July 13, 2007
Congress Tightens “National Security” Reviews of Foreign Investment in the US
On Wednesday, Congress passed the “Foreign Investment and National Security Act of 2007” to formalize and tighten the process for reviews of foreign acquisitions of businesses in the US that raise potential national security concerns. The new Act amends the “Exon-Florio Amendment to the Defense Production Act” and codifies – as well as extends – recent trends toward more stringent review of foreign acquisitions by the Committee on Foreign Investment (CFIUS), which is an interagency committee chaired by the Treasury Secretary and composed of various representatives of the executive branch. There are also enhanced Congressional reporting requirements.
The new Act cleans up many of the provisions of earlier proposals considered problematic by the business community. We have posted memos regarding this development in our “National Security Considerations” Practice Area.
Status Check on Fairness Opinion Proposal
Following the filing of Amendment No. 4 – dated June 7th – to proposed NASD Rule 2290, many expected the revised rule proposal to be promptly published in the Federal Register with any comments to be submitted within 21 days and SEC approval granted shortly thereafter. To date, it does not appear the revised rule proposal has been published in the Federal Register. Instead, the NASD recently submitted Extension No. 7 to the rule proposal, extending the period for SEC action to August 31th. The prior period for SEC action was set to expire on July 23, 2007. All filings relating to the rule proposal can be found here.