First 100 Days: Upcoming Regulatory Signals for M&A and Capital Formation

Modification or Withdrawal of Rulemakings and Guidance

Recission of SEC Staff Legal Bulletin No. 14L and issuance of new Staff Legal Bulletin No. 14M (CF), which eases the ability of companies to exclude shareholder proposals (e.g., climate policy, corporate governance, human capital management) from proxy materials.

SEC Legal Bulletin

Adoption of enhanced accommodations for issuers seeking nonpublic review of draft registration statements for public offerings, including:

• Expansion of eligible forms.
• Submission flexibility.
• Expansion of availability to certain de-SPAC transactions.
• Omission of underwriter name.

SEC Announcement

• Improve capital raising opportunities including through changes to Regulation Crowdfunding (e.g., changes to reduce the complexity and compliance cost of exempt offerings).
• Empower retail investment in private companies, including modifications to the definition of an accredited investor (e.g., income, net worth) and how investments are accepted (e.g., sliding scale, direct, pooled investment vehicles).
• Expand workplace retirement plan investments to include private equity investments and/or a private equity retirement plan alternative, consistent with the Employee Retirement Income Security Act (ERISA) under the Department of Labor (and potential for litigation reform) and fiduciary duty requirements.
• Enhance the feasibility of initial public offerings (IPOs), including amendments to the definition of an emerging growth company (e.g., qualification, duration) and broader application of an “on-ramp” for certain existing disclosure obligations.
• Scale public company disclosures, including updating thresholds for accelerated and large accelerated filers and identifying disclosures applicable to only the largest companies.

SEC Acting Chair Remarks

SEC Commissioner Remarks

2024 OASB Annual Report

Implementation of Executive Order 14219, which directs agencies to “initiate a process to review all regulations” and identify regulations that, among other things, “impose undue burdens on small businesses and impede private enterprise and entrepreneurship.”

Launch of the Anticompetitive Regulations Task Force “to advocate for the elimination of anticompetitive state and federal laws and regulations that undermine free market competition and harm consumers, workers, and businesses”; solicitation of public comment on “unnecessary” laws and regulations that raise the highest barriers to competition. 

EO 14219

DOJ Announcement, Request for Comment

Modification or Withdrawal of Rulemakings and Guidance

Implementation of Executive Order 14219 on the Administration’s deregulation initiative.

Establishment of the Anticompetitive Regulations Task Force (included in Capital Formation as well) to:

• Review regulations across industries for competitiveness.
• Focus on identifying and addressing state and federal laws and regulations that affect market competition.
• Assist agencies with revision or elimination of anticompetitive regulations.
• Advocate for removing anticompetitive laws and regulations.

EO 14219

DOJ Statement

Focus on National Security

Potential for sanctions and/or bans (e.g., China Russia) inclusive of sector-specific and tech-related actions. Areas of interest may include IP rights, connected products, and investments in national security technologies in other countries (e.g., DOJ final rule on Prohibitions and Restrictions on Access to Bulk U.S. Sensitive Personal Data).

White House Memorandum

DOJ Final Rule

Potential for investigation into the U.S. operations of companies aligned with countries posing national security concerns (e.g., telecommunications). Efforts may include:

• Enhancing oversight of foreign-owned entities operating in the United States.
• Issuing Letters of Inquiry and subpoenas.
• Gathering detailed information on foreign entities' operations.
• Coordinating with other federal agencies to address uncovered risks.

FCC Chair Statement

Heightened focus on investment in specific industries to secure American independence and innovation (e.g., energy, AI), including potential for changes in regulations to promote innovation and sector development.

EO 14156 (re: Energy)

EO 14179 (re: AI)

Narrowed application of the beneficial ownership information reporting requirements under the Corporate Transparency Act (CTA) to include only entities previously defined as “foreign reporting companies.”

FinCEN Interim Final Rule

Congressional Letter

Continuation of 2023 Merger Guidelines

Retention of FTC/DOJ 2023 Merger Guidelines; continued focus on anti-monopoly/anti-competitive transactions and/or conduct and protection of workers (i.e., labor markets); transaction reviews to include “factors and frameworks” when assessing compliance with U.S. antitrust laws (e.g., series of acquisition, trends toward consolidation).

The agencies “prize stability and disfavor wholesale recission”; they state that stability is good for business planning and enforcement.

FTC Chair Memo

DOJ Antitrust Division Memo

2023 Merger Guidelines

Rules covering premerger notification, reporting, and waiting requirements under the Hart-Scott-Rodino Antitrust Improvement Act (HSR) were allowed to go into effect (and were not held back under the regulatory freeze executive action – see also “Congressional Activity” below).

FTC Final Rule

Industry-Specific Action/Flexibility

Expressed willingness to adopt a more “nimble and predictable” approach to de novo bank formations and M&A (e.g., banking).

Encouragement for more de novo activity to create a pipeline of new entrants.

Need for improvement in the merger approval process to ensure timely response.

FRB Governor

FDIC Acting Chair Statement

Approval of new charter/ business model (e.g., OCC approval of fintech acquisition of a national bank).

OCC Announcement

Imposition of “passivity agreements” for certain large investors.

FDIC Director Statement

Congressional Activity

Introduction of bills to “disapprove” prior rules (under the Congressional Review Act), including the:

• FTC’s premerger notification rule
• OCC’s final rule on business combinations under the Bank Merger Act

Note: Bills require both House and Senate to approve the same bill and the President to sign.

H.J.Res. 39

S.J.Res. 13

Modification or Withdrawal of Rulemaking and Guidance

Proposed rescission of FDIC 2024 Statement of Policy of Bank Merger Transactions (to address concerns regarding uncertainties) and reinstate its previous Statement of Policy in anticipation of a future proposal to “comprehensively revise” its merger policy.

FDIC Proposal

Updated guidance on interpretation of “active investor” and Regulation 13D-G beneficial ownership reporting requirements related to proxy voting.

SEC Staff Guidance