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Investment Banks Face Challenges Under New Municipal Advisor Rules

Lanny A. Schwartz, Scott D. Farbish and Zachary J. Zweihorn of Davis Polk & Wardwell write: Congress adopted as part of Dodd-Frank a new registration and regulatory scheme for “municipal advisors.” While the law affects virtually all providers of financial services to the municipal sector, the fiduciary duty provision poses a particular challenge for investment banking. There remain uncertainties that may require further guidance from the SEC and the MSRB.

Regulating Interconnectivity on the ‘Internet of Things’

Kelly T. Currie and Cheryl A. Falvey of Crowell & Moring write: Consumer products, embedded with sensors and the ability to communicate, challenge traditional methods of managing the risks to privacy and security presented by these innovative offerings. To succeed in this new world, consumer businesses will need to navigate turbulent and uncertain waters in consumer privacy and technology security.

Costs and Benefits of JOBS Act’s Lifting of General Advertising Ban

Edward T. Dartley and Gregory J. Nowak of Pepper Hamilton write: The SEC’s recent lifting of the solicitation prohibition has engendered tremendous discussion in the legal and business community, as private companies and funds weigh the potential benefits and costs of these new opportunities. Rule 506(c) can bring benefits to private placement issuers, along with new requirements that also become effective.

To Grow or Not to Grow

David L. Ansell and Thomas P. Vartanian of Dechert write: Banking organizations will experience ever escalating regulatory requirements and costs that may impact their life, death and profitability as they pass the $500 million, $1 billion, $10 billion, $50 billion and $250 billion consolidated asset thresholds. These costs will be imposed in a variety of ways, including through higher capital requirements, additional assessments and fees, and enhanced regulation and supervision, raising the question of whether it makes sense to grow or not.