on 24 January 2024, and that formal adoption at the EU Member State ambassador level (i.e. COREPER) will likely follow on 2 February. On Friday 26 January 2024, the Belgian Presidency of the Council officially shared the (analysis of the) final compromise text of the AI Act with Member State representatives – clearly indicating that this text will be put forward for adoption.

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Preparing for the EU AI Act: Part 2

Join Sidley and OneTrust DataGuidance for a reactionary webinar on the recently published, near-final text of the EU AI Act on February 5, 2024. This discussion with industry panelists will cover initial reactions to the text of the EU AI Act following finalization by EU legislators and examine the key points in the AI Act that businesses need to understand.

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Federal and State Regulators Fine Foreign Bank for Unauthorized Disclosure of Confidential Supervisory Information

On January 17, 2024, the New York Department of Financial Services (NYDFS) entered into a consent order with Industrial and Commercial Bank of China Ltd. (ICBC or the Bank), resolving a matter in which ICBC’s New York branch disclosed confidential supervisory information (CSI) without authorization. The order includes a civil monetary penalty of $30 million. Two days later, the Board of Governors of the Federal Reserve System (Federal Reserve) entered into a consent cease-and-desist order with ICBC and its New York branch that includes a fine of approximately $2.4 million for the unauthorized disclosure of CSI. The Federal Reserve specifically noted that its action was taken in conjunction with the prior action of NYDFS.

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EU Reaches Political Agreement on Cyber Resilience Act for Digital and Connected Products

On 30 November 2023, the EU reached political agreement on the Cyber Resilience Act (“CRA”), the first legislation globally to regulate cybersecurity for digital and connected products that are designed, developed, produced and made available on the EU market. The CRA was originally proposed by the European Commission in September 2022. Alongside the recently adopted Data Act, Digital Operational Resilience Act (“DORA”), Critical Entities Resilience Act (“CER”), Network and Information Systems Security 2 Directive (“NISD2”) and Data Governance Act, the CRA builds on the EU Data and Cyber Strategies, and complements upcoming certification schemes, such as the EU Cloud Services Scheme (“EUCS”) and the EU ICT Products Scheme (“EUCC”). It responds to an increase in cyber-attacks in the EU over the last few years – in particular the rise in software supply chain attacks which have tripled over the last year –as well as the significant rise in digital and connected products in daily life which magnifies the risk of such attacks.

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Regulatory Update: National Association of Insurance Commissioners Fall 2023 National Meeting

The National Association of Insurance Commissioners (NAIC) held its Fall 2023 National Meeting (Fall Meeting) from November 30 through December 4, 2023. This Sidley Update summarizes the highlights from this meeting in addition to interim meetings held in lieu of taking place during the Fall Meeting. Highlights include adoption of a new model bulletin addressing the use of artificial intelligence in the insurance industry, continued development of accounting principles and investment limitations related to certain types of bonds and structured securities, and continued discussion of considerations related to private equity ownership of insurers.

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Trend Watch 2024: Hot Topics in California Regulation and Litigation

Join our 7th annual Trend Watch webinar to learn how tactical decision-making can help you conquer California’s challenging legal environment. Our focus areas will include:

  • New developments in California privacy law
  • Prop. 65 by the numbers
  • Need-to-know environmental law changes

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Meet the Team

<a target=‘_blank’ href="https://www.sidley.com/en/people/a/akowuah-kwaku-a">Kwaku A. Akowuah</a>

Kwaku A. Akowuah

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/a/armbrust-sheila-a-g">Sheila A.G. Armbrust</a>

Sheila A.G. Armbrust

San Francisco
<a target=‘_blank’ href="https://www.sidley.com/en/people/b/blythe-francesca">Francesca Blythe</a>

Francesca Blythe

London
<a target=‘_blank’ href="https://www.sidley.com/en/people/b/brown-colleen-theresa">Colleen Theresa Brown</a>

Colleen Theresa Brown

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/c/cunningham-thomas-d">Thomas D. Cunningham</a>

Thomas D. Cunningham

Chicago
<a target=‘_blank’ href="https://www.sidley.com/en/people/f/flanagan-sharon-r">Sharon R. Flanagan</a>

Sharon R. Flanagan

San Francisco, Palo Alto
<a target=‘_blank’ href="https://www.sidley.com/en/people/g/gordon-david-a">David A. Gordon</a>

David A. Gordon

Chicago
<a target=‘_blank’ href="https://www.sidley.com/en/people/i/ishiara-tomoki">Tomoki Ishiara</a>

Tomoki Ishiara

Tokyo
<a target=‘_blank’ href="https://www.sidley.com/en/people/l/lally-amy-p">Amy P. Lally</a>

Amy P. Lally

Century City
<a target=‘_blank’ href="https://www.sidley.com/en/people/l/lashway-david-c">David C. Lashway</a>

David C. Lashway

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/l/long-william-rm">William RM Long</a>

William RM Long

London
<a target=‘_blank’ href="https://www.sidley.com/en/people/l/loughnane-joan-m">Joan M. Loughnane</a>

Joan M. Loughnane

New York
<a target=‘_blank’ href="https://www.sidley.com/en/people/m/malhotra-geeta">Geeta Malhotra</a>

Geeta Malhotra

Chicago
<a target=‘_blank’ href="https://www.sidley.com/en/people/r/ransom-rollin-a">Rollin A. Ransom</a>

Rollin A. Ransom

Los Angeles
<a target=‘_blank’ href="https://www.sidley.com/en/people/r/raul-alan-charles">Alan Charles Raul</a>

Alan Charles Raul

Washington, D.C., New York
<a target=‘_blank’ href="https://www.sidley.com/en/people/s/seale-jennifer-b">Jennifer B. Seale</a>

Jennifer B. Seale

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/t/tham-yuet-ming">Yuet Ming Tham</a>

Yuet Ming Tham

Singapore, Hong Kong
<a target=‘_blank’ href="https://www.sidley.com/en/people/w/wilan-jonathan-m">Jonathan M. Wilan</a>

Jonathan M. Wilan

Washington, D.C.
<a target=‘_blank’ href="https://www.sidley.com/en/people/w/woods-jr-john-w">John W. Woods Jr.</a>

John W. Woods Jr.

Washington, D.C.

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