Treasury Proposes Expanding Outbound Investment Security Program
A Treasury NPRM issued October 22, 2026 would implement Subtitle C of the COINS Act, extending the outbound investment national security program that constrains covered U.S. investors' dealings with foreign persons.
Treasury issued a Notice of Proposed Rulemaking on October 22, 2026 that would implement Subtitle C of the Comprehensive Outbound Investment National Security (COINS) Act, according to a Sheppard Mullin client alert published November 3. The proposal would extend the existing outbound investment security program, under which covered U.S. persons must notify or prohibit certain securities and investment transactions with foreign persons engaged in covered activities linked to national security concerns. The alert does not identify the specific covered technologies, activity definitions, transaction types, or compliance mechanics Treasury proposes to add, so the operative scope should be treated as unconfirmed until the Federal Register text is reviewed.
Why sophisticated counsel should care: outbound investment rules are a structural constraint on cross-border deal flow, not a filing formality. Private equity and venture funds must screen target companies, counterparties, and investors for covered-person exposure before signing; LP diligence questionnaires, allocation policies, and post-closing compliance covenants may all need revision if Treasury broadens covered sectors or notification thresholds.
Next to watch: the comment period and any resulting final rule, Treasury guidance on treatment of pending and contemplated transactions, and client reviews of cross-border investment pipelines that could be captured by the proposed expansion.