Global Investment Law Watch – Page 16 – Exploring the legal and regulatory issues affecting the worldwide investment community.

Asia: Singapore Tax, Implications of Section 10L on Investment Funds

Mar 14 2024

By: Edward Bennett, Roberta Chang, and Anita Zhou

Historically, Singapore has not taxed capital gains. However, since 1 January 2024, under the newly enacted Section 10L of the Income Tax Act 1947 of Singapore, gains received in Singapore from the sale or disposal of any foreign asset (e.g. shares issued by a company incorporated outside Singapore) by an entity within a multinational group will be treated as taxable income if the entity does not have adequate economic substance in Singapore. Section 10L is designed to address international tax avoidance risks and align the key areas of Singapore’s tax regime with international norms and the European Union’s Code of Conduct Group’s foreign source income exemption (FSIE) guidance.

Europe: Why Are Firms Currently Focusing on Derivatives Post Trade Reporting?

Mar 13 2024

By: Ron Feldman and Philipp Riedl

Deficiencies in compliance with derivatives post trade reporting rules have recently triggered regulator fines. Fin-FSA in Finland fined a pension fund €90K and the Central Bank of Ireland imposed the first fine on an investment fund, €192K. Although the fines are reasonably modest, they have sharpened industry focus on this issue.

Europe: ELTIF 2.0 Regime Goes Live in Ireland

Mar 11 2024

By: Gayle Bowen and Shane Geraghty

After much anticipation, the new ELTIF 2.0 regime has gone live in Ireland. The Central Bank has, this morning, issued a feedback statement outlining how its new regime will work. Key points include the following:

United States: Congress Criticizes VC Investments in China, Suggesting Broader Investment Restrictions Into China

Feb 29 2024

By: Jamie L. Jackson and Yuki Sako

The House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party (Select Committee) issued a bipartisan report criticizing investments made by US venture capital firms (VC), as well as US institutional investors as limited partners (LP), into companies in the People’s Republic of China (PRC) in artificial intelligence (AI) and semiconductor sectors (Report). In line with the Select Committee’s previously released report strategizing how to reset the United States’ economic and technological competition with China, the Report signals Congress’ intensified interest in curtailing the unintentional flow of US investments into China’s military industrial complex.

United States: Modernized SBIC Program Hits Milestones

Feb 27 2024

By: TJ Bright and Tristen C. Rodgers

For the past two decades, the Small Business Investment Company (SBIC) program (the SBIC Program) has primarily offered one type of government-guaranteed loan to private investment funds holding an SBIC license (SBICs): the “Standard SBIC Debenture.” This loan requires private funds to pay the U.S. Small Business Administration (SBA) interest semi-annually, which closely aligns with the cash flow patterns of mezzanine debt and private credit funds. As a result, the ecosystem of debt-focused SBICs has thrived. However, the SBIC Program has been less attractive to funds with equity-oriented strategies.

Australia: Australian Business Registry Services Engages with Directors to Apply for Identification Numbers

Feb 26 2024

By: Jim Bulling and Laura McFadzean

The Australian Securities and Investments Commission (ASIC) through the Australian Business Registry Services (ABRS) is actively engaging with directors who have not yet obtained a director identification number (DIN).

United States: CFTC Proposes Rule to Address Margin Adequacy and Treatment of Separate Accounts by FCMs

Feb 23 2024

By: Benjamin Skillin

On 20 February 2024, the CFTC approved a proposed rule that would apply a margin adequacy requirement to all futures commission merchants (FCMs), with respect to their customers. The new requirement—titled Regulation 1.44—is designed to ensure that an FCM does not permit a customer to withdraw funds from its account if the remaining balance would be insufficient to meet the customer’s initial margin requirements.

Australia: Not Done Yet: Australia’s Odyssey Into Regulating Artificial Intelligence (AI)

Feb 20 2024

By: Daniel Knight

On 31 January 2024, ASIC Chair Joe Longo outlined ASIC’s position on Australia’s AI regulatory landscape: while current laws offer some regulation, they fall short in effectively addressing the risks associated with AI.

United States: FinCEN Proposes AML Requirements on Registered Investment Advisers (including Exempt Reporting Advisers)

Feb 16 2024

By: Richard F. Kerr and Jennifer L. Klass

On 13 February 2024, the Financial Crimes Enforcement Network (FinCEN) issued a notice of proposed rulemaking (NPRM) that would impose anti-money laundering (AML) and counter-terrorist financing (CFT) requirements on Securities and Exchange Commission-registered investment advisers (the SEC, and such investment advisers, RIAs) and exempt reporting advisers (ERAs). FinCEN previously made similar rule proposals in both 2003 and 2015, which were never finalized.

Australia: Internal Dispute Resolution (IDR) Reporting Due for Financial Services Licensees

Feb 16 2024

By: Daniel Knight and Laura McFadzean

All Australian financial services licensees with a retail authorisation, Australian credit licensees and certain unlicensed entities and superannuation trustees (eligible entities) are required to report IDR data to ASIC by 29 February 2024 at 11:59 PM.