SEC Ban on China-Based VIEs: Is There a Solution to the Impasse?
On September 20, 2021, the SEC published a warning to investors regarding U.S.-listed shell companies operating businesses in China through a VIE structure, which is employed in countless IPOs in the U.S., in light of strict restrictions on foreign equity ownership of Chinese companies in critical sectors such as education or telecommunications.Read full story
How Reg BI differentiates among other regulation regimes
In June 2019, the Securities and Exchange Commission (“SEC”) adopted Regulation Best Interest (“Reg BI” or “Final Rule”) with a compliance date of June 30, 2020, aiming at improving protection for retail customers and enhancing the standard of conduct under the Securities Exchange Act of 1934 (“Exchange Act”) for broker-dealers and natural persons who are associated persons of a broker-dealer (“Broker-Dealers”) in the course of recommending any securities transaction or investment strategy to retail customers. The SEC also mandates a disclose form for investment advisers and broker-dealers (“Form CRS”). Additionally, the SEC excludes application to broker-dealer from the Investment Adviser Act of 1940 (“IAA”) if the “solely incidental” prong is satisfied.Read full story