Compliance officers may need to add "Chevron risk" to their vocabulary. The risk that all those administrative agency rules you've been operating under for years and that may be passed in the future could be subject to years long litigation, increasing legal uncertainty and creating compliance risk. From a post by Todd H Baker at the Columbia Blue Sky Blog: >>In this new world of administrative law, it could take five years or longer for regulatory actions to wend their way through the overburdened court system before they become technically final and binding. If interested parties can find or create a new plaintiff in the years after that, the “final” rule can still be challenged under Corner Post on different grounds. It doesn’t matter what the subject matter is — environmental law, securities law, internet rules, labor law, consumer protection, banking law — it’s conceivable that some administrative rules will never have the force of settled law. The rulemaking work of regulatory agencies may effectively become a Sisyphean exercise. There’s a serious practical problem with this. In many respects, knowing what the rules are is more important for successful business planning than the content of any particular rule. Businesses need to think ahead and make decisions based on reliable assessments of the likely future legal and regulatory environment in which they will compete. Strategic and operating plans need to be put into place with financial support and management incentives designed to support desired outcomes. Businesses rely on, and benefit from, predictability. Prolonged uncertainty is the worst, potentially a business killer in a fast-changing world.<< It's also a haven for compliance and enterprise risk. Link to Baker's post: https://lnkd.in/ga3mFj9z #Chevron #risk #SCOTUS #compliance #Toddsarethebest
Understanding the Impact of Regulatory Changes
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A perspective gained from decades of corporate governance and policy work: Most organizations view new laws and regulatory changes through a narrow lens of compliance. This limited focus is costing them significant market opportunities. The pattern is consistent across industries: Legal and compliance teams mobilize, resources shift to meet requirements, and the broader strategic implications get overshadowed. But the most successful companies think differently. They ask deeper questions: ↳ How will this reshape customer behavior? ↳ What shifts might happen in our supply chain? ↳ Where are the new competitive advantages? ↳ What market gaps might open up? Real example: One of my clients turned a major regulatory shift into a complete market advantage. While competitors rushed to comply, they reimagined their entire business model. The result? They didn't just meet new requirements. They emerged as the market leader. When new laws are written and passed and regulations change, entire markets reshape. The winners aren't just the most compliant – they're the most strategic. #BusinessStrategy #Leadership #Innovation #CorporateStrategy
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Interesting developments out of the IRS that will certainly impact corporate finance teams. The IRS just proposed new regulations that could reshape how companies execute tax-free spin-offs. While they provide some much-needed clarity, they also introduce new compliance burdens that could make these corporate transactions more complex and costly. Key takeaways from my perspective and points that might be important for CFOs, tax leaders, and dealmakers: • Debt-for-equity exchanges get a lifeline. The IRS reversed course on some past restrictions, allowing more flexibility for companies to use Spinco stock to pay down debt. But a new 30-day holding rule for intermediaries could complicate M&A transactions and increase costs. • Stricter rules on boot purges. The IRS is tightening restrictions on how companies can use cash proceeds in spin-offs, limiting options like stock buybacks and dividends as part of the deal structure. • Tougher scrutiny on retained spinco stock. If the parent company holds onto Spinco shares post-spin, it’s now presumed to be tax-motivated unless strict conditions are met—requiring a clear business rationale, a disposal plan, and restrictions on shared leadership or business ties. • More compliance red tape. Companies will need to submit a formal Plan of Reorganization to the IRS detailing every step of the transaction, adding significant new regulatory and tax reporting requirements. The bottom line is that the IRS is pushing for more oversight on corporate finance transactions, but these changes could make tax-free spin-offs harder to execute. While the rules aren’t final yet, they’re already shaping IRS private letter rulings and will almost certainly influence deal structuring strategies. Are these changes a step toward better transparency, or just more regulatory hurdles for businesses? #Finance #Business #CorporateFinance #MergersAndAcquisitions #Tax #TaxPolicy #TaxStrategy #IRS #Policy #CapitalMarkets #FinanceLeadership #RegulatoryCompliance https://lnkd.in/eazc9Rzv
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As companies increasingly adopt artificial intelligence tools for monitoring and evaluating employees, financial regulators — especially the Consumer Financial Protection Bureau — are intensifying their focus on compliance requirements, making it clear that these regulatory bodies have a significant impact on employers' operations and responsibilities. The CFPB recently issued warnings to employers regarding the use of AI in employee surveillance, particularly emphasizing compliance with the Fair Credit Reporting Act, or FCRA. Simultaneously, the Federal Trade Commission has taken action against AI practices that potentially infringe on consumer rights, indicating that employer surveillance may be next on the list for regulatory attention. For companies, it is essential to educate human resources and compliance staff on these evolving regulatory expectations from the CFPB, FTC and state agencies, as failing to comply could lead to substantial penalties and reputational risk. Even with a potential change in priorities with the incoming administration, state regulators appear to be primed to take up any slack in regulatory scrutiny. In addition to employee surveillance, employers must also be mindful of laws and regulations relating to use of AI in employment decisions. This article expands on these agencies' perspectives, delves into insights from the CFPB's October circular and offers practical compliance steps for companies.
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𝐄𝐒𝐆𝐢𝐧𝟑: 𝐆𝐮𝐢𝐝𝐚𝐧𝐜𝐞 𝐭𝐨 𝐞𝐧𝐡𝐚𝐧𝐜𝐞 𝐜𝐞𝐫𝐭𝐚𝐢𝐧𝐭𝐲 𝐢𝐧 𝐦𝐚𝐭𝐞𝐫𝐢𝐚𝐥 𝐬𝐮𝐬𝐭𝐚𝐢𝐧𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐝𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞 While some uncertainty may exist in the direction of climate-related disclosure regulation in the US, one certainty is that disclosure of material climate-related info 𝒊𝒔 𝒓𝒆𝒒𝒖𝒊𝒓𝒆𝒅 (reminder: 2010 SEC Interpretive Guidance on Disclosure Related to Business or Legal Developments Regarding Climate Change https://lnkd.in/eWfCErvn ) As companies navigate complex global sustainability standards & regs, while enhancing organizational resilience & market positioning amidst emerging risks, #ISSB standards can be a strategic tool to deepen understanding of sus-related risks & opps on an entity's prospects – its cash flows, access to finance, & cost of capital. The recently released ISSB materiality guidance (https://lnkd.in/eWYpb3TF) underscores the importance of disclosing financially material climate-related risks. >30 jurisdictions are moving to adopt ISSB, recognizing the importance of certainty, standardization & reliability in sustainability disclosure – which provide transparency into evolving risks & opps to business – as critical to trust & confidence in markets. This guidance can strengthen existing materiality assessment practices & serve as a risk protection tool, increasing senior mgmt & board confidence that all material risks & opps are considered in strategy, operations, & market disclosures. Investors emphasize the need for timely, decision-useful & material sustainability disclosure b/c “..orgs that effectively anticipate & manage material sustainability-related factors & other long-term strategic issues are more likely to endure, & create greater value over the long term, than those that do not.” Key themes: 📌𝐃𝐞𝐟𝐢𝐧𝐢𝐧𝐠 𝐦𝐚𝐭𝐞𝐫𝐢𝐚𝐥 𝐢𝐧𝐟𝐨: "Information is material if omitting, misstating or obscuring that information could reasonably be expected to influence decisions of primary users..." (p. 4) 💡𝐒𝐮𝐬𝐭𝐚𝐢𝐧𝐚𝐛𝐢𝐥𝐢𝐭𝐲-𝐫𝐞𝐥𝐚𝐭𝐞𝐝 𝐫𝐢𝐬𝐤𝐬 & 𝐨𝐩𝐩𝐬: "The effects on an entity’s cash flows, access to finance & cost of capital are assessed over the short, medium & long term to evaluate the potential implications of sustainability-related risks & opportunities for an entity." (p.28) 🏁𝐈𝐝𝐞𝐧𝐭𝐢𝐟𝐲𝐢𝐧𝐠 & 𝐝𝐢𝐬𝐜𝐥𝐨𝐬𝐢𝐧𝐠 𝐦𝐚𝐭𝐞𝐫𝐢𝐚𝐥 𝐢𝐧𝐟𝐨 & 𝐢𝐧𝐭𝐞𝐫𝐚𝐜𝐭𝐢𝐨𝐧 𝐰/ 𝐨𝐭𝐡𝐞𝐫 𝐬𝐭𝐝𝐬/𝐫𝐞𝐠𝐬: The guidance outlines a 4-step process for identifying & disclosing material info & acknowledges: “…local laws & regulations might specify requirements that affect what information an entity provides in its sustainability-related financial disclosures..." (p.61) The time to act is now, & the ISSB's materiality guidance provides a clear roadmap for doing so. 🔎For more info on materiality: https://lnkd.in/erRGkUPZ #deloitteesgnow
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Regulatory policy changes in non-tax area can have a material effect on a company’s tax obligations. For example- online marketplaces are moving into the wine sales business. Every state with a sales tax now has marketplace laws putting the onus on the marketplace for compliance. But most states have a division or agency exclusively devoted to regulating the sale of wine, and most state require the distributing winery to be licensed and independently compliant with any applicable taxes. Similarly, being subject to a requirement to register with a non-tax agency for regulatory compliance could be seen, in several states, as a voluntary concession that the company is subject to state income tax because it is licensed by an agency to do business in the state. You may ask, how would a state know? States, like companies, are upgrading their tech infrastructure. In many cases, the upgrades are now allowing disparate agencies’ databases to better share information with one another. I’m seeing this come up more and more on audits. When your company registers with a state agency for regulatory compliance, do you touch base beforehand with your tax department? #pinchofszal #statetax #womenintax #regulatorycompliance
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#Regulatory shifts are coming fast, and #healthcare and life sciences leaders must be ready. With new leadership at HHS, FDA, CMS, and DOJ, the new administration’s agenda already driving changes that will impact everything from drug pricing and food additives to #AI and global trade policies. Companies that fail to anticipate and adapt to these shifts risk falling behind in an industry where compliance, #innovation, and patient care are deeply intertwined. Key takeaways: • Regulatory shakeups are inevitable: Expect policy reversals, funding pullbacks, and shifting priorities in Medicaid, drug pricing, and M&A flexibility. • AI and digital health under scrutiny: Changes to AI regulation and data transparency requirements could impact how companies leverage technology for research and operations. • Global divergence will reshape strategy: With potential withdrawal from the WHO and new trade tariffs, companies must prepare for regulatory misalignment across borders. • State vs. federal friction is growing: From food labeling to Medicaid expansion, companies will need to navigate conflicting regulations at multiple levels. Regulatory change is not just coming, it is already here. Leaders who take a proactive approach to compliance, risk management, and digital transformation will not only protect their businesses but also drive better outcomes for patients. Explore everything Ashraf (Ash) Shehata, Amy Matsuo, and I are tracking. https://lnkd.in/eXGn__r8 #KPMGHCLS #KPMGLifeSciences #LifeSciences
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The regulatory compliance question that keeps finance leaders awake: "Can you prove your supply chain decisions meet evolving standards?" Regulations don't just change. They accelerate. Environmental standards tighten quarterly. Labor requirements expand continuously. Safety protocols strengthen constantly. Transparency demands increase relentlessly. Traditional compliance is reactive: Wait for new rules, then scramble to adapt. Decision Simulation Twins enable proactive compliance: They test your supply chain strategies against anticipated regulatory changes. They model the impact of stricter environmental standards before they're enacted. They evaluate supplier networks against emerging labor requirements. They stress-test transparency capabilities against future disclosure demands. When new regulations arrive, you're not scrambling to comply. You're already compliant. Because you've tested your strategies against regulatory scenarios that haven't happened yet. ↳ Finance teams can budget for compliance costs before they hit ↳ Legal teams can prepare documentation before audits arrive ↳ Operations teams can adjust processes before deadlines approach ↳ Executive teams can communicate proactive positioning to stakeholders Compliance isn't just about meeting today's standards. It's about anticipating tomorrow's expectations. ♻️ Repost to help your network. And follow Steve Litzow for more. Ready to see how a Decision Simulation Twin can help you protect margin, reduce risk, and cut costs—before disruption or the competition hits? Explore the platform trusted by Fortune 500 leaders: https://lnkd.in/g-XQXCpz
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#thursday4appraisers This is how regulatory changes are reshaping business valuation As valuation experts, we're standing at a crossroads. On one side, we have tried-and-true methodologies honed over decades. On the other, a rapidly changing regulatory environment that's rewriting the rules of our game. The choice isn't whether to adapt - it's how quickly we can do so. But before taking any step, you must know about it. So, here are three key ways regulations are impacting valuation practice: 1. 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐬 𝐚𝐫𝐞 𝐟𝐨𝐜𝐮𝐬𝐢𝐧𝐠 𝐦𝐨𝐫𝐞 𝐨𝐧 𝐫𝐢𝐬𝐤 𝐦𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭 𝐚𝐧𝐝 𝐜𝐨𝐦𝐩𝐥𝐢𝐚𝐧𝐜𝐞 Regulators increasing focus on risk management and compliance weaknesses What it means for us: We need to factor robust risk assessments into valuations. What you should be doing: ➟ Integrate regulatory risks into your valuation models. ➟ Stay updated on changing regulations. 2️. 𝐓𝐡𝐞 𝐫𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐥𝐚𝐧𝐝𝐬𝐜𝐚𝐩𝐞 𝐢𝐬 𝐠𝐞𝐭𝐭𝐢𝐧𝐠 𝐦𝐨𝐫𝐞 𝐜𝐨𝐦𝐩𝐥𝐞𝐱 Multiple regulatory bodies with potentially conflicting policies What it means for us: Assessing regulatory impacts on business value is harder. What you should be doing: ➟ Understand different regulatory frameworks and their interactions. ➟ Consider the costs of navigating complex regulations. 3️. 𝐄𝐧𝐟𝐨𝐫𝐜𝐞𝐦𝐞𝐧𝐭 𝐚𝐜𝐭𝐢𝐨𝐧𝐬 𝐚𝐫𝐞 𝐞𝐱𝐩𝐞𝐜𝐭𝐞𝐝 𝐭𝐨 𝐢𝐧𝐜𝐫𝐞𝐚𝐬𝐞 Expected increase in supervisory activities and enforcement actions What it means for us: Regulatory compliance is more important for valuations. What you should be doing: ➟ Factor potential enforcement impacts into valuations. ➟ Ensure your company's compliance is strong. The bottom line? We can't just react to new changes – we need to anticipate them. That's where staying informed and adapting our methods becomes crucial. At Syntelligence Fintech, we're not just keeping up with new changes – we're helping shape the conversation around them. Our team offers: ➟ Cutting-edge financial modeling techniques ➟ In-depth regulatory impact analyses ➟ Tools to turn regulatory challenges into your competitive edge Ready to stay ahead of the curve? Let's tackle these challenges together.
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