Articles + Publications - Troutman Pepper Locke

Our team published new content and podcasts to the Consumer Financial Services Law Monitor throughout the month of November. To catch up on posts and podcasts you may have missed, click on the links below:

Introduction

California enacted several new employment laws in 2025, including enhanced penalties for wage and hour violations, expanded pay data reporting requirements, broadened sexual harassment protections, stronger pay equity and transparency measures, measures addressing tip theft, restriction of employee loan repayment, expanded time off and use of sick pay benefits, additional personnel records requirements, and expanded whistleblower protections. These new laws take effect January 1, 2026, unless otherwise noted below. Please note that the following updates generally apply only to employers with California employees.

Wage and Hour Changes

Senate Bill 464 – Employer Pay Data

Under California Government Code Section 12999, private employers with 100 or more employees must submit annual pay data reports to the Civil Rights Department (CRD). Senate Bill 464 revises this section to require employers to collect and store all demographic information gathered for the purpose of submitting the pay data report separately from employees’ personnel records. Beginning January 1, 2027, the bill increases the number of job categories that employers must report from 10 to 23. Lastly, if requested by the CRD beginning January 1, 2027, courts must impose a civil penalty for an employer’s failure to file this pay data report. Under Government Section 12999(a), the deadline for filing pay data reports with CRD is the second Wednesday of May each year.

Senate Bill 642 – Payment of Wages

The newly enacted Pay Equity Enforcement Act takes effect January 1, 2026, and makes the following changes to California’s Equal Pay and Pay Transparency laws:

Redefines “pay scale” as “a good faith estimate of the salary or hourly range that the employer reasonably expects to pay for the position upon hire.” As a result, employers must now provide prospective employees with a reasonable estimate of the salary they expect to pay upon hiring.
Redefines “wages” and “wage rates” to mean “all forms of pay, including, but not limited to, salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits.”
Extends the statute of limitations for pay equity claims under the California Equal Pay Act from two years after the cause of action occurs to three years after the “last date the cause of action occurs.” The bill explains that a cause of action occurs either when an unlawful compensation decision or practice is adopted, an individual becomes subject to the decision or practice, or an individual is affected by the application of the decision or practice. The bill permits recovery for a period of up to six years.
Prohibits employers from paying employees at rates less than that of employees of another sex, as opposed to the opposite sex, to make the language more inclusive of individuals who identify as outside the gender binary. These Equal Pay and Pay Transparency laws apply to nonbinary individuals.

Senate Bill 648 – Tip Theft

Senate Bill 648 amends California Labor Code Section 351 to permit the Labor Commissioner to investigate and issue citations or file civil actions for gratuities taken or withheld by employers. Prior to this change, the only course of action for employees alleging tip theft was a civil action, but after January 1, 2026, employers may face liability through Labor Commissioner citations or civil actions. Employers with employees who earn tips should review their policies and practices to ensure compliance with the amended law by confirming that all gratuities are properly distributed to employees.

Assembly Bill 692 – Employment Contract Repayment Prohibition

Assembly Bill 692 makes it unlawful for employers to enter into contracts on or after January 1, 2026, that require a worker to pay an employer for a debt if the worker’s employment or relationship terminates. Common arrangements that may now violate this new law include retention bonuses and agreements that penalize employees for separating from their employer before satisfying a certain retention period, such as requiring repayment of training fees or other costs.

Contracts that restrain a person from engaging in a lawful profession, trade, or business will generally be declared void and contrary to public policy, except for the following agreements:

Contracts entered into under a loan repayment assistance program or loan forgiveness program provided by a federal, state, or local government agency.
Contracts related to repayment of tuition for a transferable credential where the contract:

Is offered separately from any employment contract;
Does not require obtaining the transferable credential as a condition of employment;
Specifies the repayment amount before the worker agrees to the contract, and the repayment amount does not exceed the employer’s cost for the transferable credential received by the worker;
Provides for a prorated repayment amount during any required employment period that is proportional to the total repayment amount and length of the required employment period and does not require an accelerated payment schedule upon the worker’s separation from the employment; and
Does not require repayment to the employer by the worker if the worker is terminated, except if the worker is terminated for misconduct.

Contracts related to enrollment in an apprenticeship program approved by the Division of Apprenticeship Standards.
Contracts for the receipt of a discretionary or unearned monetary payment at the outset of employment that is not tied to specific job performance where the following is true:

The terms of any repayment obligation are laid out in an agreement separate from the primary employment contract;
The employee is notified of their right to consult an attorney regarding the agreement and provided with a reasonable time period of at least five business days to obtain advice of counsel prior to executing the agreement;
Any repayment obligation for early separation from employment is not subject to interest accrual and is prorated based on the remaining term of any retention period, which may not exceed two years from the receipt of payment;
The worker has an option to defer receipt of the payment to the end of a fully served retention period without any obligation to repay; and
Separation from employment prior to the retention period was at the sole election of the employee, or at the election of the employer for misconduct.

Contracts related to the lease, financing, or purchase of residential property, including but not limited to a contract pursuant to the California Residential Mortgage Lending Act.

The bill also authorizes a private right of action and specifies that violators will be liable for the greater of the worker’s actual damages or up to $5,000 in penalties per worker, injunctive relief, and attorneys’ fees and costs.

Because the law is not retroactive, employers need not revise or revoke existing agreements. However, employers should assess and revise employment contracts entered on or after January 1, 2026, to ensure they adhere to the new requirements and mitigate risks of liability.

Senate Bill 617 – Expansions to the California WARN Act

Senate Bill 617 requires employers to include additional information in their 60-day advance WARN notices, including whether they plan to coordinate services for affected employees through the local workforce development board, another entity, or no entity. The WARN notices must now include the employer’s email and phone number and an email and phone number of the relevant local workforce development board, and the following description of the rapid response activities offered by the local development board:

“Local Workforce Development Boards and their partners help laid off workers find new jobs. Visit an America’s Job Center of California location near you. You can get help with your resume, practice interviewing, search for jobs, and more. You can also learn about training programs to help start a new career.”

If an employer chooses to coordinate services, the service must be arranged to start within 30 days of the notice. Lastly, the notice must now include a description of CalFresh, including the benefits help line and website link.

Anti-Discrimination and Harassment Changes

Assembly Bill 250 – Extended Statute of Limitations for Sexual Assault and Harassment Claims

Assembly Bill 250 creates a two-year period until December 31, 2027, for reviving claims against nonpublic entities that engaged in a cover-up or attempted to cover up a previous instance or allegation of sexual assault by an alleged perpetrator, which would otherwise be barred due to an expired statute of limitations. This bill takes effect January 1, 2026. This new law means that previously time-barred claims for sexual harassment or assault may now be filed during the two-year period from January 1, 2026, through December 31, 2027.

Senate Bill 294 – Workplace Know Your Rights Act

Senate Bill 294 establishes the “Workplace Know Your Rights Act,” which requires an employer, on or before February 1, 2026, to provide a stand-alone written notice to each current employee of specified workers’ rights and to provide the written notice to each new employee upon hire and annually to an employee’s authorized representative. The California labor commissioner has now provided a template notice in English and Spanish.

The bill also creates the following obligations:

If an employee has a designated emergency contact for this purpose, the employer must notify the designated emergency contact if the employee is arrested or detained on the worksite. If the arrest or detention occurs during work hours or during offsite performance of the employee’s job duties and the employer has actual knowledge of the employee’s arrest or detention, the employer must notify the designated emergency contact.
Employers must provide an opportunity for employees to name an emergency contact on or before March 30, 2026, for an existing employee, and at the time of hiring for an employee hired after March 30, 2026. Employers must also allow the employee to provide updated emergency contact information throughout employment.
An employer may not discharge, threaten to discharge, demote, suspend, or discriminate or retaliate against an employee for exercising their rights under this bill. The Labor Commissioner will enforce the bill or authorize enforcement by a public prosecutor.
Lastly, an employer who violates the bill is subject to a penalty of up to $500 per employee per violation. However, penalties relating to emergency contacts are up to $500 per employee per each day of violation, up to a maximum of $10,000 per employee.

Employers should prepare a compliant notice and monitor the Labor Commissioner website for the template notice and ensure that this form is added to their onboarding paperwork.

Senate Bill 303 – Bias Mitigation Training

Effective January 1, 2026, Senate Bill 303 amends the Fair Employment and Housing Act (FEHA) by providing that an employee’s assessment, testing, admission, or acknowledgment of their personal bias made in good faith and solicited or required as part of a bias mitigation training does not alone constitute unlawful discrimination under FEHA.

This law is intended to encourage (but not require) employers to conduct bias mitigation trainings and affirm that conducting a bias mitigation training does not alone constitute unlawful discrimination. An employer may be interested in introducing bias mitigation training for the purpose of educating employees on understanding or recognizing the influence of conscious and unconscious thought processes and their associated impacts on certain groups.

Assembly Bill 406 – Job-Protected, Paid Sick Leave Now Available for Jury Duty and Victims of Violence

Last year, California law expanded typical Domestic Violence Leave to include victims of qualifying acts of violence.

Effective January 1, 2026, Assembly Bill 406 further expands the leave to permit employees to use paid sick leave for jury duty leave, for appearing in court under a witness under subpoena, and for employees who are victims of certain crime to attend judicial proceedings to obtain relief related to the crime. A “victim” is a (1) victim of stalking, domestic violence, or sexual assault; (2) victim of a crime that caused physical injury or that caused mental injury and a threat of physical injury; or (3) a person whose immediate family member is deceased as the direct result of a crime. Employers must provide reasonable accommodations for a victim of domestic violence, sexual assault, or stalking, who requests an accommodation for safety while at work. Of course, this provision supplements but does not replace the full range of qualifying uses under California’s paid sick leave statute (Labor Code Section 246.5) and the job-protected leave provisions of Government Code Section 12945.8, which remain available).

While employees must provide reasonable notice when taking leave to serve on a jury, if advance notice is not feasible, employers cannot take action against employees who provide documentation within a reasonable time after the absence.

Employers with 25 or more employees may not discharge, discriminate, or retaliate against employees who are victims and take time to (1) seek medical attention for injuries caused by crime or abuse; (2) obtain services from a domestic violence shelter, program, rape crisis center, or victim services organization or agency as a result of the crime or abuse; (3) obtain psychological counseling or mental health services related to an experience of crime or abuse; or (4) participate in safety planning or take other actions to increase safety from future crime or abuse.

Employers must provide employees written notice of these rights. Employers should work with counsel to revise their handbook provisions on jury duty and domestic violence leave to reflect these changes and inform HR managers so they are aware of these expanded uses for sick pay.

Senate Bill 477 – California Fair Employment and Housing Act

Effective January 1, 2026, Senate Bill 477 tolls the window for a complainant to initiate a civil action if they timely appeal to the CRD’s closure of their complaint until one year after the department issues a written notice that it remains closed.

The bill also expands the circumstances for tolling the CRD’s time to bring a civil action against an employer alleged to have committed an employment violation where there is a failure to eliminate the unlawful practice through conference, conciliation, mediation, or persuasion, to include (1) the period of time specified in a written agreement between the CRD and a respondent executed before the expiration of the applicable deadline; (2) the period of time for which the CRD’s investigation is extended due to the pendency of a petition to compel compliance with the CRD; and (3) during a timely appeal within the CRD of the closure of the complaint by the CRD.

If the department finds that a complainant’s complaint relates to a complaint filed in the name of the director or a group or class complaint for purposes of investigation, conciliation, mediation, or civil action, the department must issue a right-to-sue notice after the complaint has been fully disposed of and all administrative proceedings, civil actions, appeals, or related proceedings have terminated. A “’group or class complaint’ includes any complaint alleging a pattern or practice.”

Senate Bill 513 – Personnel Records

Effective January 1, 2026, Senate Bill 513 will increase employers’ obligations for personnel file recordkeeping. Labor Code Section 1198.5 currently gives employees the right to inspect and receive their personnel records related to performance or grievances. Beginning in January, the bill redefines personnel records related to performance to include education and training records.

Additionally, the bill requires that employers include in an employee’s education or training records the following information:

(1) The employee’s name,
(2) The training provider’s name,
(3) The duration and date of the training,
(4) The core competencies of a training, including skills in equipment or software, and
(5) Resulting certification or qualification.

Employers should ensure that all active employee files incorporate this new required information.

Senate Bill 590 – Paid Family Leave – Care for Designated Person

Starting July 1, 2028, Senate Bill 590 broadens the scope of the Paid Family Leave program to cover individuals who take leave to care for a seriously ill “designated person,” defined as “any care recipient related by blood or whose association with the individual is the equivalent of a family relationship.” Employees must identify the designated person when first filing a claim for family temporary disability insurance benefits and, under penalty of perjury, state how they are associated or how their relationship is equivalent to a family relationship. Employees are eligible for up to eight weeks of paid family temporary disability insurance benefits, paid by the state, within any 12-month period.

Senate Bill 693 – Water Corporation Exemption From Meal Period Requirements

Effective January 1, 2026, Senate Bill 693 creates a new category of employees exempt from California’s meal period requirement — employees of a water corporation covered by a valid collective bargaining agreement that expressly provides meal period provisions among other wage requirements. The bill defines water corporation as “every corporation or person owning, controlling, operating, or managing any water system for compensation” in California. Employers that may be deemed a “water corporation” should determine whether this meal period exemption applies to its employees.

Senate Bill 53 – Artificial Intelligence Models and New Whistleblower Protections

Senate Bill 53 is the nation’s first law focused on regulating frontier AI models, including new protections for whistleblowers. Notable features include:

Effective January 1, 2026, Senate Bill 53 creates enhanced whistleblower protections for employees reporting AI safety violations. It prohibits employers who qualify as “frontier developers” from preventing or retaliating against employees responsible for assessing, managing, or addressing risk of critical safety incidents from disclosing their reasonable belief that the frontier developer’s activities pose substantial danger to the public health or safety or violate the law. A “frontier developer” is “a foundation model that was trained using a quantity of computing power great than 10^26 integer or floating-point operations.” These developers must provide clear written notice of this right to all employees annually.

Large frontier developers must also establish a reasonable internal process through which a whistleblower may anonymously submit good faith information on any risks to notify the large frontier developer’s officers and directors, who are to review it at least once per quarter. A “large frontier developer” is “a frontier developer that together with its affiliates collectively had annual gross revenues in excess of five hundred million dollars ($500,000,000) in the preceding calendar year.” A whistleblower may bring a civil case under the law against a frontier developer for injunctive relief, and, in a successful case, even recover attorneys’ fees.

In addition, developers must publish a frontier AI framework that explains their risk management practices. The law also imposes incident reporting obligations. Developers must report a critical safety incident within 15 days of discovering it. The report must be submitted within 24 hours if the incident poses an imminent risk of death or serious injury.

Violations of this bill may result in civil penalties of up to $1 million per violation, enforced by the attorney general.

For more information on the impact of Senate Bill 53, please see the article published by our Privacy + Cyber + AI group: California Transparency in Frontier AI Act Signed Into Law | Privacy + Cyber + AI.

Conclusion

California’s newest employment laws introduce stricter penalties and expand protections for employee rights. Employers must adapt by reviewing and revising policies to ensure compliance with these new requirements. Troutman Pepper Locke’s Labor + Employment attorneys are available to assist with maneuvering California’s new laws, updating existing policies, and ensuring timely compliance.

On November 14, President Trump issued an executive order, “Modifying the Scope of the Reciprocal Tariff with Respect to Certain Agricultural Products,” (the Order), narrowing the scope of the “reciprocal tariffs” to exempt certain agricultural products, signaling targeted duty relief alongside new trade framework agreements with El Salvador, Argentina, Ecuador, and Guatemala, as well as a separate trade deal framework with Switzerland and Liechtenstein. Furthermore, on November 20, President Trump issued another executive order, “Modifying the Scope of Tariffs on the Government of Brazil,” (the Brazil Order), which amends the tariffs originally imposed under Executive Order 14323.

Scope of the Order

Modifying the scope of reciprocal tariffs originally imposed under Executive Order 14257, as amended by Executive Orders 14266, 14298, 14316, 14324, 14326, and 14346 (collectively, Reciprocal Tariffs) — which declared a national emergency based on U.S. goods trade deficits under the International Emergency Economic Powers Act (IEEPA) — President Trump issued the Order exempting more than 200 agricultural products from the Reciprocal Tariffs. The White House said the agricultural exemptions result from the administration’s progress on various trade deals, including with countries that produce agricultural goods not commonly grown in the U.S.

The exempted agricultural products include coffee and tea, tropical fruits and fruit juices, cocoa and spices, bananas, oranges, tomatoes, beef, and fertilizers, covering goods classified in Harmonized Tariff Schedule of the United States (HTSUS) Chapters 02, 07, 08, 09, 10, 11, 12, 15, 16, 18, 19, 20, 21, 22, and 31). These are goods listed as under Annex II of the Order. Importers should use HTSUS subheading 9903.01.32 to declare these goods as exempt from Reciprocal Tariffs.

As part of Annex I of the Order, the exempt goods include additional agricultural products covered by 11 other HTSUS subheadings from Chapters 08, 14, 19, 20, 21, and 33, which include tropical fruit, communion wafers, acai, citrus juice, and coconut water, among other items. Importers should use HTSUS subheading 9903.02.78 to declare these goods as exempt from Reciprocal Tariffs. The full list of all agricultural goods exempt from Reciprocal Tariffs can be viewed here.

Eligibility for the exemption applies to merchandise entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. ET November 13, 2025. Any overpaid duties on affected imports may be refunded pursuant to U.S. Customs and Border Protection (CBP) procedures. Any other applicable duties, including antidumping and countervailing duties (AD/CVD), remain in effect and are not eliminated by the Order.

Western Hemisphere Trade Frameworks

The administration’s trade agreements with El Salvador, Argentina, Ecuador, and Guatemala aim to expand U.S. exports and streamline regulatory approvals. These countries have agreed to the following:

El Salvador has agreed to accept U.S. motor vehicle safety and emissions standards and to recognize U.S. Food and Drug Administration certificates and prior marketing authorizations for pharmaceuticals and medical devices.
Argentina has agreed to provide “preferential market access” for U.S. exports in sectors including certain medicines, machinery, medical devices, and information technology products.
Ecuador has agreed to remove or reduce tariffs on sectors such as tree nuts, fresh fruit, wheat, wine, and distilled spirits, and to eliminate the Andean Price Band variable tariff on many agricultural goods.
Guatemala has agreed to facilitate digital trade by refraining from discriminatory digital services taxes, supporting the World Trade Organization moratorium on customs duties for electronic transmissions, and enabling trusted cross-border data flows.

In response, the U.S. has agreed to:

Lift Reciprocal Tariffs on certain textiles and apparel from El Salvador and Guatemala that meet the rules of origin set out under the Dominican Republic–Central America Free Trade Agreement (DR‑CAFTA); and
Extend Most Favored Nation (MFN) tariff treatment to certain goods originating from these countries that cannot be grown, mined, or produced in sufficient quantities in the U.S.

Switzerland and Liechtenstein Framework

The U.S., Switzerland, and Liechtenstein have agreed to the “Agreement on Reciprocal, Fair, and Balanced Trade” framework, which would establish a “cumulative Reciprocal Tariff rate” no higher than 15% for goods of Switzerland or Liechtenstein imported into the U.S., along with steps to remove barriers to U.S. exports to these countries and a planned $200 billion investment in the U.S. through 2026. The parties have further agreed to:

Pursue mutual tariff eliminations across agricultural and industrial sectors — including fresh and dried nuts, fish and seafood, and spirits such as whiskey and rum — and implement a Swiss tariff‑rate quota for U.S. poultry, beef, and bison.
Refrain from imposing digital services taxes, address non‑tariff barriers affecting U.S. poultry and dairy products, open markets to U.S. medical devices, and strengthen supply chain resilience through cooperation on export controls, sanctions, and investment screening.
Conclude trade negotiations by early 2026, with phased implementation thereafter.

The Brazil Order

In response to ongoing U.S. trade negotiations with Brazil and to mitigate rising domestic food prices, President Trump issued the Brazil Order, revising Annex I of Executive Order 14323 to expand the list of goods exempt from the 40% tariff imposed under Executive Order 14323 (the “Brazil Tariff”) that had been layered on top of existing duties. Goods exempt from the Brazil Tariff now include more than 238 HTSUS codes covering food and agricultural products, as well as items meeting the requirements of 11 additional HTSUS categories, including etrogs, tropical fruit, and coconut water. A full list of goods exempt from the Brazil Tariff can be found here. When making declarations to claim these exemptions, customs brokers and importers should use HTSUS 9903.01.81 for exempt Annex I goods and HTSUS 9903.01.90 for goods described in one of the 11 categories of agricultural goods that are exempt from the Brazil Tariff under Annex II.

These modifications apply retroactively to goods entered for consumption or withdrawn from warehouse on or after 12:01 a.m. ET November 13, 2025. Any overpaid duties on affected imports may be refunded pursuant to CBP procedures.

Conclusion

These developments underscore the Trump administration’s active approach to U.S. trade policy, balancing new protections with targeted relief. It is important to note, however, that these trade deal frameworks are not finalized trade agreements, but rather lay the groundwork for future negotiations. Additionally, stakeholders should continue to watch for changes in tariff policy, especially with the pending litigation surrounding tariffs (discussed in detail here, here, and here).

Troutman Pepper Locke and its Tariff + Trade Task Force will continue to monitor for further changes affecting the trade landscape. This alert is intended as a guide only and is not a substitute for specific legal or tax advice. For questions about the impact of these changes on your business, please contact our team.

In a precedential opinion issued on Oct. 15, 2025, the U.S. Court of Appeals for the Third Circuit held that willful blindness, or what other courts have described as an egregious refusal to see the obvious or investigate the doubtful, can support a strong inference of scienter when the undiscovered facts are those that rendered a statement false or misleading.

Click here to read the full article in The Legal Intelligencer.

Industry leaders, investors, and entrepreneurs gathered at Troutman Pepper Locke’s Philadelphia office for the 2025 Mid-Atlantic Health Care IT Forum, a program highlighting innovation and offering market insights from across the health care IT sector.

The agenda featured an insightful investor discussion that examined what industry investors are looking for, why the mid-Atlantic region is attractive for investment, and what to expect in the coming year. The panel was followed by presentations from five cutting-edge health care IT companies.

Opening the event, Thomas Dwyer, a Corporate/Private Equity partner at Troutman Pepper Locke and co-chair of the firm’s emerging company and venture capital group, welcomed attendees and thanked sponsors for their support. He also reported resounding success from the last forum in 2023, noting that five presenting companies have completed full funding rounds since the event.

Investor Panel

Dwyer introduced the investor panel, which included Jarred Bressner, a Johns Hopkins-trained orthopaedic surgeon and principal at Activate Venture Partners, and Saul Richter, the founding and managing partner of Rittenhouse Ventures, who has more than 20 years’ experience investing in the health care technology space.

Kicking off the discussion, Dwyer asked the panelists to elaborate on their firms’ investment approach.

According to Bressner, Activate prefers to invest early, often in the first round of institutional financing. The firm typically invests into Seed and Series A rounds, committing $1.5 to $3 million at the outset, while allocating adequate reserves to continue supporting companies as they grow.

“We like to think that we are partnered with the founding entrepreneurs and working on something together,” Bressner said.

Richter’s firm generally looks for capital-efficient companies with $2 million to $10 million dollars in revenue. Currently, approximately 50% of Rittenhouse’s investments are in health care, but the firm is always looking for more.

According to Richter, “We always say we’ll do as much health care as we can because we’re based in the region, and this region really has strong health care chops.”

When Dwyer asked why the mid-Atlantic region is so conducive to health care investment, Bressner and Richter agreed the region’s phenomenal health care infrastructure was a significant factor, including the high concentration of academic medical centers, a quality talent pool, and the deep pharma presence in Philadelphia and the broader region.

Richter noted that the region is on par with Silicon Valley and other prominent health care IT markets, though in many cases is more affordable.

Bressner also alluded to different regional approaches. “On the West Coast, an outsider can come in with a ton of capital really fast and disrupt industries,” but cautioned that “moving fast and breaking things” isn’t always ideal in health care. He went on to say the East Coast approach tends to be more measured, disciplined, and value-oriented.

Dwyer then turned the conversation to the best way for entrepreneurs to approach investors.

Both panelists recommended pitches be short and sweet. Richter also noted a warm introduction goes a long way, as coming in as a known quantity can get your deal to the top of the stack.

Dwyer closed by asking panelists about what to expect in the coming year.

Richter observed that there has been some new energy coming back into the market with some successful health care IT IPOs and with large strategics looking to compete in the “AI arms race” after the rollercoaster of the last five years. But while wind may come back into the sails, he thinks there’s still some investor caution.

“I’m pretty optimistic. But the energy can change pretty quickly and it does,” Richter said.

Dwyer then turned it over to questions from the audience, concluding the panel.

Company Showcase

Following the investor panel, Troutman Pepper Locke associates Stephen Fox and Ethan Zook introduced the company showcase, featuring five standout health care IT companies:

DTxPlus offers a voice-based AI health companion that is fully integrated with EMRs to provide disease management and care coordination for patients with chronic conditions.
Keriton, Inc. provides an EMR-integrated SaaS platform for inpatient neonatal and pediatric feeding management.
Intercept Telehealth is a tech‑enabled virtual ICU service provider that deploys remote, intensivist‑led teams in ICUs.
Phia Health offers an AI‑driven maternity and postpartum platform that provides continuous monitoring to detect complications, as well as same‑day clinical intervention.
Pursuant Health provides convenient, self-service health stations to pharmacies and other retailers.

The Health Care IT Forum concluded with a networking reception where attendees connected with investors, presenters, and colleagues to continue conversations around market opportunities. Other Troutman Pepper Locke attendees included Christopher Miller, Kathleen Swan, Gil Greber, and Emily Makar.

Thank you to our sponsors for supporting this year’s event: Activate Venture Partners, Ben Franklin Technology Partners of Southeastern Pennsylvania, Fairmount Partners, G-Squared Partners, HIMSS Delaware Valley Chapter, HIMSS-Emerge, Lockton, Philadelphia Health Link, and J.P. Morgan.

On November 14, the Department of Energy (DOE) publicly announced its decision to allocate $355 million in new funding to expand domestic production of critical minerals and critical materials essential to U.S. energy, manufacturing, transportation, and national defense.

This latest tranche of DOE funding will be disbursed via non-procurement awards under two Notices of Funding Opportunity (NOFO) issued by DOE’s Office of Fossil Energy (OFE). Funding applications are due to DOE OFE by December 15, 2025.

The first NOFO, Mines & Metals Capacity Expansion – Piloting By-Product Critical Minerals and Materials Recovery at Domestic Industrial Facilities (DOE-FOA-0003583), will provide up to $275 million to construct or improve domestic facilities capable of extracting critical minerals and metals from existing industrial and coal byproducts (such as coal ash, mine waste, or acid mine drainage, among others). The second NOFO, Mine of the Future – Proving Ground Initiative  (DE-FOA-0003390), will provide up to $80 million to support demonstration and proving ground activities for innovative mining and processing approaches that can be replicated nationally. Together, these NOFO opportunities aim to catalyze projects that move beyond pilot concepts to commercial‑scale production.

Federal Government Focus on Critical Mineral Projects

Demand for critical materials and minerals continues to grow, and federal procurement and industrial policy increasingly favors domestic sourcing. In August, DOE announced its intent to issue a $50 million NOFO, Critical Minerals and Materials Accelerator (DE-FOA-0003588), focused on research and development of innovative processing technologies at bench scale for one or more critical minerals and materials. This funding has not yet been released. Additionally, the Department of Defense, acting through the Defense Logistics Agency, is actively supporting several planned projects to engender private partnerships for domestic manufacture of battery end products, components, and materials ($20 million), and for strategic and critical materials supply chain development ($95 million).

Acting on these NOFOs and grant announcements can expedite the timeframe for bringing new capacity online, improve cost positions through federal cost share, and better position domestic producers to timely fulfill customer expectations for a secure domestic supply of critical minerals and materials, while meeting all regulatory requirements. The opportunities are well‑suited to entities with existing access to byproduct streams, established sites, or existing process infrastructure — allowing for more expedient realization of near‑term production targets and measurable community benefits.

Overall, this funding should help to create pathways for utilities and industrial operators to monetize legacy waste streams, for mining companies to de‑risk technologically advanced processes, and for technology providers to scale up demonstration projects into commercially viable producers. Energy sector participants — including power generators, midstream operators, battery material suppliers, and recycling firms — can leverage the federal funding to mitigate supply chain risk for electric vehicles, grid storage, and advanced manufacturing, while converting environmental liabilities into strategic, and readily monetizable, assets.

Next Steps

Those interested in applying for federal funding should obtain the NOFOs and anticipate DOE competitive funding rounds: clear technical and commercialization pathways, robust project management, credible offtake or market strategy, and readiness on permitting and environmental compliance.

Of course, the grant application process can be intensive; it may require significant effort by the applicant to timely meet the December 15 deadline for initial submission of applications, as well as future deadlines for submission of additional documentation for the project described in the funding application. The Troutman Pepper Locke team is here to consult and support those interested in pursuing federal support.

This article was originally published in World IP Review on November 21, 2025 and was republished in Life Sciences Intellectual Property Review on November 24, 2025.

Recent PTAB rulings on ‘settled expectations’ have left legal practitioners guessing. Andrew Zappia of Troutman Pepper Locke breaks down the conflicting case law and outlines what clients must do to survive this shift in discretionary denial practice.

In 2025, the U.S. Patent and Trademark Office (USPTO) introduced “settled expectations” as a new potential basis for discretionary denial in inter partes review (IPR) and post grant review (PGR) proceedings. Under this new doctrine, long-standing patents are presumed to have “settled expectations” regarding their validity, making such patents more difficult to challenge in IPR and PGR proceedings.

This doctrine is not only new, but also anything but settled. In practice, Patent Trial and Appeal Board (PTAB) rulings applying the doctrine have been not particularly consistent, making for an unpredictable landscape for petitioners, patent owners, and legal practitioners alike.

Now, the USPTO is taking steps that may result in more uniform settled expectations decisions – or even less clarity. On October 17, newly confirmed USPTO director John Squires issued a memorandum centralizing institution decisions under the director. A few weeks later, director Squires followed up by issuing a batch of thirteen denials with no written opinions, leaving petitioners and patent owners in the dark as to his reasoning. With Director Squires’ initial approach, it remains unclear if the “settled expectations” doctrine is being applied any differently.

The Rulings

The first application of “settled expectations” came in iRhythm Techs. Inc. v. Welch Allyn Inc., IPR2025-00363 (June 6, 2025). There, the PTAB issued a discretionary denial even though the Fintiv factors favored IPR institution. Acting Director Coke Morgan Stewart concluded that the patent’s long time since issuance and the petitioner’s delay in seeking review (10 months after being sued by the patent owner, despite petitioner’s prior knowledge of the patent), outweighed the Fintiv factors and justifying discretionary denial.

In a subsequent case (Dabico Airport Solutions, Inc. v. AXA Power APS, IPR2025-00408 (June 18, 2025), Stewart indicated that general patent age of six years from issuance would be sufficient for settled expectations to apply, noting this time period aligns with the time period for which past patent infringement damages may be sought. However, the announcement of this standard has not brought clarity, but just more complexity and unpredictability.

Petitioners Cannot Rely on the Six Year Standard

While acting director Stewart found settled expectations for a patent that had been issued 10 years earlier in iRhythm, and later referenced six years as a general guideline for settled expectations to apply, subsequent decisions have made it clear that six years is not safe guideline for petitioners seeking institution. Some petitions filed within six years of a patent’s issuance have still been denied based on settled expectations (Kahoot! AS v. Interstellar Inc., IPR2025-00696, July 31, 2025; and Yangtze Memory Tech Co., Ltd. v. Micron Tech., Inc., IPR2025-00501, August 14, 2025). These rulings suggest that the age of the patent is one factor, but even if a petition is filed before six years from patent issuance, the PTAB still might find that settled expectation will defeat institution.

Petitioner’s Lack of Knowledge Does Not Necessarily Overcome Settled Expectations

There have been a few rulings that suggest that petitioners that have not been put on notice of potential infringement (constructive or otherwise) may potentially overcome a settled expectations finding. Acting director Stewart noted that settled expectations can be overcome if a patent has not “been commercialized, asserted, marked, licensed, or otherwise applied in a petitioner’s particular technology space.” (Intel Corp. v. Proxense LLC, IPR2025-00327, June 26, 2025). Based on this, patents in force for 10 and 12 years, respectively, were still subject to institution because the patents were never raised in the petitioners’ technology spaces. (Shenzen Tuozhu Technology Co. Ltd. v. Stratasys, Inc., IPR2025-00531, July 17, 2025; Home Depot U.S.A., Inc. v. H2 Intellect LLC, IPR2025-00480, Sep. 4, 2025).

However, other decisions have reached the opposite conclusion. In one case, settled expectations were found, even though the petitioner had no prior knowledge of a patent that has issued eight years earlier. (Dabico Airport Solutions, Inc. v. AXA Power APS, IPR2025-00408, Jun. 18, 2025). Likewise, in another proceeding, the failure of a non-practicing entity to commercialize or assert a patent in the petitioner’s technology space was not enough to overcome settled expectations “without more.” (Google LLC v. SoundClear Tech LLC, IPR2025-00345, August 4, 2025).

Putting Patent Holders on Notice May Overcome Their Settled Expectations . . . But Timing Matters

When the petitioner communicates with the patent owner regarding the patent at issue, and the patent owner takes no action, that can potentially defeat a settlement expectations argument. For example, settled expectations were not found when a patent owner waited 11 years after petitioner communicated about the patent and its activities to bring an infringement action, even though the patent at in question issued 13 years earlier. (Apple Inc. v. Ferid Allani, IPR2025-00856, Sep. 5, 2025). In contrast, when the petitioner only became aware of the patent at a later date and then communicated it did not believe a license was required, that was found insufficient to overcome what was terms strong settled expectations for patents that issued more than 9 years earlier. (DataDome v. ArkoseLabs Holdings, IPR2025-00693, Aug. 14, 2025). These examples show that a petitioner can defeat settled expectation if they take the initiative and communicate with the patent owner, but only if the patent owner delays after such communications, creating a risky scenario for petitioners.

Additional Considerations

In addition to the factors and trends note above, acting director Stewart has also alluded to the following:

Settled Expectations can apply based on extraordinary amounts of investment, time, and resources dedicated to research, development, trials, and regulatory approval. In the life sciences space, such evidence can support a finding of settled expectations, even for patents that have not been in force for an extended period. Amgen Inc. v. Bristol-Myers Squibb Co., IPR2025-00601(July 24, 2025).
Settled Expectations might not apply if there are changes in law. Though not yet applied in practice, acting director Stewart has alluded to potentially overcoming settled expectations if there is a significant change in law that “directly bears on the patentability of the challenged claims.” Intel Corp.

What Should Petitioners and Patent Owners Do?

The PTAB’s aggressive application of “settled expectations” doctrine has sparked a wave of mandamus petitions. Petitioners argue that the USPTO violated due process and the Administrative Procedure Act (APA) by changing the rules without notice-and-comment rulemaking and by applying the new doctrine to petitions filed before the announcement of the settled expectations doctrine.

However, for now, settled expectations remains as doctrine in use. Therefore, petitioners and patent owners should consider the following:

Petitioners should file early when possible:
Petitioners should monitor relevant patents and consider preemptive IPR or PGR filings before expectations become “settled.” However, depending on the facts and circumstances of a particular patent and petitioner’s business considerations, filing early may not always be beneficial or practical. It’s important to evaluate the unique facts and circumstances in each case.
Petitioners should track patent owner activity:
For petitioners, if the patent at issue has not been applied in the applicable technology space, gather clear evidence to support any IPR or PGR filing.
Petitioners should document communications with patent owners:
Similarly, petitioners should document any communications by or with patent owners or third parties, or other evidence that may support the petitioner’s settled expectations of non-enforcement. This can include the patent owner’s untimely response or failure to respond to petitioner’s communications regarding non-infringement, the expiration of the patent, or relevant changes in law.
Patent owners should document petitioner’s knowledge of the patent:
For patent owners facing an IPR challenge, present evidence that demonstrates the petitioners long-standing or constructive knowledge of the patent (including if the patent has been commercialized asserted, market, licensed or otherwise applied in the same technology space), the patent owner’s timely response to any communications from the petitioner, and any extraordinary investments of time, or resources dedicated to research, development, trials, and regulatory approval.
Patent owners should document investments in the technology:
For patent owners, showing substantial investment in the technology at issue can be used to support settled expectations even for patents that are less than six years old, especially in the life sciences space.

Conclusion

Settled expectations as a basis for discretionary denial has significantly altered strategy considerations for petitioners and patent owners. While the doctrine appears to have been intended to protect investments and promote stability, ironically its quick introduction and unpredictable application has created uncertainties and confusion. So “settled expectations” are for now anything but.

This article was republished in the December 2025 edition of E-Outlook, the Environmental & Natural Resources Section of the Oregon State Bar’s newsletter.

Late last week, the U.S. Fish and Wildlife Service (FWS) and the National Marine Fisheries Service (NMFS) (collectively, the Services) proposed revisions to the Endangered Species Act (ESA) regulations that, if finalized, will generally restore the regulations adopted in 2019, during President Trump’s first term. The proposed regulations were published in the Federal Register on November 21, 2025, starting a 30-day public comment period that ends on December 21, 2025.

The Services’ proposal consists of four separate rules covering the following topics: (1) protections for threatened species; (2) standards for species listings; (3) critical habitat designations; and (4) interagency consultations under Section 7 of the ESA. Notably, the Services are not proposing to reinstate the part of the 2019 rules that required economic impacts to be analyzed in the listing of new species. However, they do crack the door open for such considerations.

1. Rescission of the Blanket 4(d) Rule: The FWS is proposing to rescind the “blanket 4(d) Rule,” which provides that species listed by the FWS as threatened automatically receive the same protections as species that are listed as endangered. Instead, the protections for threatened species will be determined on a case-by-case basis, consistent with NMFS’ species listings process. This will not affect species previously listed by the FWS as threatened.

2. Species Listings: The Services propose to reinstate the 2019 standards in 50 C.F.R. § 424.11 for determining “foreseeable future” in listing threatened species and for delisting species. The proposal would also remove the current regulatory statement in 50 C.F.R. § 424.11(b) that listing decisions are made “without reference to possible economic or other impacts of such determination,” but does not go so far as to reinstate the 2019 requirement that listings include an economic impact analysis solely for informational purposes.

3. Critical Habitat Designations: The Services propose to reinstate the two-part analysis for critical habitat that was adopted in 2019: (1) identify any occupied areas that serve as critical habitat; and then (2) determine whether any unoccupied habitat is essential for the species’ conservation.

In a separate rule, the FWS is also proposing to clarify how economic and national security impacts are considered in critical habitat designations, and how certain areas can be excluded from critical habitat designations based on these considerations.

4. Interagency Cooperation / Section 7 Consultation: The Services propose largely reinstating the Section 7 consultation process adopted in 2019, but with several notable additions. First, the proposed regulations define the “environmental baseline” to clarify that existing infrastructure is excluded from the scope of the action under review. The proposed regulations would also modify how the Services address the “effects of the action” subject to consultation by clarifying the terms “reasonably certain to occur” and “consequences caused by the proposed action.” Additionally, the proposal narrows the scope of “effects of the action” by limiting the term to effects that the Services have the authority to regulate. This change is based in large part on the Supreme Court’s recent decisions in Loper Bright and Seven County Infrastructure Coalition. Another proposed change reinstates the 2019 rules by removing any reference to mitigation as a reasonable and prudent measure (RPM), with the Services explaining that they cannot require mitigation as a RPM because the statute does not include the terms “offset” or “mitigation.” Finally, the proposal indicates that “[t]he Services are still working on a revised Handbook” to replace the operative 1998 Consultation Handbook.

The preambles to all four proposed rules emphasize that these changes are intended to make the regulations more consistent with the plain language of the statute and current legal principles, and to remove extraneous regulations consistent with Executive Orders 14154 and 14219 and Secretarial Order 3418. According to the Services, the changes are consistent with recent U.S. Supreme Court rulings regarding the scope of federal agency authorities, including Loper Bright and Seven County Infrastructure Coalition, and will address legal uncertainties associated with pending challenges to the ESA regulations the Services adopted in 2024. Notably, none of these proposals touch on the FWS’ recent proposal to rescind the ESA’s definition of “harm.”

In Park7 Student Housing, LLC v. PR III/Park7 SH Holdings, LLC, the Delaware Court of Chancery held that a purchase agreement’s integration clause, which lacked anti-reliance language, barred the buyer’s fraudulent inducement claim based upon extra-contractual statements — that is, statements other than those in the purchase agreement itself — where the purchase agreement contained a term that contradicted the allegedly fraudulent extra-contractual statements.

Facts

The parties were members of a joint venture, whereby the plaintiffs (buyer) entered into a membership interest purchase agreement with the defendants (seller) to buy out the interests of another member. Under the joint venture agreement, the buyer had a right of first refusal (ROFR) to purchase properties held by the joint venture. The terms of the purchase agreement, however, waived the buyer’s pre-existing ROFR and instead required the buyer to obtain consents from certain mortgage lenders for the properties by a specified outside consent date. Recognizing that the consents could take time to obtain, the purchase agreement provided the buyer a “one-time right to extend” the outside consent date. The purchase agreement included an integration clause stating that “[t]his [purchase] [a]greement supersedes all prior agreements between the Parties with respect to the subject hereof and all discussions, understandings, offers, and negotiations with respect thereto, whether oral or written.” The purchase agreement did not include an anti-reliance provision.

As anticipated, obtaining the required lenders’ consents took time, prompting the buyer to exercise its option to extend the outside consent date. The parties subsequently agreed to five more extensions, but when the buyer sought a sixth, the seller terminated the purchase agreement and executed a letter of intent to sell the properties to a third party. The buyer filed suit and claimed in its amended complaint that it was fraudulently induced to enter into the purchase agreement and waive its pre-existing ROFR based on the seller’s pre-contractual representation that, if the buyer diligently pursued the required consents, the seller would grant as many extensions of the outside consent date as needed for the buyer to secure approval.

The seller moved to dismiss the buyer’s fraudulent inducement claim, arguing that any extra-contractual representation that the seller would provide unlimited extensions was barred because it directly conflicted with the express “one-time right to extend” the outside consent date in the purchase agreement.

Holding and Takeaways

The court granted the seller’s motion to dismiss, finding the buyer could not satisfy one element of the fraudulent inducement claim, justifiable reliance. Generally, to preclude a fraudulent inducement claim based on the defendant’s pre-contractual statements, Delaware law requires specific and unambiguous anti-reliance language. Usually, an integration provision without anti-reliance language fails to obviate a fraud claim. However, where the extra-contractual misrepresentation directly conflicted with an express term in the contract, the court found that an integration clause functions to preclude a fraud claim. The court reasoned that the result comes from the parol evidence rule, where evidence of a prior contradictory agreement cannot be considered to modify the terms of the integrated contract, with the integrated contract superseding the terms of any prior agreement covering the same subject matter. Thus, the buyer could not plead justifiable reliance on those conflicting and superseded pre-contract extra-contractual statements.

This decision is important to corporate attorneys and parties to purchase agreements, as it clarifies Delaware’s law on the drafting requirements to bar fraud claims based on extra-contractual statements. Parties should ensure that any critical pre-contract assurances are memorialized in the final agreement, as prior promises inconsistent with an express term in the contract will not be enforceable. An anti-reliance clause is required to bar all fraud claims based on extra-contractual representations, but an integration clause alone suffices when the alleged misrepresentation directly contradicts the contract.

On November 17, 2025, the Securities and Exchange Commission’s (SEC) Division of Examination announced its fiscal year (FY) 2026 examination priorities.[1] The most significant changes to the division’s priorities from FY 2025 include:

A focus on compliance with the soon-to-be-effective 2024 Regulation S-P amendments;
A focus on compliance with the newly implemented Regulation S-ID;
A change in the priorities of review for broker-dealer trading-related practices;
Commencement of registered security-based swap execution facilities reviews;
A new focus on AI-based cybersecurity risks when evaluating internal cybersecurity policies; and
The elimination of cryptocurrency regulation as an independent division area of focus for FY 2026.

1. Investment Advisers

Adherence to Fiduciary Standards of Conduct: The division continues to focus on advisers’ exercise of their duties of care and loyalty and has identified the following exam areas for review of advice and disclosure consistent with such duties:

(i) Advisers’ financial conflicts of interest;

(ii) Factors considered in providing investment advice to clients including costs, objectives, features, liquidity, risks, volatility, performance across conditions, time horizon, and exit costs;

(iii) Best execution;

(iv) Higher-risk products (such as alternative investments (e.g., private credit, locked-up private funds), complex or option‑based/leveraged exchange-traded funds (ETF), and ETF wrappers on less‑liquid strategies;

(v) Higher‑cost products.

Examinations will evaluate whether recommendations match product disclosures and clients’ objectives and risk profiles, with a new emphasis on separately managed accounts or newly registered funds (including allocation favoritism and interfund transfers).

Effectiveness of Advisors’ Compliance Programs: The division will continue to assess the effectiveness of advisers’ compliance programs, focusing on:

Conflicts that arise from account and product compensation structures;
Advisers’ practices or products — for example, activist engagements (timely, accurate filings such as Schedules 13D/13G, Form 13F, Forms 3–5, and Form N‑PX); and
Compliance when business models change or firms begin advising new asset types, clients, or services.

2. Investment Companies

For registered investment companies (RICs), including mutual funds and ETFs, examinations will continue to touch on disclosures, filings, governance practices, and compliance programs. Particular focus will be paid to:

(a) Fund fees and expenses, together with any associated waivers and reimbursements; and

(b) Portfolio management practices and disclosures, for consistency with statements about investment strategies or approaches and for consistency with amended Rule 35d-1 (the Names Rule).

Never-before-examined RICs, especially those recently registered, will be prioritized for examination.

The division has also updated its specific areas to assess developments, including:

(c) RICs that participate in mergers or similar transactions, including any associated operational and compliance challenges;

(d) Certain RICs that use complex strategies and/or have significant holdings of less liquid or illiquid investments (e.g., closed-end funds and interval funds), including any associated issues regarding valuation and conflicts of interest; and

(e) RICs with novel strategies or investments.

3. Broker-Dealers

(a) Broker-Dealer Trading-Related Practices.

Updated areas of review for broker-dealer equity and fixed income trading practices will include practices associated with extended hours trading, municipal securities, priority of orders, and mark-up disclosures. The division has noted that reviews will focus on:

(i) Best execution;

(ii) The pricing and valuation of illiquid instruments such as variable rate demand obligations, other municipal securities, and non-traded REITS; and

(iii) Disclosures regarding order routing and order execution information, included as required by Rule 605 under Regulation NMS.

(b) Retail Sales Practice.

The division will continue to review retail sales practices for compliance with Regulation Best Interest. Examinations are expected to concentrate on complex or tax-advantaged products like variable and registered index-linked annuities; ETFs investing in illiquid assets; municipal securities; private placements; structured products; alternative investments; and other products with complex fees or return calculations, exotic benchmarks, illiquidity, or rapid retail growth.

4. Additional Risk Areas

(a) Information Security and Operational Resiliency.

The division will review registrants’ practices to prevent disruptions to mission‑critical services and protect investor data. The division will also evaluate training and controls for emerging threats tied to artificial intelligence (AI) and polymorphic malware, how firms use threat intelligence, and overall operational resiliency.

(b) Regulation S-ID and Regulation S-P.

The Division plans to assess compliance with Regulations S‑ID and S‑P. For Regulation S‑ID, exams will review firms’ written Identity Theft Prevention Programs to ensure they detect, prevent, and mitigate identity theft in covered accounts — particularly red flag detection during account takeovers and fraudulent transfers — and include staff training. In advance of the Regulation S‑P amendment compliance dates, the division will engage firms on incident response program readiness; after the applicable compliance dates, it will examine whether firms have implemented policies and procedures with administrative, technical, and physical safeguards to protect customer information.

Notably, the division has not renewed its commitment to observing the proliferation of investments involving crypto assets and reviewing the offer, sale, recommendation, advice, trading, and other activities involving cryptocurrencies for FY 2026.

5. Other Market Participants

(a) Clearing Agencies.

New focus areas across for clearing agency registrants include recovery and wind‑down, collateral management, operations, and inter‑clearing agency arrangements.

(b) Municipal Advisors.

The division will continue examining municipal advisors’ fiduciary duty, MSRB Rule G‑42 compliance, and completion of required SEC filings and obligations (qualification, registration, recordkeeping, supervision).

The division will continue examining transfer agents’ processing of items and transfers, recordkeeping and retention, safeguarding of funds and securities, and SEC filings, focusing on those using emerging technologies. Following the compliance date, it will also assess adherence to the 2024 Regulation S‑P amendments, including the safeguards rule, disposal rule, and requirements to establish incident response programs.

(d) Funding Portals.

The division will examine funding portals’ arrangements with qualified third parties for maintaining and transmitting investor funds, ensuring required records are made and preserved, and reviewing written policies and procedures for reasonable design and compliance with applicable securities laws. After the compliance date, it may also assess compliance with the 2024 Regulation S‑P amendments.

(e) Security-Based Swap Execution Facilities (SBSEFs).

The division will begin examining registered SBSEFs, focusing on their rules and internal policies and procedures for trade monitoring, trade processing, and participant oversight. It will also assess how SBSEFs establish risk analysis and oversight programs designed to identify and minimize operational risk.

As we have in the past, we will continue to monitor these issues and will provide future client updates. This alert is not intended to be used as a substitute for legal advice and should be utilized for guidance only.

[1] U.S. Sec. & Exch. Comm’n, SEC Division of Examinations Announces 2026 Priorities, Press Release No. 2025-132 (Nov. 17, 2025) https://www.sec.gov/newsroom/press-releases/2025-132-sec-division-examinations-announces-2026-priorities.

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