DROPLETS

According to a brief Morgan Lewis summary, the US Department of the Treasury has released a notice of proposed rulemaking that would expand the outbound investment restrictions administered under the COINS Act, updating existing regulations in what the firm describes as several significant ways. The summary does not identify which countries, technology sectors, transaction types, or compliance mechanics the proposal would change, and it does not separate what the cited statute already requires from what the proposal would add. Those details must be read in the NPRM text rather than inferred from the alert.

The development matters because outbound investment screening has become a gating item for fund formation, LP diligence, and cross-border deal structuring. If the proposal broadens covered technologies, extends to additional jurisdictions, or tightens notification, reporting, and recordkeeping obligations, clients would need to revisit internal investment-approval workflows, side letters, and closing conditions well ahead of any final rule.

…

Mayer Brown reports that the U.S. Treasury has released a proposed rule to implement the COINS Act, broadening existing outbound investment restrictions in two notable ways: adding biotechnology to the covered sectors and prohibiting investments in "super intelligence." For clients in venture capital, corporate development, and strategic investing, the practical effect is to expand the universe of transactions requiring screening before closing and to push compliance work earlier in the deal timeline, since covered investments would generally need to be identified and structured at term-sheet stage rather than at notice or closing. Biotechnology and frontier AI investors should revisit investor and diligence questionnaires, joint venture and minority-stake structures, and board-level risk protocols given an anticipated widening of covered technology categories. Corporate development teams should reassess pending and contemplated transactions with non-U.S. co-investors and offshore holding structures. Counsel should watch the comment process and the final rule's definitions of covered

…

FINRA has approved an exception that, as described in the source, opens the door to including projected performance and targeted returns in private fund marketing for eligible investors, extending what placement agents and broker-dealers may communicate under FINRA's communications framework. Historically, the prohibition on projected performance generally kept projections out of private fund pitchbooks and placement agent decks, a constraint many private equity and private credit managers treated as a hard limit.

Why sophisticated counsel care: the change sits at the intersection of marketing claims, substantiation obligations, and the distinct duties of advisers, general partners, and the placement agents and broker-dealers they engage. A projection is only as defensible as the assumptions behind it, and the exception's conditions - including which investors qualify and what performance must accompany - determine whether a given deck can be shown to a given audience.

…

On October 22, 2026, DOJ announced a Central District of California health care fraud takedown charging 15 defendants over nearly $2 billion in allegedly fraudulent claims to government and private payors. Two cases — United States v. Young (No. 2:26-cr-00670) and United States v. Maldinich (No. 8:26-cr-00121) — charge five defendants with violating the Eliminating Kickbacks in Recovery Act (EKRA) over $1.6 billion billed to private insurers, which DOJ calls the largest sober home fraud scheme it has ever prosecuted. Allegations include recruiters paid in cash, flights, hotel stays, cars, gift cards and controlled substances; higher-reimbursement patients given more luxurious accommodations; and patients sometimes hired as employees to disguise kickbacks as salaries. Separate cases cover allegedly unnecessary arterial procedures, hospice fraud involving non-terminally ill patients, and fraudulent Medi-Cal prescriptions.

…

Per Vinson & Elkins' 28 October 2026 client alert, the UK Budget contains a dense package for the power sector beneath its headline consumer measures (£2.6bn Household Energy Payment; VAT cut on electricity extended to July 2027). For data centre developers, generators and their investors, the material items are a new Data Centre Covenant requiring "strategic" projects to meet five tests (lower bills, local community investment, environmental standards, jobs, security) in exchange for accelerated connections under Planning and Infrastructure Act powers, a new Ministerial Control Centre, and — only exceptionally — temporary on-site generation. The Electricity Generator Levy, already raised from 45% to 55% on 1 July 2026, is extended beyond 31 March 2028 for the lifetime of the longest wholesale CfD, though new-investment and CfD exemptions remain; its future design consults in 2027. Carbon Price Support is removed from April 2028, a wholesale CfD consultation is open, and onshore transmission competition is promised "shortly". For sponsors, HMRC's Advance Tax Certainty Service thresho

…

The 2026 UK Budget introduces a suite of tax reforms with broad industry impact. The most immediately striking change is the temporary doubling of the Bank Corporate Tax Surcharge from 3% to 6% (Jan 2027‑Mar 2028), up‑front costs that banks and their borrowers should model. Concurrently, the government expands founder‑focused relief by offering a 10% rate on up to £10 million of lifetime gains, while halving the lifetime limit for Business Asset Disposal Relief. The foreign permanent establishment exemption becomes mandatory, constraining how foreign‑branch losses are treated. Additional shifts include new savings and property income tax rates, a Securities Transfer Tax replacing stamp duty (late 2027), and a tightened reverse‑charge rule on cross‑border services (April 2027). Treasury also lowers the Advance Tax Certainty Service minimum exposure to £300 million, broadening eligibility for large infrastructure and industrial projects. Firms need to reassess tax planning, adopt revised loss‑carry‑forward models, and advise clients on employment‑vote adjustments for non‑compete clause

…

On October 22, 2026, the U.S. Treasury issued a Notice of Proposed Rulemaking to implement the Comprehensive Outbound Investment National Security (COINS) Act, expanding the federal outbound investment framework. Because the measure is a draft open for public comment, the eventual scope — which covered technologies, sectors, covered persons, and transaction types trigger notification or prohibition, and what carve-outs apply — may shift before a final rule issues; the reporting available here does not detail the specific additions.

Counsel should care for a procedural reason: outbound investment rules operate at the diligence and closing stages, so an investment a business has already agreed to can require notice, face prohibition, or need restructuring after announcement. Multi-jurisdictional acquirers, private equity sponsors, and crossover funds with exposure to countries of concern may wish to refresh counterparty and U.S.-person screening, test portfolio concentration against new thresholds, and revisit disclosure to boards, lenders, and co-investors pending the final text.

…

On October 20, 2026, the Institutional Limited Partners Association (ILPA) released its most detailed statement yet on GP‑led continuation vehicle (CV) transactions, titled “Continuation Vehicles: Advancing Alignment through Best Practices.” The guidance outlines recommended procedures for structuring, documenting, and approving continuation deals, addresses fee arrangements and LP‑GP alignment issues, and proposes best‑practice timelines and governance mechanisms. Private‑equity sponsors find this useful for ensuring smooth transitions of existing portfolios while maintaining LP confidence and mitigating conflicts of interest. Institutional investors can use the guidance to benchmark their own consent processes, evaluate proposed continuation terms, and assess the transparency of fee structures. Counsel advising GPs should review the document to update internal CV policies, share the framework with LP counsel, and ensure compliance with the new best‑practice framework. Clients should monitor for potential regulatory or SEC scrutiny of continuation arrangements and track any subseque

…

On October 22, 2026, the U.S. Treasury issued a notice of proposed rulemaking, with a press release and fact sheet/FAQs, proposing updates to the Outbound Investment Security Program (OISP), the U.S. national-security regime restricting certain U.S.-origin investments into foreign countries of concern. The reporting describes the proposal as a sweeping expansion, with life sciences, biotechnology, artificial intelligence and other technology sectors in focus; the precise revised transaction thresholds, covered-investor definitions, and effective mechanics were not set out in the material reviewed. Why it matters: it broadens the gatekeeping footprint for corporate venture and growth investment, joint development and licensing arrangements, and non-U.S. investor participation in targeted sectors — a cross-client issue for multinationals and their funds rather than a single-sector one. Near-term action: map existing cross-border capital and technology flows against the proposed scope and prepare comments on sectoral definitions and covered transaction parameters before the comment peri

…

On October 14, Manhattan District Attorney Alvin Bragg announced the creation of the Office's first Corporate Crime and Antitrust Task Force, led by veteran prosecutor Matthew Bogdanos and staffed with roughly five assistant district attorneys and two investigative analysts, drawing on the Office's investigators, forensic accountants and Financial Intelligence Unit. The unit targets corporate and executive misconduct, including antitrust violations, healthcare fraud and consumer fraud, and is framed around pursuing "high-level actors" and "structures that enable and profit from crime."

…

Anthropic, the maker of Claude, has released a draft federal bill aimed at setting a safety and security framework for powerful AI systems. While detailed language is not publicly available, reports suggest the proposal would require extensive testing, transparency reporting, and regulatory oversight to prevent harms from frontier models. The initiative comes amid rising concerns over algorithmic bias, misuse, and unchecked deployment of generative AI. For law firms advising clients who deploy AI in finance, healthcare, or other regulated industries, the bill could impose new compliance obligations, insurance requirements, and litigation exposure. Clients should watch congressional progress, assess their own AI use against anticipated standards, and prepare to work with regulators if the bill moves forward. Until the draft is officially introduced or debated, the exact scope remains uncertain, but the proposal signals intent to impose federal oversight on AI innovation.

On 14 October 2026 the European Commission published EN 18286:2026, "Artificial intelligence - Quality management system", as the first harmonised technical standard under the EU AI Act, via Commission Implementing Decision (EU) 2026/2274. Harmonised standards are the practical route by which providers of high-risk AI systems evidence that their quality management system, conformity assessment, post-market monitoring and risk-management practices satisfy the AI Act's obligations; endorsement through an implementing decision generally confers a presumption of conformity with the harmonised legislation.

…

On October 21, 2026, the Office of the Comptroller of the Currency issued a final rule implementing the GENIUS Act for payment stablecoin issuers subject to OCC supervision. The source, a law-firm client alert, states that the final rule eases several key proposed requirements and introduces new issues, but the excerpt does not enumerate the specific provisions changed, so its effect on reserve, redemption, disclosure, or supervisory expectations cannot be described with confidence from this material alone.

…

The District of Columbia’s Department of Energy and Environment (DOEE) is closing the first compliance cycle of its Building Energy Performance Standards (BEPS) on December 31, 2026. Roughly 900 privately owned buildings with more than 50,000 square feet were required to self‑report energy performance data to meet the standards. The final deadline triggers enforcement avenues, but the agency has signaled that limited‑use exemptions and discretionary extensions may be possible for buildings that cannot fully comply by year‑end. Firms advising real‑estate owners should inventory their portfolios, verify that all energy‑management and reporting systems are calibrated, and confirm that they can submit the required audit reports. Addressing gaps early can mitigate penalties and help clients qualify for any available exemptions. The key next step is to conduct a rapid compliance audit, prepare requisite documentation, and engage with counsel to explore extension options before the December 31 deadline.

The U.S. Senate’s failure to advance the Digital Asset Market Clarity Act (CLARITY) by a single vote has forced the incoming regulation out of Congress and into the federal agencies that already oversee securities and commodities. Consequently, the SEC and CFTC are now tasked with filling the regulatory gap, likely through a joint guidance program that will outline registration, reporting and enforcement standards for crypto‑assets and related derivatives. For counsel, this shift means clients may need to prepare for agency rules rather than a single statutory framework, potentially delaying product launches and affecting cross‑border transactions. Firms should monitor the agencies’ initial guidance proposals, estimate the scope of reporting obligations, and counsel clients on interim compliance strategies. Uncertainty remains about the timing, scope, and legal authority the agencies will invoke, making it essential to keep an eye on forthcoming notices and proposed rules that will shape the digital‑asset regulatory landscape over the next 12‑18 months.

On October 22, 2026, Oregon OSHA finalized OAR 437‑002‑0150, a workplace violence prevention rule that extends coverage beyond hospitals and ambulatory surgical centers to home health agencies and home hospice programs. The rule redefines workplace violence to include threats, harassment and intimidation, not just physical assaults, and requires covered employers to create a written prevention plan, conduct regular training, execute investigative and reporting procedures, and maintain an incident log. Compliance also triggers updates to existing Discrimination Complaint and Recordkeeping rules, allowing employees to file discrimination complaints if they report violence. Although the rule is Oregon‑specific, it sets a potentially influential precedent for other states and may prompt healthcare employers nationwide to audit their own policies. Firms should advise clients on potential gaps, update risk assessments, and develop or modify prevention plans to align with the new scope. The updated rule comes into effect January 1, 2027; businesses will need to ensure timely implementation

…

On October 20, 2026, the U.S. Department of Justice’s National Fraud Enforcement Division (NFED) announced a pilot Whistleblower Incentive Program (WHIP), earmarking $25 million from the Treasury to reward individuals who bring credible fraud allegations against private companies. The initiative, modeled after the Federal Trade Commission’s whistleblower rule, will provide expedited processing, confidentiality safeguards, and monetary awards ranging from $25,000 to $1 million, depending on the severity and impact of the fraud disclosed. The program is still in the early trial phase, and its precise criteria, award thresholds, and adjudication timelines are subject to refinement. Firms with sizable fraud and compliance divisions should review their internal escalation and reporting policies; an updated whistleblower hotline might be advisable, and counsel should advise clients on aligning incentive structures with federal obligations. Ultimately, the WHIP could shift how firms detect fraud internally and respond to whistleblower claims, potentially reducing liability exposure and enco

…

Victoria's Sustainable Data Centre Action Plan, released September 2026, sets the state's framework for assessing data centre proposals. It creates a new "data centre" land use definition for Victorian planning schemes, bars facilities on residentially zoned land and in rural zones absent adjacent critical infrastructure, imposes a 150-metre buffer from homes and a statewide 55 A-weighted dB night-time noise limit (with a penalty for cooling tonal hum), and extends mandatory referral to WorkSafe Victoria, Fire Rescue Victoria, VicGrid and the relevant water corporation. Proponents are expected to offset operational electricity via new renewable generation and storage, cover connection costs, and use recycled or non-potable water for cooling or fund replacement of drinking water used, plus meet local jobs and training commitments. A Minister for Planning statement of expectations dated 5 October 2026 adds quantifiable limits for permits lodged on or after 23 September 2026.

…

The Treasury’s Notice of Proposed Rulemaking (NPRM), issued on Oct. 22, 2026, implements the Comprehensive Outbound Investment National Security Act of 2025 (COINS Act) by adding biotechnology to its list of sectors subject to national-security investment review. Under the proposed rule, any U.S. investment or joint venture involving a Chinese biotech company would trigger CFIUS-style scrutiny, requiring prior notice and potentially leading to revocation of the investment or blocking the joint venture altogether. For large law firms advising multinational biotechs or investors, the rule represents a significant shift: it expands existing CFIUS regulations, raises the approval threshold for deals involving foreign entities of concern, and introduces new compliance costs and reporting obligations. Firms should be ready to counsel clients on performing expedited CFIUS assessments, incorporating new safeguards into M&A documentation, and monitoring changes to the Treasury’s guidance. The Treasury has indicated a 60-day post‑notice comment period, after which the agency will refine the ru

…

HHS’ interim enforcement discretion policy lifts the possibility of enforcement action against state‑licensed pharmacies, federal facilities, and licensed physicians that compound drug products containing six designated peptide bulk substances—BPC‑157, Epitalon, KPV, MOTS‑c, Semax and TB‑500—while the FDA completes rulemaking on the 503A list. The policy establishes strict compounding requirements: the peptide must be a listed bulk substance manufactured by an FDA‑registered, CGMP‑compliant facility with a valid certificate of analysis; the product must be compounded under a patient‑specific prescription, contain a single active ingredient, be labeled “This is a compounded drug product. Not for resale,” and, for oral formulations, be supported by adequate bioavailability documentation. All compounding must satisfy 503A sanitary conditions, involve FDA‑cleared syringes for delivery devices, and include serious adverse event and quality issue reporting to MedWatch and relevant state authorities. The policy is interim and may be revised or withdrawn if safety signals surface, prompting

…

FERC’s draft policy statement proposes sweeping changes to how it applies the National Environmental Policy Act (NEPA) to natural‑gas projects with operating‑air‑quality implications. Under the proposed rule, the agency would remove the current rule that obliges owners and operators to perform air‑quality adequacy studies whenever a facility’s operations could affect air quality. Instead, FERC would rely exclusively on the agency’s existing environmental‑review framework and privately‑prepared environmental‑impact statements (EIS) to cover any operational‑air‑quality concerns. The intent, as explained by FERC staff, is to reduce duplicative studies, lower costs for pipeline, LNG, and other gas infrastructure developers, and streamline the approval process without compromising environmental safeguards. If finalized, the rule would alter the baseline for NEPA compliance, requiring counsel and clients to update internal compliance workflows. Stakeholders—including gas utilities, pipeline operators, and permitting counsel—will want to monitor subsequent comment periods and guidance on ho

…

The DHS directive, released late October 2026, bars federal civilian agencies from purchasing AI models or services from DeepSeek without explicit security clearance. Reportedly motivated by worries over potential data leaks and foreign-state access, the restrictions require agencies to seek DHS approval before any procurement, including cloud based or on‑premise deployments. Firms that supply or license DeepSeek’s generative‑AI platform must update contracts and compliance protocols to reflect the new oversight requirements. Counsel advising government entities will need to review existing AI vendor agreements and advise clients on alternative suppliers. Meanwhile, DeepSeek and its partners should evaluate whether to comply with DHS requests or pursue exemptions, and assess impacts on their U.S. sales pipeline. The rule’s enforcement date is set for early 2027, making swift coordination essential for affected agencies and vendors.

On September 30, 2026, the Securities and Exchange Commission issued a coordinated package of proposals designed to "expand responsible retailization of private markets." The syndicated client alert available to us confirms the release date and the Commission's stated objective, but does not reproduce the text of the individual proposed amendments, so the specific rule changes, comment deadlines and any related proposals should be confirmed against the SEC's own releases rather than this summary.

…

The City of New York has adopted a refreshed set of regulations that tighten the scope and use of criminal background checks under the Fair Chance Act. New provisions clarify which offenses can be considered, impose stricter thresholds for including criminal history on job applications, and require employers to provide more substantive reasons for refusing a candidate on the basis of criminal records. The changes also mandate periodic reviews of existing background‑check databases and more rigorous data‑protection protocols. Employers who are subject to the Act—essentially all businesses with five or more employees in New York—must update their hiring processes, revise any automated screening tools, and ensure that their policies are reflected in employee handbooks before the October 30 cut‑off. Firms advising client portfolios that include retailers, healthcare providers, and other frontline sectors should review current compliance procedures and advise on remedial steps if needed. This rule shift carries cross‑client implications and may prompt audits and policy overhauls across th

…

On October 22, 2026 the U.S. Department of the Treasury released a proposed rule to implement the outbound investment provisions of the Comprehensive Outbound Investment National Security (COINS) Act. The proposal expands restrictions beyond publicly traded securities to include private company investments, real estate, and other tangible assets that could be acquired by foreign entities. The Treasury’s draft broadens the trigger for national‑security reviews, requiring companies to apply for a license or, in some cases, to block or divest an investment entirely. Clients with recent or planned outbound investment activities will need to assess whether their holdings fall within the new rules, file comments where appropriate, and prepare for tighter scrutiny in future participation. The comment period closes on December 7, 2026, after which the Treasury may issue a final rule that could significantly alter the risk landscape for U.S. firms investing abroad.

California’s Assembly Bill 1198 amends prevailing‑wage rules for public‑works projects costing more than $2 million. From July 1 2027 the law replaces the overtime‑adjusted wage table with a time‑based schedule that allows a one‑to‑four‑year “change‑time” period. Contractors who calculate wages under the old schedule may find those rates no longer apply once a bid is accepted, exposing them to cost overruns or bid‑challenge litigation. The bill introduces a floating‑wage option that re‑evaluates rates based on a performance‑metric index if a contract extends beyond the initial period. Firms must update bid models, adjust reserve plans, and consider contingency clauses to manage wage‑adjustment risk. Clients should review pending contracts, file CLE updates, and monitor potential enforcement actions from the Contractors State License Board.

The Department of the Treasury’s Notice of Proposed Rulemaking, released on Oct. 22, 2026, expands the scope of the Comprehensive Outbound Investment National Security Act (COINS Act) to more aggressively scrutinize U.S. entities investing in China. Under the proposal, additional investment categories—including technology, critical infrastructure, and certain joint ventures—would trigger enhanced disclosure, licensing, and post‑investment monitoring requirements. Practices that routinely engage in foreign investment or cross‑border M&A may need to reassess due‑diligence protocols, evaluate existing holdings, and determine whether any investments could trigger the new thresholds. The Treasury has opened a 60‑day comment period, giving firms an early window to shape final rules before potential enforcement dates in late 2027 or 2028. Counsel should review client portfolios for exposure, advise clients on possible compliance steps such as filing for special licenses, and consider divestment or restructuring strategies if investments cannot meet the expected security review criteria. The

…

California has passed a trio of AI civil‑disclosure statutes that represent the most aggressive regulatory push yet for AI communication. The "California AI Spokesperson Act" makes it a civil or criminal offense for any public-facing entity—corporate, non‑profit, or individual—to use an AI system to produce spoken comments or written text without clearly labeling its origin as AI. The "AI Chatbot Disclosure and Conduct Regulations" require businesses and apps that host chatbots to provide users with a conspicuous, understandable disclosure that the chatbot is AI‑driven, how it processes data, and how users can opt‑out. The newly effective "AI Content Disclosure Act," which took effect immediately, imposes similar requirements on any AI‑generated textual or audiovisual content, mandating that the creator or publisher disclose the AI involvement.

…

In a landmark decision, the U.S. Food and Drug Administration finalized its guidance, “Regulatory Considerations for Prescription Drug Use-Related Software (PDURS),” clarifying that software distributed by or on behalf of prescription drug sponsors falls under the agency’s drug labeling authority. The guidance, after a multi‑year delay, requires sponsors to treat software as part of the drug’s labeling, affecting design, claims, and post‑market monitoring. For law firms advising pharmaceutical and biotechnology clients, the ruling signals a shift in how software‑dependent therapies are regulated: product developers must now incorporate software considerations into INDs, NDA submissions, and labeling updates, and ensure risk‑management plans address software functionality. Compliance teams should review existing contracts with software vendors, update IP assignments, and audit labeling for potential software‑related liability. Firms should also advise clients on potential changes to post‑marketing study designs and reporting obligations. The guidance is likely to affect product develo

…