December 2011 Client Alerts

January 30, 2012

Authored by: Bryan Cave

SEC and FINRA Issue Guidance on Broker Dealer Branch Inspections

Broker-Dealers who face inspections from regulators should take heed of recent guidance provided by the two principal securities regulatory agencies.  The regulators are the Financial Industry Regulatory Authority (“FINRA”) and the SEC’s Office of Compliance Inspections and Examinations.  Their jointly issued “National Examination Risk Alert” offers guidance on policies and procedures that broker-dealers should consider for branch office inspection programs.  To learn more, please click here to read the Alert published by the White Collar Defense & Investigations and Securities Litigation & Enforcement Client Service Groups on December 13, 2011.

State Taxation of Former Residents’ Retirement Income

Recently, the New York State Department of Taxation and Finance issued an Advisory Opinion regarding whether New York State may impose income tax on distributions from a nonqualified deferred compensation plan made to a former resident.  The opinion, consistent with federal law, concluded that New York State may not impose tax on these retirement payments.  To read more about the Advisory Opinion, please click here for the Alert published by the Employee Benefits and Executive Compensation Client Service Group on December 28, 2011.

Reminder Regarding Information Reporting For Corporate Actions That Affect Stock Basis

Issuers of securities who undertook an “organizational action” in 2011 that affected the basis of such securities are required to file an information return reporting such action.  The Information Return for actions taken in 2011 was due to be filed January 17, 2012 for actions taken in 2011.  For more information on timing of returns for actions in 2012 and subsequent years, please click here to read the Tax Advice and Controversy Client Service Group Bulletin published December 30, 2011. 

Recent Internal IRS Guidance Regarding Economic Substance Doctrine

In July 2011, the Large Business and International Division of the IRS issued an internal directive setting forth the process examiners should follow when determining whether to apply the economic substance doctrine to challenge a transaction.  To learn more about the process to be followed and insight into when the doctrine, as codified, may be applicable, please click here to read the Bulletin published by the Tax Advice and Controversy Practice Group in December 2011.

Expanded US Tax Reporting and Anti-Abuse Provisions designed to Discourage U.S. Persons from Hiding Income and Assets in Foreign Countries

The Foreign Account Tax Compliance Act enacted in 2010 as part of the Hiring Incentives to Restore Employment Act added Section 6038D to the Internal Revenue Code which requires any U.S. individual taxpayer holding interest in “specified foreign financial assets” that exceed in the aggregate a certain value threshold to attach newly issued IRS Form 8938 to the Taxpayer’s annual income tax return.  To read more, please click here for the Bulletin published by the Tax Advice and Controversy Client Service Group in December 2011.

 On December 19, 2011 the Treasury issued temporary regulations and the related Form 8938 and instructions in final.  To learn more about the temporary regulations and related Form, please click here for the Bulletin published by the Private Client Group in December 2011.

Sunshine Law Proposed Regulations Published; Reporting Requirements Delayed

On December 19, 2011, the Centers for Medicare and Medicaid (“CMS”) published proposed rules for implementation of the federal payment sunshine law, which was included within the federal health care reform law passed in March 2010.  To learn more about the obligations imposed under the law for manufacturers of drugs, medical devices, biologicals and medical supplies who make payments to physicians or teaching hospitals, please click here for the Alert published by the Life Sciences and Health Care Client Service Group on December 19, 2011.

Significant Changes To California Employment Law Effective January 1, 2012

Effective January 1, 2012, California employers will be required to comply with the California Wage Theft Prevention Act of 2011, which includes significant new burdens on employers to provide written notice of various types of information to employees at the time of hire.  To read more about the mandated information, please click here for the Alert published by the Labor and Employment Client Service Group on December 22, 2011.

Combination of Holme Roberts & Owen LLP into Bryan Cave LLP Bolsters Bryan Cave’s Sports, Sponsorship and Event Venue Group

To read about how the combination of Holme Roberts & Owen into Bryan Cave bolsters the firm’s Sports, Sponsorship and Event Venue Group, please click here to read the Alert published by that client service group on December 7, 2011. 

The Joy of College Sports

To read the article titled The Joy of College Sports — Why the NCAA’s Efforts to Preserve Amateurism are Both Lawful and in the Best Interest of College Athletics by Philip D. Bartz and Nicholas S. Sloey, published December 13, 2011, please click here.

New EU Sanctions Against Iran and Syria

On December 1, 2011, the European Council approved additional economic sanctions against Iran and Syria.  To learn more about the new sanctions, please click here to read the Memorandum published by the International Trade Group on December 5, 2011.

Be Careful What you Wish For:  DDTC Issues Proposed Brokering Revisions

Since Part 129 of the International Traffic in Arms Regulations (ITAR) was adopted, it has caused much confusion in the industry regarding who was a “broker,” if “brokering activities” (subject to U.S. jurisdiction) were occurring, and, if so, what requirements needed to be satisfied.  To read more, please click here to read the International Regulatory Bulletin No. 491 published by the International Trade Group on December 27, 2011.

Next Steps in Export Control Reform:  State and Commerce Departments Issue Proposed Rules Related to Jurisdiction of Ground Vehicles, Aircraft and Gas Turbine Engines

On November 7, 2011 and December 6, 2011, the Department of State, Directorate of Defense Trade Controls (DDTC) issued proposed rules to amend the International Traffic in Arms Regulations.  To learn more about the proposed rules, please click here to read the International Regulatory Bulletin No. 489 published by the International Trade Group on December 8, 2011.

Pilot VAT Reform Program Announced for Shanghai

In October 2011, the Chinese State Council announced that it would launch a pilot value-added tax reform program effective January 1, 2012.  To learn more about the industries to which the program will initially apply and the policy documents signaling the official transformation from a Business Tax to a value-added tax (“VAT”), please click here to read the International Regulatory Bulletin No. 490 published by the International Trade Group on December 9, 2011.