Richard Manfredi, Author at Gibson Dunn

From the Derivatives Practice Group: This week, the CFTC issued a readout following a meeting of U.S. and U.K. authorities regarding central counterparty resolution.

New Developments

CFTC Issues Joint Readout of Principals’ Meeting of UK and U.S. Authorities Regarding Central Counterparty Resolution. On September 11, senior officials from the CFTC, SEC, FDIC, Federal Reserve Board, and Bank of England convened for a tabletop exercise on September 3, 2026, to discuss certain issues relating to the hypothetical resolution of central counterparties (CCPs). This meeting was one of a regular series of senior-level meetings held since 2017 to share views on CCP resolution and review the progress of an ongoing program of joint work among the agencies. [NEW]

CFTC Chairman Selig and Kansas State University Announce Agenda for October 22-23 AgCon Conference in Overland Park. On September 10, CFTC Chairman Michael S. Selig and the Risk Management Center at Kansas State University released the agenda for the Agricultural Commodity Futures Conference (AgCon) on October 22-23, 2026, in Overland Park, Kansas. Attendees will discuss topics related to market structure, changes in emerging markets, contract convergence, financing, data, access to clearing, artificial intelligence, and the state of the farm economy. The full agenda is available here. [NEW]

CFTC Issues Final Rule to Modify Clearing Requirement for Canadian Dollar- and Mexican Peso-Denominated Interest Rate Swaps. On September 2, the CFTC issued a final rule to modify its interest rate swap clearing requirement. The final rule updates the swaps required to be submitted for clearing to a derivatives clearing organization or an exempt DCO under part 50 of the CFTC’s regulations.

CFTC Staff Issues No-Action Position on Large Trader Reporting for Direct Participants. On September 2, the CFTC’s Division of Market Oversight announced it has issued a no-action letter to Electron Exchange DCM LLC, a designated contract market, which would allow Electron Exchange to submit large trader reporting on behalf of direct participants as if Electron Exchange’s contracts were exclusively self-cleared contracts.

CFTC Further Extends Compliance Date for Amendments to Form PF. On August 31, the CFTC published a Joint Final Rule with the Securities and Exchange Commission further extending the compliance date for the amendments to Form PF from October 1, 2026, to July 1, 2027. Extending the compliance date for the Form PF Amendments allows Form PF filers to avoid certain potentially significant costs associated with implementing the Form PF Amendments that the Commissions have subsequently proposed to amend and/or eliminate in a new rule proposal issued on April 20, 2026.

New Developments Outside the U.S.

ESMA Publishes Paper Concluding Ongoing Geopolitical and Economic Vulnerabilities Masked by Strong Investor Optimism. On September 10, ESMA published its second risk monitoring report of 2026, which set out the main risks and vulnerabilities in EU financial markets. According to ESMA, while markets have remained resilient, stretched technology valuations and heightened geopolitical tensions are testing this resilience in a climate of persistent inflation and weaker economic growth. [NEW]

ESMA Consults on Disclosure Requirements and Updates Guidelines and Q&As under the Prospectus Regulation. On September 9, ESMA published a package of materials under the Prospectus Regulation to reflect changes introduced by the Listing Act. The measures aim to promote supervisory convergence and contribute to ESMA’s simplification and burden-reduction efforts. The full set of materials are available here. [NEW]

ESMA signs Memorandum of Understanding with the Securities and Exchange Board of India. On September 4, ESMA signed a Memorandum of Understanding with the Securities and Exchange Board of India (SEBI) to facilitate cooperation and exchange of information in relation to the recognition of central counterparties established in India and supervised by SEBI.

ESMA to Host Data Day 2026. On September 4, ESMA announced that it was host Data Day 2026, which will take place on November 24, 2026 in Paris. According to ESMA, the event will bring together over 200 industry participants, regulators and other stakeholders to discuss key developments in supervisory reporting and regulatory disclosures, as well as the role of data in supporting more effective supervision and further integration in capital markets across the European Union. The full agenda is available here.

ESMA Consults on Reporting Framework for Clearing Activity at Recognized Third-Country CCPs. On August 18, ESMA launched a consultation on a proposed annual reporting framework for clearing activity at recognized third-country central counterparties (CCPs) aimed at improving supervisory visibility of EU firms’ exposures to such CCPs. The consultation paper sets out ESMA’s proposed Regulatory Technical Standards and Implementing Technical Standards under the European Market Infrastructure Regulation.

ESMA Confirms Go-live for Weekly Commodity Derivatives Position Reporting. On August 14, ESMA announces that the new weekly commodity derivatives position reporting framework will go live on September 3, 2026. From this date, market participants will be required to submit weekly position reports in accordance with the updated requirements, technical specifications and validation rules introduced by XML schema version v2.0.

New Industry-Led Developments

Global Standard-setting Bodies Publish Toolkit for Cyber Resilience at Financial Market Infrastructures (FMIs). On September 8, the Bank of International Settlements (BIS)’ Committee on Payments and Market Infrastructures (CPMI) and IOSCO published the Cyber Resilience Toolkit: Practical Considerations for FMIs toolkit and FMIs’ Reliance on Third-Party Service Providers: Challenges and Risks discussion paper. According to IOSCO, the toolkit provides practical considerations to support FMIs in strengthening their cyber resilience frameworks. Meanwhile, the discussion paper identifies and examines several key challenges related to the provision of third-party services to FMIs. [NEW]

ISDA and FIA Respond to Bank of England on CCP Resolution. On September 7, ISDA and the Futures Industry Association (FIA) responded to a Bank of England (BOE) discussion paper on central counterparty (CCP) resolution. The associations support greater clarity on valuation capabilities prior to a crisis scenario and the boundary between recovery and resolution, while stressing that default fund contributions are designed to mutualize default risk and should not become a mechanism for absorbing operational or other non-default losses. The associations caution against any change to the creditor hierarchy that would result in weakening the no-creditor-worse-off safeguard. [NEW]

ISDA Publishes Paper on Expanding Legal Agreement Coverage in the CDM. On September 4, ISDA published a paper that examines the recent extension of the Common Domain Model (CDM)1 to represent two of the most significant, and previously undeveloped, areas of its legal agreement model: umbrella agreements and contract amendments. The paper sets out why this structured, machine-readable representation matters, how each area is now modelled and the case for firms, vendors and infrastructure providers to adopt these standards. [NEW]

ISDA Publishes Omnibus Canadian Representation Letter. On September 2, ISDA published the Omnibus Canadian Representation Letter, which combines previously published representation letters drafted to assist firms in compliance with Canadian trade reporting, business conduct, regulatory margin and clearing classification rules. The Omnibus Canadian Letter is designed to be modular and allow additional modules as necessary to assist with compliance of Canadian regulations.

ISDA Publishes Paper on Accounting for Carbon Credits. On August 2, ISDA published a paper that updates and extends the analysis set out in ISDA’s October 2023 paper on accounting for carbon credits. While preserving the original focus on the accounting treatment of voluntary carbon credits and compliance carbon credits, it expands the analysis to address emerging issues and reflect important developments in accounting standard setting.

ISDA, FIA Respond to SEC on FICC Proposal to Implement a Dedicated Guaranty Fund. On September 1, ISDA and FIA submitted a joint response to the SEC, supporting the Fixed Income Clearing Corporation’s (FICC) proposal to establish a dedicated guaranty fund at its government securities division. The joint response also recommends that non-default losses should remain the responsibility of the CCP rather than being mutualized among members and calls for the retention of the current 10 business day event period, together with a cooling-off mechanism to better contain members’ exposure during periods of market stress.

Korea – FSS published its Guidelines on Margin Requirements for Non-Centrally Cleared OTC Derivatives Transactions. On September 1, the Financial Supervisory Service (FSS) of Korea published its Guidelines on Margin Requirements for Non-Centrally Cleared OTC Derivatives Transactions. The guidelines extend the temporary exemption for equity options from the margin requirements until August 31, 2027.

ISDA and FIA Respond to CFTC and SEC on Cross-margining. On August 31, ISDA and FIA submitted a letter to the CFTC and the SEC on the agencies’ joint request for comment on the implementation of portfolio margining and cross-margining of securities and derivatives, which was published in the Federal Register on June 30, 2026.

The following Gibson Dunn attorneys assisted in preparing this update: Jeffrey Steiner, Adam Lapidus, Hayden McGovern, Karin Thrasher, and Alice Wang.

Jeffrey L. Steiner, Washington, D.C. (202.887.3632, jsteiner@gibsondunn.com)

Michael D. Bopp, Washington, D.C. (202.955.8256, mbopp@gibsondunn.com)

Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)

Darius Mehraban, New York (212.351.2428, dmehraban@gibsondunn.com)

Jason J. Cabral, New York (212.351.6267, jcabral@gibsondunn.com)

Adam Lapidus, New York (212.351.3869, alapidus@gibsondunn.com )

Stephanie L. Brooker, Washington, D.C. (202.887.3502, sbrooker@gibsondunn.com)

William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com )

David P. Burns, Washington, D.C. (202.887.3786, dburns@gibsondunn.com)

Marc Aaron Takagaki, New York (212.351.4028, mtakagaki@gibsondunn.com)

Hayden K. McGovern, Dallas (202.887.3569, hmcgovern@gibsondunn.com)

Karin Thrasher, Washington, D.C. (202.887.3712, kthrasher@gibsondunn.com)

Alice Yiqian Wang, Washington, D.C. (202.777.9587, awang@gibsondunn.com)

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Gibson Dunn’s Workplace DEI Task Force aims to help our clients navigate the evolving legal and policy landscape following recent Executive Branch actions and the Supreme Court’s decision in SFFA v. Harvard. Prior issues of our DEI Task Force Update can be found in our DEI Resource Center.

Key Developments

On September 8, the accreditation council of the American Bar Association (“ABA”) voted 10-6 to repeal Standard 206, a longstanding requirement that law schools “demonstrate by concrete action a commitment to diversity and inclusion.” The requirement has been under scrutiny after President Trump issued Executive Order 14279 (“Reforming Accreditation to Strengthen Higher Education”), which called for the termination of “unlawful discrimination by American law schools” “under the guise of accreditation standards” and ordered the Secretary of Education to “assess whether to suspend or terminate the Council’s status as an accrediting agency under Federal law.” Voting was anonymous, although some of the 10 members of the ABA’s accreditation council who voted for repeal stated that their intention was to preserve the ABA’s accreditation authority.

On September 3, the U.S. Department of the Treasury and the Internal Revenue Service released proposed regulations that would deny tax-exempt status under Section 501(c)(3) to any private school that considers race, color, or national or ethnic origin in admissions, scholarships or loans, athletics, or any other “school-administered or school-supported program.” The proposal specifies that prohibited discrimination includes race- and national origin-based discrimination “for any purpose,” regardless of the intent behind the practice. In particular, the Treasury proposes to delete the provisions of Rev. Proc. 75-50 that have, since 1975, assured schools that policies favoring racial minority groups in admissions, programs, and financial assistance do not constitute discrimination when designed to promote a school’s nondiscriminatory policy. The Treasury estimates that the rule “may affect the 18,000 private elementary, secondary, and post-secondary schools in the United States that currently qualify for tax exempt status and the 750,000 students attending these schools who may qualify for scholarships allocated on the basis of racial, ethnic, or national identity.” The proposed regulation specifies that schools may still “take actions or adopt policies intended to eliminate prejudice and discrimination” by race-neutral means, and the preamble identifies geography, family income, first-generation status, hardship, military family status, and academic achievement as permissible criteria—suggesting that correlation with race alone does not trigger loss of exemption. Comments are due November 3, 2026. The rule would apply to taxable years beginning after May 31, 2027. For more information, please see our September 8 client alert here.

On August 25, Attorney General Todd Blanche announced that the Department of Justice (“DOJ”) and Deloitte reached a settlement in relation to a False Claims Act (“FCA”) investigation into the company. Under the settlement, Deloitte agreed to pay $21.5 million in exchange for resolution of allegations that the company “fail[ed] to comply with anti-discrimination requirements in its federal contracts” due to practices the United States contends “discriminat[ed] against employees and applicants on the basis of their race or sex.” Specifically, the government alleged that “Deloitte took race or sex into account when making hiring, promotion, and staffing decisions to achieve progress toward non-public race and sex-based workforce composition goals,” including by “tracking progress toward [] demographic goals,” “evaluat[ing] [Deloitte’s senior management], in part, based on their contributions to helping Deloitte achieve its workforce composition goals,” “sett[ing] goals pertaining to the demographics of employees staffed to federal contracts,” and “offer[ing] certain training, mentoring, leadership, development programs, educational opportunities or resources, and/or similar opportunities only to certain employees, with eligibility limited on the basis of race or sex.” Deloitte denies the allegations made against it. This marks the second DOJ DEI-related FCA settlement, following IBM’s $17 million settlement in April 2026.

On August 21, the Department of Labor implemented a number of revisions to the regulations implementing Section 503 of the Rehabilitation Act of 1973 in light of President Trump’s Executive Order (“EO”) 14173 (“Ending Illegal Discrimination and Restoring Merit-Based Opportunity”). Specifically, the DOL rescinded certain regulations applicable to federal contractors and subcontractors regarding affirmative action for individuals with disabilities under Section 503, including the section that required federal contractors to allow applicants to “self-identify” as disabled. It also rescinded the requirement that contractors collect and document various metrics (including hiring data) about applicants who self-identify as disabled. Finally, the Department also rescinded previous regulations which required contactors to conduct utilization analyses with the goal of achieving “7 percent of employment of qualified individuals with disabilities for each job group in the contractor’s workforce.” The rule goes into effect on September 21, 2026.

On August 17, the Department of Justice’s Civil Rights Division (“DOJ”) announced it is opening a compliance review into the College of William and Mary to determine whether its scholarships and student benefits include racial criteria that violate Title VI of the Civil Rights Act of 1964. In its announcement, the DOJ cited a number of scholarships, including some advertised for “future education leaders of color” and for law school applicants who attended Historically Black Colleges and Universities as undergraduates. In a press release, Assistant Attorney General Harmeet K. Dhillon said that “[w]e will find out if scholarships or other student benefits at William & Mary favor applicants of certain races. The Department will not turn a blind eye to race-based preferences, however they are packaged or portrayed by universities.”

On August 12, the Office of Legal Counsel (“OLC”) issued a memorandum opinion for the General Counsel of the National Science Foundation (“NSF”), which concludes that three NSF programs—the Improving Undergraduate STEM Education: Hispanic-Serving Institutions program (“IUSE: HSI”), the Alliances for Graduate Education and the Professoriate program, and the Louis Stokes Alliances for Minority Participation program—may no longer be administered because of their race- and sex-based criteria, which the OLC says are unconstitutional. The OLC specifically opined that the programs—which account for about $104 million of the $938 million that Congress recently allocated to the NSF for STEM education—fail both prongs of strict scrutiny. Relying on the U.S. Supreme Court’s 2023 decision in SFFA v. Harvard, the OLC memorandum explains that, in its view, the only relevant “compelling interest” that would justify “race-based government action” with respect to the programs is “remediating specific, identified instances of past discrimination that violated the Constitution or statute.” According to OLC, the programs’ authorizing statutes lack such a compelling interest because they do not include “findings about specific, identified instances of past discrimination” and only provide “general assertion[s] of past discrimination” or generalized “statistical disparities.” The OLC opinion also finds that certain programs failed to engage in a “narrow tailoring” of their race- or sex-based considerations and, in the case of the IUSE: HSI program, “employ[ed] a per se impermissible racial quota.” In addition, the OLC memorandum identifies two other programs as having unconstitutional aspects, but ultimately finds that the programs may continue if they are changed to exclude race- or sex-based considerations. Those programs are (1) Advanced Technological Education (“ATE”), which directed the NSF to prioritize applications that included outreach plans and goals for recruiting and enrolling women and other underrepresented populations in STEM, and (2) the ADVANCE Program, which was authorized in 1980 to increase women’s participation in scientific and technical fields.

On August 7, Haverford College and Jews at Haverford, an advocacy group consisting of students, faculty, alumni, and parents, reached a settlement to resolve their litigation stemming from claims that Haverford’s handling of antisemitism allegations violated Title VI of the Civil Rights Act of 1964. The details of the settlement were not made public in court documents. According to a statement from Haverford President Wendy Raymond, however, Haverford will undertake several actions to combat antisemitism on campus including: (1) enacting a revised Honor Code that removes language that could be perceived as distinguishing between students on the basis of identity-group “status”; (2) updating Haverford’s masking policy to require those who choose to wear a mask to confirm their identity upon request; (3) including information regarding Haverford’s nondiscrimination policy in Admissions materials; (4) clarifying that Haverford’s Civil Rights Director has exclusive jurisdiction over the school’s adjudication of and response to claims alleging antisemitic conduct; (5) affirming that campus events sponsored by or on behalf of those identified as Jewish and/or Israeli and advertisements for the same are entitled to effective security; and (6) clarifying that criticism of Zionism when used as a proxy for discriminatory behavior toward an individual or group based on their membership in a protected class violates Haverford policy. The case is Jews at Haverford et al. v. The Corp. of Haverford College, No. 2:24-cv-02044 (E.D. Pa.).

Media Coverage and Commentary

Below is a selection of recent media coverage and commentary on these issues:

The Associated Press, “Civil rights agency moves to drop subpoena action against Nike in DEI-related investigation” (August 12, 2026): The Associated Press’s Alexandra Olson reports that the Equal Employment Opportunity Commission (“EEOC”) has dropped its subpoena enforcement action against Nike, telling a Missouri federal court that Nike has now provided information and documents responsive to its subpoena, leaving “no remaining controversy.” The investigation stemmed from a complaint that EEOC Chair Andrea Lucas filed in May 2024, alleging that the company was discriminating against white employees in light of Nike’s own public disclosures regarding mentorship and diversity programs, data showing more minorities in leadership ranks, and a stated goal of 35% racial and ethnic minority representation in its corporate workforce by 2025. Olson reports that the subpoena sought years of employment data, including layoff-selection criteria, information regarding how Nike tracks and uses worker race and ethnicity data, and information on allegedly race-restricted development programs.
Law360 Employment Authority, “EEOC Says Univ. Fired Black Manager Over DEI Complaint” (August 12, 2026): Law360’s Anne Cullen reports that the EEOC sued Washington University in St. Louis, alleging that the university retaliated against a Black senior program manager at the medical school after she filed a discrimination charge. According to Cullen, the underlying charge concerned a mandatory DEI training that required the complainant and other participants to be assigned to separate virtual breakout rooms based on their race. The EEOC alleges that the complainant’s duties were reassigned after she filed her charge, and that her position was later eliminated. Cullen notes that this suit follows similar EEOC enforcement actions that seek to curtail “allegedly unlawful DEI programs,” including suits recently filed against Coca-Cola Beverages Northeast and the New York Times.
Law360, “Missouri Seeks To Block Minority Contracting Program” (August 12, 2026): Law360’s Madeline Lyskawa reports that the state of Missouri is seeking a preliminary injunction to block Kansas City’s minority and women business enterprise (“MWBE”) program. Lyskawa reports that the MWBE program began in 1996 and sets annual citywide goals for contracting with minority- and women-owned businesses. According to Lyskawa, the state argues that the program is unconstitutional for treating contractors differently based on race, and that its racial quotas and preferences cannot be justified without evidence of prior government discrimination.
Bloomberg Law, “Education Department Wins Second Chance to Explain DEI Survey” (August 12, 2026): Bloomberg Law’s Brian Dowling reports that a federal judge in the District of Massachusetts has declined to vacate the Education Department’s new admissions data survey, which remains paused. The plaintiffs, a group of state attorneys general and educational institutions, claim that the government’s survey exceeds the Education Department’s statutory authority, that it violates the Paperwork Reduction Act and the E-Government Act, and that it was proposed and adopted arbitrarily and capriciously. Judge F. Dennis Saylor IV declined to vacate the survey due to concerns about judicial overreach, forum-shopping, and separation of powers. According to Dowling, the Department’s survey seeks seven years of applicant-level data concerning race, income, parental education, test scores, and GPA from colleges and universities, in an effort to determine their compliance with the U.S. Supreme Court’s 2023 decision in SFFA v. Harvard, which struck down race-based affirmative action in college and university admissions. Following the judge’s order, Dowling reports that the Education Department now has until September 11, 2026, to justify the survey.
The Associated Press, “Researchers, advocates rail against government’s efforts to end workforce data collection” (August 11, 2026): The Associated Press’s Claire Savage and Alexandra Olson report that more than 20 speakers testified at an EEOC public hearing regarding the agency’s proposal to eliminate its annual collection of workplace demographic data. The EEOC voted 2-1 last month to stop collecting the data, arguing that the requirement may encourage discriminatory practices. Savage and Olson report that most of the testifying speakers opposed the change, with civil rights groups and researchers calling the data crucial for identifying systemic discrimination and tracking progress for women and racial minorities in the workplace.
Bloomberg, “Almost All Top US Companies Had Board Diversity Rules. Now Most Are Gone” (August 11, 2026): Jeff Green and Daniela Sirtori of Bloomberg News report that the use of diversity criteria for selecting corporate board members has gone from near-universal to uncommon among large US companies in the past three years. According to Green and Sirtori’s reporting, a recent analysis found that 61 of the S&P 100 companies have eliminated explicit diversity criteria for board members since 2023. Green and Daniela Sirtori report that these policy changes have accelerated over the past two years in response to the Trump administration’s elimination of DEI programs across the federal government, as well as its attempts to curb such programs in higher education and the private sector. They further report that the percentage of companies requiring diverse slates for board member selection has decreased from 58 to 12 percent in the past year.
Bloomberg Law, “Anti-DEI Group Files Bias Charge With EEOC Against Big Law Firms” (July 30, 2026): Bloomberg Law’s Tobi Raji reports that the conservative advocacy group Americans for Equal Opportunity (“AEO”) filed a second EEOC discrimination charge against Sponsors for Educational Opportunity (“SEO”), a nonprofit that places incoming law students in summer internships, and against 14 law firms participating in SEO’s Law Fellowship program. As Raji reports, the charge alleges that SEO selected fellows on the basis of protected characteristics, including race, national origin, and religion, in violation of Title VII. According to Raji, AEO filed the charge on behalf of its members who applied unsuccessfully to the fellowship. AEO alleges that SEO has adopted “seemingly neutral language” while still giving preference to applicants based on legally protected characteristics. At the time of Raji’s reporting, neither SEO nor the 14 law firms had commented on the charge.

Case Updates

Below is a list of updates in new and pending cases:

1. Employment discrimination and related claims

Diemert v. City of Seattle, et al., No. 2:22-cv-01640 (W.D. Wash. 2022), on appeal at No. 25-01188 (9th Cir. 2025): On November 16, 2022, the plaintiff, a white male, sued his former employer, the City of Seattle, alleging that the City’s diversity initiatives, which allegedly included mandatory diversity trainings involving critical race theory and encouraging participation in “race-based affinity groups, caucuses, and employee resource groups,” amounted to racial discrimination in violation of Title VII and the Fourteenth Amendment. The plaintiff also alleged that he had been subjected to a hostile work environment. On February 10, 2025, the court granted the City’s motion for summary judgment, holding that a reasonable juror could not find the City’s diversity initiatives created a hostile work environment or that the plaintiff experienced discrimination or retaliation. On February 24, 2025, the plaintiff appealed to the Ninth Circuit. The Ninth Circuit heard oral argument on April 23, 2026.
- Latest update: On July 31, 2026, the Ninth Circuit ordered both parties to file supplemental briefs addressing (1) whether the plaintiff-appellant has Article III standing to pursue his equal protection claim, and (2) whether there is a genuine dispute of fact as to whether the City classified employees based on race. In his supplemental brief, the plaintiff-appellant argues that the City classified employees based on race when it designed trainings for employees of particular races, identified employees who could or should attend trainings based on race, excluded or discouraged employees from participating in trainings because of race, and directed employees to affinity groups organized around racial identity. The City argues that plaintiff-appellant lacks standing because he was not personally denied the benefit of the challenged trainings and was not required to attend any of the trainings. The City further argues that the plaintiff-appellant’s claims for declaratory and injunctive relief could not redress his alleged harm, as he is no longer employed by the City. Finally, the City argues that it did not engage in racial classification because its trainings and affinity groups were voluntary, did not exclude anyone, and were not associated with any substantial benefit or burden.

2. Challenges to statutes, agency rules, executive orders, and regulatory decisions

Walls v. Sanders, Case No. 4:24-cv-00270 (E.D. Ark. 2024): On April 12, 2024, Arkansas teachers, students, and the Arkansas NAACP filed an action challenging Section 16 of the LEARNS Act, which prohibits the teaching of certain concepts associated with “Critical Race Theory.” The plaintiffs alleged that Section 16 violates the First and Fourteenth Amendments by chilling speech, discriminating on the basis of viewpoint, and disproportionately targeting Black students and educators. The suit followed the Arkansas Secretary of Education’s decision to revoke approval of AP African American Studies based on alleged violations of Section 16. On December 20, 2024, the court held the defendants’ motion to dismiss in abeyance with respect to claims involving: (1) public high school teachers’ Free Speech rights; (2) public high school students’ Free Speech rights; (3) public high school teachers’ Due Process rights; and (4) as-applied Equal Protection claims concerning African American teachers and students.
- Latest update: On August 5, 2026, the court granted the defendants’ motion to dismiss the as-applied equal protection claims, holding that although Section 16 might discriminate against certain ideas, “[d]iscriminating [against] ideas is not the same as discriminating against people, and the Equal Protection Clause is about discriminating against people.” The court declined to rule on the vagueness claims and ordered additional briefing on justiciability-related questions.
Landscape Consultants of Texas Inc., et al. City of Houston, et al., No. 4:23-cv-3516 (S.D. Tex. 2023): The Landscape Consultants of Texas and other plaintiffs sued the City of Houston and related entities, challenging its government contracting set-aside program for “minority business enterprises” as violating the Fourteenth Amendment and Section 1981. On November 29, 2024, the plaintiffs and the defendant Midtown Management District filed cross-motions for summary judgment. The City of Houston filed its own motion for summary judgment on November 30, 2024, contending that the plaintiffs lack standing and that the programs satisfy the requirements of the Equal Protection Clause.
- Latest update: On July 28, 2026, the court entered judgment in favor of the plaintiffs, permanently enjoining the implementation of the City of Houston’s Minority, Women, and Small Business Enterprise Program and Midtown Management District’s Minority, Woman, and Disadvantaged Business Enterprise Policy on the grounds that they violate the Equal Protection Clause of the Fourteenth Amendment. The court held, as a matter of first impression, that the constitutional framework articulated in SFFA v. Harvard (which struck down race-based affirmative action in college and university admissions) applies to race-conscious municipal public contracting programs. The court found that the City had failed to identify specific instances of past discrimination in its public contracting program and had not proven that the program satisfied strict scrutiny. The court also rejected the City’s argument that the claim was moot in light of a new ordinance that allowed vendors to meet contract participation goals through race-neutral alternatives “such as subcontracting with small or veteran-owned businesses,” reasoning that the new ordinance still mandated race-based contract goals and increased a subcontracting requirement as to minority-owned businesses. The court similarly found that Defendant Midtown Management District’s Minority, Woman, and Disadvantaged Business Enterprise Policy violates the Equal Protection Clause of the Fourteenth Amendment by discriminating on the basis of race.

3. Actions against educational institutions

Do No Harm, et al. v. David Geffen School of Medicine at UCLA, et al., Case No. 2:25-cv-04131 (C.D. Cal. 2025): On May 8, 2025, Do No Harm, Students for Fair Admissions, and a rejected applicant filed a class action complaint against the David Geffen School of Medicine at UCLA, UCLA, and the Regents of the University of California, along with numerous individual defendants including regents, university administrators, and admissions committee members. The plaintiffs allege that UCLA Medical School unlawfully uses race as a factor in admissions decisions in violation of Section 1983, Title VI, Section 1981, and California’s Unruh Civil Rights Act. The complaint also alleges that the University shut down an internal investigation into its admissions practices by requiring admissions committee members to sign nondisclosure agreements and refusing to assure cooperating witnesses they would not face retaliation. On December 23, 2025, the plaintiffs filed a second amended complaint, omitting claims under the Unruh Act and instead raising only federal claims under Title VI, Section 1981, and Section 1983. On February 24, 2026, the United States filed an intervenor complaint, alleging that the defendants violated the Equal Protection Clause of the Fourteenth Amendment by intentionally engaging in racial balancing that confers preferences in admissions without a legitimate governmental purpose. On March 16, 2026, the plaintiff-intervenor and the defendants filed a joint stipulation of dismissal without prejudice as to the individual defendants. On March 20, 2026, defendant Regents of the University of California filed an answer to the complaint, denying all claims and asserting various affirmative defenses, including lack of standing. On July 14, 2026, the United States filed a first amended complaint that added additional breach of contract and Title VI claims.
- Latest update: On July 31, 2026, the defendants filed a motion to dismiss the United States’ Amended Complaint-in-Intervention. The defendants contend that: (1) the United States cannot claw back funds already paid to UCLA under DOJ grants because Title VI limits the United States to forward-looking relief; (2) the United States cannot seek to terminate grants that have no plausible nexus to the alleged Title VI violations; (3) the United States fails to state a breach-of-contract claim, as it does not plausibly allege that UCLA Medical School’s compliance with Title VI was a contractual obligation or material term of the DOJ’s grants to UCLA; and (4) the United States is not permitted, “by either ordinary contract principles or Congress’s Spending Clause authority,” to engage in rescission and restitution of federal grant awards. On August 14, 2026, the United States filed an opposition to the defendants’ motion to dismiss, arguing that: (1) the United States raises sufficient facts regarding UCLA Medical School’s alleged discrimination to state a violation of Title VI; (2) contract law applies to grants under Title VI and permits retrospective relief; (3) Title VI compliance is material to the DOJ’s contracts with UCLA Medical School; and (4) Title VI applies University-wide such that UCLA Medical School’s alleged “violations of Title VI jeopardize federal financial assistance at the entire university, not just the school of medicine or the admissions office.”
Fowler v. Emory University, No. 1:24-cv-05353 (N.D. Ga. 2024): On November 21, 2024, a former Emory University employee sued the university, alleging that the Vice Provost for Career and Professional Development discriminated against white employees in investigations, discipline, hiring, and promotions. The plaintiff asserts employment discrimination claims arising from “unlawful race, gender, and age discrimination and retaliation” in violation of Title VII, the Age Discrimination in Employment Act, and Section 1981. On December 3, 2025, Emory moved for summary judgment, arguing that the plaintiff failed to adduce any evidence, direct or circumstantial, that Emory acted with discriminatory intent, that Emory presented sufficient evidence in support of its legitimate, nondiscriminatory, and nonretaliatory reason for terminating the plaintiff—specifically, that the plaintiff violated Emory policy by circumventing hiring protocols—and that the plaintiff failed to present evidence creating a genuine issue of material fact as to whether the non-discriminatory reason for his termination was pretextual. On January 21, 2026, the plaintiff filed an opposition, arguing that the record supports a prima facie case of discrimination because he was treated worse than Black colleagues and because his supervisor had a stated preference for employees of color. He also asserted that the record suggests his firing was pretextual because it was not done according to policy.
- Latest update: On July 13, 2026, the Magistrate Judge filed a Final Report and Recommendation that Defendant’s Motion for Summary Judgment be granted, which was submitted to the District Court without objection on August 3, 2026. First, the Magistrate determined that the plaintiff’s age discrimination claim cannot succeed because his supervisor already decided to terminate his employment before soliciting the summary at issue. Second, the Magistrate found that the plaintiff could not succeed on his sex and race discrimination claims because (1) although it was clear plaintiff’s supervisor disliked him, a reasonable jury could not find that this dislike was connected to his sex; and (2) the plaintiff and his Black colleague were not similarly situated as they held different ranks, had different tenures, and had different disciplinary histories. Lastly, the Magistrate found that although a jury could find that the plaintiff’s supervisor was not truly motivated by the plaintiff’s hiring protocol violation when terminating his employment, a reasonable jury could not find that the real reason was race or sex discrimination.
Wang v. University of Pittsburgh et al., No. 2:20-cv-01952 (W.D. Pa. 2020), on appeal at No. 25-1816 (3d Cir. 2025): On December 16, 2020, a former employee filed this action against the University of Pittsburgh, the University of Pittsburgh Medical Center, and other individual defendants, alleging that the defendants violated Sections 1983 and 1981, Title VII, and the Pennsylvania Human Relations Act (“PHRA”) by removing him as Director of the Clinical Electrophysiological Program after he published an article criticizing DEI considerations in the cardiology workforce. On December 21, 2021, the district court dismissed the plaintiff’s discrimination, whistleblower, defamation, and Section 1983 claims, reasoning that the plaintiff failed to allege action under a policy or by policymakers, and that the challenged conduct was not state activity. On March 29, 2024, the defendants moved for summary judgment, arguing that the plaintiff’s claims under Section 1981, Title VII, and the PHRA failed because he did not engage in protected activity and could not establish a causal connection between any purported protected activity and an adverse action, and because the defendants had legitimate, non-retaliatory reasons for removing him from the role. The defendants further argued that the plaintiff’s Section 1983 claims failed because the plaintiff could not demonstrate a deprivation of federal rights by a defendant acting under color of state law. On March 26, 2025, the court granted the defendants’ summary judgment motion in full, finding that the University of Pittsburgh was not involved in any alleged adverse actions, that the plaintiff’s removal from the role did not constitute state action, and that his comments during a private meeting with individual defendants did not constitute protected activity. On April 24, 2025, the plaintiff appealed the dismissal and summary judgment rulings. Briefing on appeal concluded on November 3, 2025. Oral argument was heard on March 2, 2026.

Latest update: On July 7, 2026, a three-judge panel of the Third Circuit affirmed in part, reversed in part, and remanded the lower court’s motion to dismiss and summary judgment rulings, allowing most of the plaintiff’s defamation and retaliation claims to proceed. As the Third Circuit reasoned, “[a] culture that cancels instead of counsels sacrifices persuasion at the altar of power.” To start, the court affirmed dismissal of the plaintiff’s First Amendment retaliation claim under Section 1983, holding that the hospital system, physician practice, and the individual defendants were acting as hospital employees rather than state actors when they removed the plaintiff from his job. The court also affirmed dismissal of the defamation claims against the journal’s editor and publisher for failure to plead actual malice. At the same time, the court reversed the dismissal of the plaintiff’s defamation claims against two individual defendants, the publishing association, the university, and the hospital system, reasoning that the truth of the defendants’ challenged statements (that the article was “racist” and “pseudo-scholarly” and that the retraction rested on “many” misstatements) could not be resolved at the pleading stage, and that the plaintiff plausibly pleaded actual malice where the speakers denounced the plaintiff’s article. The court also reversed summary judgment as to the plaintiff’s Title VII, Section 1981, and PHRA retaliation claims, holding that the plaintiff’s criticism of racial preferences was protected opposition; that his demotion, the ban on contacting fellows, residents, and students, and the hostile environment his superiors supported were non-trivial adverse actions; and that genuine disputes remained on causation and pretext. Finally, the court revived the plaintiff’s Title VI retaliation claim against the hospital system, which the court held receives federal funds to employ residents and fellows, and granted him leave to amend as to the university.

Legislative Updates

Missouri H.B. 2003: On June 30, 2026, Missouri’s House Bill 2003 was signed into law after a partial veto by Missouri Governor Mike Kehoe. The bill sets forth appropriations for the state’s Department of Higher Education and Workforce Development for fiscal year 2027 and includes a provision prohibiting the use of state funding for contracts, programs, or positions within higher education institutions that are “focused solely on diversity, equity, and inclusion, or similar initiatives.”
North Carolina S.B. 558: On June 24, 2026, North Carolina’s Senate Bill 558, the “Eliminating ‘DEI’ in Public Higher Ed” Act, took effect. The law prohibits public institutions of higher education from teaching so-called “divisive concepts,” defined to include the concept that “[t]he rule of law does not exist but instead is a series of power relationships and struggles among racial or other groups.” The law affects instruction and programming at public colleges and universities across the state.

The following Gibson Dunn attorneys assisted in preparing this client update: Jason Schwartz, Mylan Denerstein, Anna McKenzie, Cynthia Chen McTernan, Zakiyyah Salim-Williams, Molly Senger, Katherine Smith, Cate Harding, Cate McCaffrey, Anna Ziv, Benjamin Saul, Amy Pan, David Offit, Olympia Karageorgiou, Simon Moskovitz, Teddy Okechukwu, Beshoy Shokrolla, Angelle Henderson, Lauren Meyer, Kameron Mitchell, Taylor Bernstein, Jerry Blevins, Chelsea Clayton, Sonia Ghura, Samarah Jackson, Shanelle Jones, Elvys Morales, Allonna Nordhavn, Felicia Reyes, Eric Thompson, Laura Wang, Duncan Taylor, Sam Moan, Shreya Sarin, and Rachel Schwartz.

Jason C. Schwartz – Partner & Co-Chair, Labor & Employment Group
Washington, D.C. (+1 202-955-8242, jschwartz@gibsondunn.com)

Katherine V.A. Smith – Partner & Co-Chair, Labor & Employment Group
Los Angeles (+1 213-229-7107, ksmith@gibsondunn.com)

Mylan L. Denerstein – Partner & Co-Chair, Public Policy Group
New York (+1 212-351-3850, mdenerstein@gibsondunn.com)

Zakiyyah T. Salim-Williams – Partner & Chief Diversity Officer
Washington, D.C. (+1 202-955-8503, zswilliams@gibsondunn.com)

Molly T. Senger – Partner, Labor & Employment Group
Washington, D.C. (+1 202-955-8571, msenger@gibsondunn.com)

Greta B. Williams – Partner, Labor & Employment Group
Washington, D.C. (+1 202-887-3745, gbwilliams@gibsondunn.com)

Cynthia Chen McTernan – Partner, Labor & Employment Group
Los Angeles (+1 213-229-7633, cmcternan@gibsondunn.com)

Anna M. McKenzie – Partner, Labor & Employment Group
Washington, D.C. (+1 202-955-8205, amckenzie@gibsondunn.com)

We are pleased to provide you with the July-August 2026 edition of Gibson Dunn’s monthly European privacy, cybersecurity, and data Innovation update. Please feel free to reach out to us to discuss any of the below topics further.

European Union

07/27/2026

European Commission | Guidance | Cyber Resilience Act

The European Commission has published its guidance on the application of the Cyber Resilience Act (CRA), the EU regulation setting mandatory cybersecurity requirements for hardware and software products with digital elements throughout their lifecycle.

The non-binding guidance clarifies how key provisions should be interpreted and applied. It focuses on remote data processing solutions, free and open-source software, the notion of “support periods”, and the interplay between the CRA and other EU legislation. The guidance elaborates on core obligations such as risk assessments, reporting duties and vulnerability handling. The Cyber Resilience Act’s main obligations apply from 11 December 2027, with reporting obligations applying as of 11 September 2026.

For more information: European Commission Website / European Commission Guidance

07/23/2026

European Commission | Report | Adequacy Decision for the Republic of Korea

The European Commission finds that the Republic of Korea continues to provide an adequate level of protection of personal data.

The 2021 adequacy decision for the Republic of Korea allows the free flow of personal data from the European Union to this country. In its first review of this adequacy decision, the Commission confirms that the Republic of Korea continues to provide an adequate level of protection for personal data transferred. The report includes recommendations to further reinforce some of the safeguards provided by the South Korean framework, while acknowledging that the EU and Korean data protection frameworks have converged further.

For more information: European Commission Website

07/14/2026

EDPB | Decision | Objection to the Lead Supervisory Authority (LSA)

EDPB requires Belgian DPA to handle the merits of NOYB cookie banner complaint.

The decision concerns a dispute submitted by the Belgian Data Protection Authority (DPA) about a complaint against a Belgium-based company. The Belgian DPA, acting as Lead Supervisory Authority (LSA), proposed to dismiss the complaint on the basis of an abuse of Art. 77 GDPR and Art. 80(1) GDPR. The Austrian DPA, acting as a Concerned Supervisory Authority (CSA) since the complaint was lodged by the Austrian-based NGO Noyb, objected but the Belgian DPA still submitted the case to the EDPB. The EDPB considered the Austrian DPA’s objection relevant and instructed the Belgian DPA to not dismiss the complaint and to assess it on its merits. The LSA should now submit a new draft decision to the CSAs.

For more information: EDPB Website / EDPB Binding Decision 1/2026

07/08/2026

EDPB | Guidelines | Anonymization, Web Scraping and Blockchain

The EDPB has adopted guidelines on anonymization, on web scraping in the context of generative AI and the final version of its guidelines on the processing of personal data through blockchain technologies.

The new guidelines on anonymization bring clarity to the notion of anonymous data but also provide a practical framework for organizations to determine if anonymization is successful. In its guidelines on web scraping in the context of generative AI, the Board clarifies aspects of GDPR compliance of web scraping including the legal basis for such activities. These guidelines will be subject to public consultation until 30 October 2026. The EDPB also adopted the final version of its guidelines on blockchain technologies that can help organizations using blockchain technologies to comply with the GDPR.

For more information: EDPB Website / Guidelines 02/2026 on Anonymisation, Guidelines 03/2026 on web scraping in the context of generative AI and Guidelines 02/2025 on processing of personal data through blockchain technologies

France

08/10/2026

CNIL | Note | Data Protection Officer and Conflicts of Interest

The CNIL has published a note on how to identify and manage conflicts of interest arising from the DPO function.

DPOs will be in a situation of conflict of interest if they are entrusted with both the missions of Article 39 of the GDPR and missions likely to harm their performance, in particular where the additional tasks undermine the DPO’s independence. The CNIL recommends carrying out an analysis of potential conflicts of interest before assigning any new functions or tasks to the DPO.

For more information: CNIL Website [FR]

07/22/2026

CNIL | Tool | Pixels Recommendation

The CNIL published a Q&A answering the main questions raised by professionals regarding the implementation of its recommendation on pixels.

The professionals concerned have been required to comply with the CNIL’s recommendation on tracking pixels since 14 July 2026. The Q&A covers the scope of the recommendation, the responsibility of operators, the question of exempted pixels, the practical arrangements for obtaining consent, as well as the arrangements for applying the recommendation over time.

For more information: CNIL Website [FR]

07/09/2026

CNIL | Advice | Monitoring of Employed Person’s Activity

An employer has the power to oversee and monitor the activity of its staff and their use of workplace equipment. Nevertheless, this power cannot be exercised in an excessive manner and, depending on the technologies used, specific rules may apply.

As a general rule, the CNIL considers that three cumulative conditions apply to the employer before it can install a system for monitoring workers’ activity. To be lawful, a system for monitoring staff activity must cumulatively satisfy the tests of justification and proportionality, be submitted to the employee representative bodies and be brought to the attention of the employees.

For more information: CNIL Website [FR]

07/07/2026

CNIL | Advice | Mobile Apps and Geolocation

Following the publication of its recommendation on mobile applications, the CNIL has issued a reminder of the rules applicable to the collection and use of geolocation data from mobile apps.

Given the sensitivity of geolocation data and the risks associated with its use, the CNIL reminds that stakeholders must ensure compliance with applicable data protection rules. In this context, the CNIL is recalling the rules applicable to this personal data, as well as individuals’ rights to protect their privacy.

For more information: CNIL Website [FR]

07/02/2026

CNIL | Guide | Processing Of Players’ Data By Gambling Operators

To support operators, the French gambling regulator (ANJ), working closely with the CNIL, has published a non-binding guide clarifying how data protection rules apply in this sector.

Gambling operators process large volumes of personal data on players every day such as identity, contact details, banking data, financial transactions and gaming activity. This processing must comply with the GDPR while also meeting sector-specific obligations, particularly around preventing excessive gambling and combating money laundering and terrorist financing. The guide only covers processing tied to gambling activities under ANJ’s jurisdiction.

For more information: CNIL Website and the CNIL and ANJ Guide on the processing of players’ data by gambling operators [FR]

Germany

08/13/2026

BfDI | Press Release | Cookie Banners and Consent Management Services

The Federal Commissioner for Data Protection and Freedom of Information (BfDI) published recommendations on the handling of cookie banners and called for binding, machine-readable privacy preferences and consent management services to be anchored in EU law in further proceedings on the Digital Omnibus.

The recommendations are based on a nationwide survey according to which 60% reject cookies where this is possible with a single click, and 83% consider it important that their settings apply across all websites. The BfDI recalls that the Commission’s original Digital Omnibus proposal contained a provision (Article 88b GDPR) on automated, machine-readable consent and objection signals which was dropped by the Council and urges the co-legislators to revisit the issue in further negotiations.

For more information: BfDI Website [DE]

07/02/2026

Federal Government | Reform Program | Simplification of Data Protection Law

The coalition committee of CDU/CSU and SPD agreed on a reform program that includes plans to simplify German data protection law and to concentrate supervisory competences at the Federal Commissioner for Data Protection and Freedom of Information (BfDI).

The Federal Government intends to simplify national data protection law and make consistent use of the opening clauses of the GDPR and will advocate at EU level for non-commercial activities (such as those of associations), small and medium-sized enterprises and low-risk processing operations to be excluded from the scope of the GDPR. A national Data Code is to harmonize and simplify data law, procedures are to be streamlined and supervisory structures simplified and bundled, including a concentration of competences at the BfDI. The independent data protection authorities of the Länder favor coordination within the existing federal structure over centralization; they support a Bundesrat bill, introduced on 10 July 2026, that would give the Data Protection Conference (DSK) a statutory basis while retaining supervision at Länder level.

For more information: Federal Government and LfDI Baden-Württemberg and Bundesrat [DE]

Netherlands

08/27/2026

Autoriteit Persoonsgegevens | Announcement | Mandatory Publication of GDPR Sanctions

As of 1 September 2026, the Dutch DPA (AP) is legally required to publish the administrative sanctions it imposes for violations of the GDPR.

Following an amendment to the Dutch GDPR Implementation Act (UAVG), the publication of administrative sanctions imposed by the Dutch DPA (AP), such as fines, orders subject to penalty payments and processing bans, becomes a legal obligation rather than a matter of the authority’s own publication policy. The AP, which has long requested this legislative change, considers that the publication of sanctions strengthens legal certainty, makes enforcement more effective and enables other organizations to learn from identified infringements. The AP will also publish sanctions imposed under the Dutch Police Data Act and the Judicial and Criminal Records Data Act in the same manner.

For more information: AP Website [NL]

07/13/2026

Autoriteit Persoonsgegevens | Guide | New GDPR Guidelines for Generative AI

The Dutch Data Protection Authority (DPA) publishes two new documents that help organizations with the responsible development and deployment of generative AI under the GDPR.

The DPA sets out that, while generative AI offers social and economic opportunities, there are also risks to fundamental rights such as the protection of personal data. The GDPR guide for developers of generative AI models outlines how generative AI can be used safely, responsibly and in line with fundamental rights. While this guidance provides legal frameworks for developers, the practical tool gives substance to the guide by supporting organizations looking to acquire, deploy, and use generative AI. This tool helps controllers determine which GDPR obligations apply and which technical and organizational measures are needed.

For more information: Autoriteit Persoonsgegevens Website, the Guidance and the Practical tool [NL]

Denmark

07/01/2026

Datatilsynet | Statement | U.S. Supreme Court’s Ruling May Affect The DPF

Datatilsynet (Danish DPA) is monitoring developments following the U.S. Supreme Court’s ruling in Trump v. Slaughter and is urging data controllers to revisit their assessments regarding transfers of personal data to the United States.

The DPA is monitoring the case and, through the European Data Protection Board (EDPB), is assessing what effects the ruling may have on the validity of the adequacy decision underpinning the EU-US Data Privacy Framework (DPF). The DPF remains valid for now until the European Commission or the Court of Justice of the EU declares it invalid. The ruling could also affect transfers made on other legal bases and the DPA is calling on data controllers to revisit the country assessment within their Transfer Impact Assessments (TIAs).

For more information: Datatilsynet Website [DK]

Spain

07/21/2026

AEPD | Report | Processing of Personal Data with AI

The Spanish DPA (AEPD) published a report on the accuracy, suitability and quality of data in processing personal data with Artificial Intelligence.

The report examines the relationship between data quality and the GDPR’s principle of accuracy in the processing of personal data, arguing that both must be interpreted in light of the purpose pursued and the suitability of the processing. While the two concepts are related, they are not equivalent. Data quality is the broader of the two, covering both personal and non-personal data, whereas the accuracy principle should not be limited to the veracity or currentness of data. This distinction matters particularly in the context of AI, where governance processes must align data protection obligations with the demands of developing and deploying AI systems throughout their life cycle.

For more information: AEPD Report [EN]

United Kingdom

08/26/2026

ICO | Progress Update | Children’s Code Strategy

The ICO published a progress update on its Children’s Code strategy.

The ICO’s Children’s Code strategy, launched in April 2024, focuses on social media platforms (SMPs) and video sharing platforms (VSPs). Since its previous update of December 2025, the ICO notes that it has launched risk reviews of 14 age assurance providers (with targeted recommendations and monitoring to follow), taken enforcement action in relation to alleged unlawful use of children’s personal information, and secured commitments from some SMPs to strengthen their age assurance measures and improve transparency. Addressing the government’s recently announced proposal to prohibit certain platforms from offering their services to children under 16 through amendments to the Online Safety Act, the ICO emphasized that data protection obligations apply irrespective of any minimum age or service restriction. The Children’s Code will therefore continue to apply to the services concerned, as well as to other SMPs, VSPs and gaming platforms likely to be accessed by children. The ICO indicated that it will continue to engage with the government and other regulators, in particular Ofcom, on the implementation of the proposals.

For more information: ICO Website

07/15/2026

UK Government | Announcement | Information Commission Board

Seven non-executive members appointed to Information Commission Board, supporting the move to a new board-led governance model.

The Information Commission Board will take over all the functions and responsibilities of the Information Commissioner’s Office (ICO). It was established by the Data (Use and Access) Act 2025 to succeed the ICO as the United Kingdom’s independent data protection authority. The appointment of the new non-executive members forms an important part of the transition to this new governance model and will help shape the Information Commission’s strategic direction.

For more information: UK Government Website

The following Gibson Dunn lawyers prepared this update: Ahmed Baladi, Vera Lukic, Kai Gesing, Joel Harrison, Thomas Baculard, Ioana Burtea, Kelly Cannon, Billur Cinar, Hermine Hubert, Christoph Jacob, Yannick Oberacker and Phoebe Rowson-Stevens. Gibson Dunn lawyers are available to assist in addressing any questions you may have about these developments. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any leader or member of the firm’s Privacy, Cybersecurity & Data Innovation practice group:

Privacy, Cybersecurity, and Data Innovation:

United States:
Abbey A. Barrera – San Francisco (+1 415.393.8262, abarrera@gibsondunn.com)
Ashlie Beringer – Palo Alto (+1 650.849.5327, aberinger@gibsondunn.com)
Ryan T. Bergsieker – Denver (+1 303.298.5774, rbergsieker@gibsondunn.com)
Gustav W. Eyler – Washington, D.C. (+1 202.955.8610, geyler@gibsondunn.com)
Cassandra L. Gaedt-Sheckter – Palo Alto (+1 650.849.5203, cgaedt-sheckter@gibsondunn.com)
Svetlana S. Gans – Washington, D.C. (+1 202.955.8657, sgans@gibsondunn.com)
Lauren R. Goldman – New York (+1 212.351.2375, lgoldman@gibsondunn.com)
Stephenie Gosnell Handler – Washington, D.C. (+1 202.955.8510, shandler@gibsondunn.com)
Natalie J. Hausknecht – Denver (+1 303.298.5783, nhausknecht@gibsondunn.com)
Jane C. Horvath – Washington, D.C. (+1 202.955.8505, jhorvath@gibsondunn.com)
Martie Kutscher Clark – Palo Alto (+1 650.849.5348, mkutscherclark@gibsondunn.com)
Kristin A. Linsley – San Francisco (+1 415.393.8395, klinsley@gibsondunn.com)
Vivek Mohan – Palo Alto (+1 650.849.5345, vmohan@gibsondunn.com)
Ashley Rogers – Dallas (+1 214.698.3316, arogers@gibsondunn.com)
Sophie C. Rohnke – Dallas (+1 214.698.3344, srohnke@gibsondunn.com)
Eric D. Vandevelde – Los Angeles (+1 213.229.7186, evandevelde@gibsondunn.com)
Frances A. Waldmann – Los Angeles (+1 213.229.7914, fwaldmann@gibsondunn.com)
Debra Wong Yang – Los Angeles (+1 213.229.7472, dwongyang@gibsondunn.com)

Europe:
Ahmed Baladi – Paris (+33 1 56 43 13 00, abaladi@gibsondunn.com)
Patrick Doris – London (+44 20 7071 4276, pdoris@gibsondunn.com)
Kai Gesing – Munich (+49 89 189 33-180, kgesing@gibsondunn.com)
Joel Harrison – London (+44 20 7071 4289, jharrison@gibsondunn.com)
Lore Leitner – London (+44 20 7071 4987, lleitner@gibsondunn.com)
Vera Lukic – Paris (+33 1 56 43 13 00, vlukic@gibsondunn.com)
Lars Petersen – Frankfurt/Riyadh (+49 69 247 411 525, lpetersen@gibsondunn.com)
Christian Riis-Madsen – Brussels (+32 2 554 72 05, criis@gibsondunn.com)
Robert Spano – London/Paris (+44 20 7071 4000, rspano@gibsondunn.com)

Asia:
Connell O’Neill – Hong Kong (+852 2214 3812, coneill@gibsondunn.com)

Join our lawyers for a recorded, 30-minute webcast covering several tax practice topics. The program is part of a series of quarterly webcasts designed to provide quick insights into emerging issues and practical advice on how to manage common tax problems.

Topics discussed include:

What is a Contingent Value Right (CVR)?
What is the tax treatment of a CVR?
What are some considerations relating to the use of CVRs in a tax-free reorganization?

MCLE CREDIT INFORMATION:

This program has been approved for credit in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 0.5 credit hours in the area of professional practice. This course is approved for transitional/non-transitional credit.

Gibson, Dunn & Crutcher LLP certifies that this activity has been approved for MCLE credit by the State Bar of California in the amount of 0.5 hours of general credit.

Neither the Connecticut Judicial Branch nor the Commission on Minimum Continuing Legal Education approve or accredit CLE providers or activities. It is the opinion of this provider that this activity qualifies for up to 30 minutes toward your annual CLE requirement in Connecticut, including 0 hour(s) of ethics/professionalism.

PANELISTS:

Pamela Lawrence Endreny is a partner in the New York office of Gibson Dunn and a Co-Chair of the firm’s Tax Practice Group. Pamela represents clients in a broad range of U.S. tax matters. Her experience includes mergers and acquisitions, spin-offs, investment funds, joint ventures, financings, and capital markets transactions.

Jennifer Sabin is a partner in the New York office of Gibson, Dunn & Crutcher. She represents clients in a broad range of domestic and international tax matters, including taxable and tax-free mergers and acquisitions (public and private), spin-offs, joint ventures, financings, capital markets transactions, and restructurings. Her practice also includes transactions undertaken by private equity, hedge funds, and asset managers.

Ryan Rott is of counsel in the New York office of Gibson Dunn. He represents clients on a variety of domestic and international tax matters. Ryan advises on the tax aspects of private and public mergers and acquisitions, spin-offs, joint ventures, restructurings and financing transactions. He also has experience advising on initial public offerings using unique structures and strategies.

The Release sets forth a framework for the basic elements that the SEC would expect to see in an investment adviser’s compliance policy on political contributions.

On Thursday, September 3, 2026, the SEC issued a rule release (the Release) proposing to rescind the political contributions rule under the Advisers Act (Rule 206(4)-5) in its entirety.[1] In proposing to rescind Rule 206(4)-5, the Release cites a number of “unintended consequences” arising out of the Rule’s highly proscriptive approach to regulating so-called “pay-to-play” practices, resulting in undue restrictions being imposed on the First Amendment rights of investment advisers and their personnel. Nevertheless, investment advisers will still be expected to address conflicts arising out of political contributions in their compliance programs, even if on a more flexible and principles-based basis. In addition, the overlapping state, local and self-regulatory pay-to-play regimes described below would be unaffected by the proposal.

The Release follows up on a speech given by SEC Chairman Paul Atkins in March,[2] in which he described the Rule as a “trap for the unwary.” The Release expands on this critique, identifying a number of unintended consequences in the manner in which Rule 206(4)-5 has been administered in practice, including:

Imposing de facto strict liability that may result in excessive penalties being imposed for minor infractions;
Imposing undue restrictions on hiring practices due to Rule 206(4)-5’s “look-back” provisions;[3]
Overly broad and vague definitions of key terms that have led some advisers to impose blanket restrictions on political contributions by their personnel; and
A costly and time-consuming exemption process that has not provided the necessary flexibility to make Rule 206(4)-5 work equitably in practice.

The SEC also noted that the Supreme Court has found that political contributions are a form of free speech under the First Amendment that may only be limited to prevent quid pro quo forms of corruption,[4] and concluded that Rule 206(4)-5 imposes significant burdens on investment advisers’ First Amendment rights without a correspondingly large enough regulatory benefit.

Nevertheless, if the proposed rescission of Rule 206(4)-5 is adopted, it will not relieve investment advisers of the need to address political contributions in their compliance programs. Instead, the Release makes clear that the SEC still considers pay-to-play practices to be in breach of an investment adviser’s fiduciary duties under the general anti-fraud provisions of the Advisers Act. In addition, the Release cites other applicable laws and rules that investment advisers must take into account in designing their compliance programs, including the Compliance Program and Code of Ethics Rules under the Advisers Act,[5] Section 10(b) of the ‘34 Act, Section 17(a) of the ‘33 Act, and various federal and state anti-corruption laws.

In light of these considerations, the Release sets forth a framework for the basic elements that the SEC would expect to see in an investment adviser’s compliance policy on political contributions, including:

An assessment of the investment adviser’s risk profile with respect to conflicts arising from political contributions based on (i) the adviser’s relationships with various government entities, and (ii) its personnel and the roles such personnel have;
Policies and procedures reasonably designed to mitigate that risk, including (i) monitoring procedures, (ii) pre-clearance requirements, and (iii) policies on the use of third-parties to solicit government entities on behalf of the adviser; and
Policies and procedures addressing remedial measures, including (i) seeking the return of offending contributions, and (ii) disciplinary action against non-compliant personnel.

While this portion of the Release can be read to suggest that advisers will continue to be required to impose Rule 206(4)-5-like restrictions on their personnel, the rescission of Rule 206(4)-5 would give investment advisers greater flexibility to design their political contribution policies on a more risk-based basis and to eliminate some of Rule 206(4)-5’s more draconian elements — most notably the two-year “time-out” on compensation from a government client and the look-back on new hires, which have long been the provisions with the greatest practical impact on private fund advisers’ fundraising and hiring decisions.

Unlike most of the rules adopted by the SEC under the Advisers Act, Rule 206(4)-5 explicitly applies to both exempt reporting advisers (ERAs) and registered investment advisers (RIAs). The Release acknowledges this and the fact that, unlike RIAs, ERAs are not subject to the Compliance Program and Code of Ethics Rules. Nonetheless, the Release notes that ERAs are still subject to the general anti-fraud provisions of the Advisers Act and could still be held liable under the Act for making political contributions that are in breach of an ERA’s fiduciary duty. As a practical matter, ERAs — including many venture capital fund sponsors — should be cautious about treating rescission as an invitation to retire their political contribution policies altogether, particularly where they raise capital from state or municipal pension plans that impose their own contribution and disclosure conditions as a matter of contract.

The SEC has requested comments on the Release on a number of subjects, including whether complete rescission of Rule 206(4)-5 is warranted or whether alternative approaches such as modifying the existing Rule to make it more principles-based and flexible would be preferable. Comments may be submitted at this link and are due 60 days after publication of the Release in the Federal Register. In a separate statement on the Release, Commissioner Hester Peirce also requests comments on whether other similar pay-to-play rules applicable to brokers and municipal securities dealers should also be rescinded — a question of direct interest to sponsors that use placement agents subject to MSRB Rule G-37 and FINRA Rule 2030.

Rule 206(4)-5 remains in effect and advisers should continue to comply with its requirements until a final rule is adopted. Advisers should not relax pre-clearance, look-back diligence or
recordkeeping practices in reliance on the proposal, and should be mindful that a contribution
made now that triggers the two-year time-out would continue to have consequences during any
transition period. That risk is heightened by the current election cycle, which is likely to drive
increased contribution activity by adviser personnel while the Rule remains fully enforceable.

What This Means for Private Fund Advisers

State and local pay-to-play regimes would be untouched, and are often stricter. A
number of states and municipalities, as well as many public retirement systems, impose
their own contribution limits, look-backs and disclosure obligations.
Contractual pay-to-play commitments will survive the Rule. LPAs, side letters and
public plan management agreements often hard-wire Rule 206(4)-5 by reference, so
advisers should check those covenants before loosening internal policies.
Consider commenting — particularly on scope questions. Advisers with public plan
relationships may want to weigh in on the “covered associate” definition, de minimis
thresholds, the new-hire look-back, and transition relief for contributions that have
already triggered a time-out.

[1] Proposed rule; rescission: Political Contributions by Certain Investment Advisers

[2] See Jessica Corso, SEC’s Atkins Promises Changes to Adviser Pay-To-Play Rule, Law360 (Mar. 23, 2026).

[3] For example, under Rule 206(4)-5, investment advisers can be held liable for political contributions made by new employees up to two years prior to the time such persons are hired by the adviser.

[4] See FEC v. Ted Cruz for Senate, 596 U.S. 289, 305 (2022).

[5] Rules 206(4)-7 and 204A-1 under the Advisers Act.

The following Gibson Dunn lawyers prepared this update: Kevin Bettsteller, Marian Fowler, Shukie Grossman, Roger Singer, and Gregory Merz.

Gibson Dunn’s Investment Funds, Private Equity, or Securities Enforcement practice groups regularly advise asset managers on the matters discussed above. Please do not hesitate to contact the Gibson Dunn lawyer with whom you usually work, or any of the following practice group leaders, with questions.

Investment Funds:
Carolyn Abram – Dubai (+971 4 318 4647, cabram@gibsondunn.com)
Kevin Bettsteller – Los Angeles (+1 310.552.8566, kbettsteller@gibsondunn.com)
Albert S. Cho – Hong Kong (+852 2214 3811, acho@gibsondunn.com)
Candice S. Choh – Los Angeles (+1 310.552.8658, cchoh@gibsondunn.com)
Elodie Cinconze – Paris (+33 1 56 43 13 00, ecinconze@gibsondunn.com)
Xavier Comaills – Paris (+33 1 56 43 13 00, xcomaills@gibsondunn.com)
Shannon Errico – New York (+1 212.351.2448, serrico@gibsondunn.com)
Blake E. Estes – New York (+1 332.253.7778, bestes@gibsondunn.com)
Marian Fowler – Washington, D.C. (+1 202.955.8525, mfowler@gibsondunn.com)
A.J. Frey – Washington, D.C./New York (+1 202.887.3793, afrey@gibsondunn.com)
Shukie Grossman – New York (+1 212.351.2369, sgrossman@gibsondunn.com)
James M. Hays – Houston (+1 346.718.6642, jhays@gibsondunn.com)
Kira Idoko – New York (+1 212.351.3951, kidoko@gibsondunn.com)
Duncan K. R. McKay – New York (+1 212.351.2603, dmckay@gibsondunn.com)
Gregory Merz – Washington, D.C. (+1 202.887.3637, gmerz@gibsondunn.com)
Eve Mrozek – New York (+1 212.351.4053, emrozek@gibsondunn.com)
James O’Donnell – London (+44 20 7071 4261, jodonnell@gibsondunn.com)
Marie Préat – Paris (+33 1 56 43 13 00, mpreat@gibsondunn.com)
Christopher Scavone – New York (+1 212.351.4008, cscavone@gibsondunn.com)
Roger D. Singer – New York (+1 212.351.3888, rsinger@gibsondunn.com)
Edward D. Sopher – New York (+1 212.351.3918, esopher@gibsondunn.com)
C. William Thomas, Jr. – Washington, D.C. (+1 202.887.3735, wthomas@gibsondunn.com)
Kate Timmerman – New York (+1 212.351.2628, ktimmerman@gibsondunn.com)

Private Equity:
Richard J. Birns – New York (+1 212.351.4032, rbirns@gibsondunn.com)
Ari Lanin – Los Angeles (+1 310.552.8581, alanin@gibsondunn.com)
Michael Piazza – Houston (+1 346.718.6670, mpiazza@gibsondunn.com)
John M. Pollack – New York (+1 212.351.3903, jpollack@gibsondunn.com)

Securities Enforcement:
Mark K. Schonfeld – New York (+1 212.351.2433, mschonfeld@gibsondunn.com)
Jina L. Choi – San Francisco (+1 415.393.8221, jchoi@gibsondunn.com)
Tina Samanta – New York (+1 212.351.2469, tsamanta@gibsondunn.com)

Proposed regulations released on September 3, 2026 would deny tax-exempt status under section 501(c)(3) to any private school that considers race, color, or national or ethnic origin in any school program or policy for any purpose, including remedial or diversity objectives. Comments are due by November 3, 2026, and if finalized the rules would first apply to taxable years beginning after May 31, 2027.

On September 3, 2026, the Treasury Department and the Internal Revenue Service released proposed regulations that would condition a private school’s federal tax exemption on racial nondiscrimination in every school policy and program, regardless of whether the policy is for a remedial or diversity purpose.[1] When announcing the rule, Treasury Secretary Scott Bessent said that “rebranding race-based preferences as equitable, inclusive, or diversity-enhancing” does not change their discriminatory nature.[2]

The proposed rule would apply to private schools at any level, including colleges and universities. Loss of tax-exempt status would subject a school’s net income to federal tax and end the tax deductibility of contributions.[3] The proposal was published in the Federal Register on September 4, 2026, with comments due by November 3, 2026, and would first apply to taxable years beginning after May 31, 2027.[4]

Background

Section 501(c)(3) of the Internal Revenue Code exempts organizations organized and operated exclusively for charitable or educational purposes, and contributions to them are (subject to applicable limits) tax deductible under section 170.[5] The Supreme Court has read “charitable” to incorporate a common-law condition: a charity must “serve a public purpose and not be contrary to established public policy.”[6] In Green v. Connally, a three-judge court in the U.S. District Court for the District of Columbia held that the Code “must be construed and applied in consonance with the Federal public policy against support for racial segregation of schools, public or private.”[7] In Bob Jones University v. United States, the Supreme Court upheld the IRS’s denial of tax-exempt status to two schools with segregation-era policies, holding that “racial discrimination in education violates a most fundamental national public policy.”[8]

In 1971, the IRS adopted these principles in Revenue Ruling 71-447, which denies exemption to a private school lacking a racially nondiscriminatory policy as to students, and in 1975 issued Revenue Procedure 75-50, which prescribes how a school adopts, publicizes, and documents that policy.[9] Revenue Procedure 75-50 also provides that policies favoring racial minority groups “will not constitute discrimination” when the purpose and effect is to promote a school’s nondiscriminatory policy.[10]

In Students for Fair Admissions v. Harvard/UNC, the U.S. Supreme Court held race-conscious admissions practices at Harvard and the University of North Carolina unlawful under Title VI and the Equal Protection Clause.[11] The Court did not address federal tax exemption or private scholarships or other programs.

The Proposed Regulations

The proposal would add a new Treas. Reg. § 1.501(c)(3)-2 that reads as follows:

Nondiscrimination requirement. A private school is not operated exclusively for exempt purposes if it adopts, maintains, or enforces any policy or practice that discriminates on the basis of race, color, or national or ethnic origin in the administration of any educational policy, admissions policy, scholarship or loan program, athletic program, or other school-administered or school-supported program. . . . [D]iscrimination . . . includes any discrimination on the basis of race, color, or national or ethnic origin for any purpose.

The proposed rule defines “private school” as any section 501(c)(3) organization (determined without regard to the new nondiscrimination requirement) that is classified as an educational organization under section 170(b)(1)(A)(ii), other than a governmental unit, an agency or instrumentality of a governmental unit, or an organization owned or operated by such an agency or instrumentality.[12] Treasury estimates the rule “may affect . . . 18,000 private elementary, secondary, and post-secondary schools” and “750,000 students attending these schools who may qualify for scholarships allocated on the basis of racial, ethnic, or national identity.”[13]

Because the proposed rule includes both “school-administered” and “school-supported” programs, the proposed regulations appear to encompass not only a school’s own educational and financial programs, but also possibly programs involving third parties, including certain donor-based funds, mentoring and pre-college programs, third-party recruitment efforts, and other programs run by third parties with school funding, staff, or facilities.

The preamble states that the rule would reach all consideration of race in education “regardless of the intent behind or the legality of such discrimination,” including where such consideration is “defended as serving remedial or diversity-related objectives.”[14] Treasury therefore proposes deleting the provisions of Revenue Procedure 75-50 that permit school policies “that favor[] racial minority groups” where the purpose is to further “the school’s racially nondiscriminatory policy.”[15]

The proposal adds that schools may continue to “adopt policies intended to eliminate prejudice and discrimination . . . by means other than actions or policies that discriminate on the basis of race, color, or national or ethnic origin.” Treasury’s press release and the preamble’s economic analysis point to criteria such as geography, income, or first-generation status as alternatives, which the preamble says have “a weaker relationship with race and ethnicity.”[16] The preamble’s economic analysis also treats the post-SFFA decline in the share of underrepresented-minority students enrolled at the most selective institutions as evidence “consistent with compliance with the Supreme Court ruling in SFFA.”[17]

The rule addresses race, color, and national or ethnic origin only; it does not reach sex- or gender-based criteria. The proposal also expressly permits “select[ion] of students on the basis of religious affiliation or membership,” so long as the criterion is “based solely on religion and not on shared ancestry or ethnic characteristics.”[18]

Although there is some uncertainty as to how the IRS would identify non-compliance, as discussed below, a decision by the IRS to revoke the tax-exempt status of a school that maintains a disqualifying policy generally would be effective as of the first day of the taxable year in which the school falls out of compliance with the new rules.[19] In any later dispute with the IRS, the school would generally bear the burden of establishing that it qualifies as tax-exempt.[20] If the IRS proceeds through formal revocation of tax-exempt status, that process traditionally would follow IRS examination and administrative review, followed by judicial review—typically a multi-year path.[21]

Legal Vulnerabilities, Open Questions, and Anticipated Challenges

The proposed regulations create legal uncertainties that will play out in the comment process and, likely, in any litigation challenging the rule.

First, plaintiffs are likely to challenge whether the “fundamental public policy” test under the “charitable” prong of section 501(c)(3) can be applied to exclude schools that employ narrow race-conscious efforts to expand opportunity against the backdrop of general nondiscrimination policies. Bob Jones approved that conclusion for schools that had institutional policies to exclude or segregate students on the basis of race. Whether the same standard also condemns the conduct at issue in the proposed rule is an open question. After Loper Bright, courts will decide those questions without deference to Treasury’s interpretation.[22]

Second, the proposed rule does not provide clarity on how it will be implemented. It does not define “discrimination,” say whether the government must prove intentional discrimination, or address whether race-conscious conduct by one unit of an otherwise compliant institution could cost the entire institution its tax-exempt status. And it does not explain what a “school-supported program” is, as distinct from a “school-administered” one.

Third, the proposed rule does not explain when or how Treasury will assess compliance. It also does not reconcile the new standard with the IRS’s prior enforcement statement that it is not positioned to determine illegality under laws other than the Code, and that revocation for illegal activity generally requires a prior judicial determination of illegality, instead sidestepping the concern by treating the legality of a policy as irrelevant, which leaves the IRS to decide for itself whether a policy “discriminates.”[23] The New York Times reports that IRS officials have separately discussed a faster revocation process for nonprofits, though that change does not appear in this proposed rule.[24]

Fourth, plaintiffs may challenge the rule on the basis that the IRS has not justified its departure from longstanding agency guidance. Since 1975, the IRS has assured schools that race-conscious aid programs do not jeopardize exemption. An agency that reverses a longstanding position must acknowledge and justify the change in course, including by addressing serious reliance interests.[25] The preamble acknowledges the change, and its Special Analyses estimate certain compliance costs. Courts will assess whether the agency’s treatment in any final rule is adequate, particularly given the endowed funds and programs schools built on the guidance in Rev. Proc. 75-50.

Considerations for Schools and Donors

Covered schools will likely need to make compliance decisions before legal challenges to any final rule resolve. Treasury said that it expects to finalize the regulations before May 31, 2027, and the rule would apply to taxable years beginning after that date. For a school with a July 1 fiscal year, the first affected year begins July 1, 2027. For a calendar-year school, it begins January 1, 2028. While legal challenges are likely to follow promptly after finalization, and courts may or may not stay the rule during litigation, schools likely need to set admissions offers and aid packages for the 2027–2028 academic year before that uncertainty resolves.

Schools that have not already done so might consider assessing every policy, program, or fund that arguably considers race, color, or national or ethnic origin—across admissions, scholarships and loans, athletics, DEI programming, and third-party partnerships. Schools might also consider reviewing donor-restricted funds, scholarships, and loans in particular, given that review and modification of these instruments can be time-consuming and might require obtaining donor consent or court approval.

Gibson Dunn lawyers are closely monitoring these developments and are available to discuss the implications for your institution, prepare comments to the agency, and advise on compliance planning.

[1] Racial Nondiscrimination in Private Schools, 91 Fed. Reg. 56,811 (Sept. 4, 2026), https://www.federalregister.gov/d/2026-18127.

[2] Press Release, U.S. Dep’t of the Treasury (Sept. 3, 2026), https://home.treasury.gov/news/press-releases/sb0621/; IRS News Release IR-2026-103 (Sept. 3, 2026), https://www.irs.gov/newsroom/treasury-irs-move-to-end-tax-exempt-status-for-discriminatory-practices-in-private-schools.

[3] State and local tax exemptions frequently depend on federal section 501(c)(3) status.

[4] 91 Fed. Reg. at 56,811.

[5]26 U.S.C. §§ 501(a), 501(c)(3), 170(b)(1)(A)(ii), 170(c)(2); 26 C.F.R. (“Treas. Reg.”) § 1.501(c)(3)-1(d)(2)..

[6] Bob Jones Univ. v. United States, 461 U.S. 574, 586 (1983).

[7] Green v. Connally, 330 F. Supp. 1150, 1163 (D.D.C. 1971), aff’d mem. sub nom. Coit v. Green, 404 U.S. 997 (1971).

[8] Bob Jones, 461 U.S. at 593; see also id. at 595–96 (“[H]owever sincere the rationale may be, racial discrimination in education is contrary to public policy.”).

[9] Rev. Rul. 71-447, 1971-2 C.B. 230; Rev. Proc. 75-50, 1975-2 C.B. 587, modified by Rev. Proc. 2019-22, 2019-22 I.R.B. 1260.

[10] Rev. Proc. 75-50, §§ 3.02, 4.05.

[11] Students for Fair Admissions, Inc. v. President & Fellows of Harvard Coll., 600 U.S. 181, 230 (2023) (SFFA).

[12] Prop. Treas. Reg. § 1.501(c)(3)-2(c); 91 Fed. Reg. at 56,819. The term includes primary, secondary, preparatory, or high schools, and colleges and universities. Treas. Reg. § 1.170A-9(c)(1).

[13] 91 Fed. Reg. at 56,816, Special Analyses § I.D. Affected Entities and Taxpayers.

[14] 91 Fed. Reg. at 56,815, Explanation of Provisions.

[15] Rev. Proc. 75-50 §§ 3.02, 4.05; 91 Fed. Reg. at 56,818 (Effect on Other Documents).

[16] 91 Fed. Reg. at 56,815, Explanation of Provisions; id. at 56,817, Special Analyses § I.E.2 Economic Effects of the Proposed Regulations – Changes in Recipient Population; Treasury Press Release, supra note 2.

[17] 91 Fed. Reg. at 56,817 & n.7, Special Analyses § I.E Economic Effects of the Proposed Regulations.

[18] 91 Fed. Reg. at 56,815, Explanation of Provisions.

[19] Prop. Treas. Reg. § 1.501(c)(3)-2(a); 91 Fed. Reg. at 56,819 (a private school that fails the nondiscrimination requirement “is not an organization described in section 501(c)(3) with respect to any taxable year” to which the rule applies); 26 U.S.C. § 7805(b); Rev. Proc. 2026-5, 2026-1 I.R.B. 258, §§ 11.02(4), 12.01(4), 12.03(1); IRM 4.70.14.2.1.3.1.13.8(D) (November 24, 2023).

[20] Prop. Treas. Reg. § 1.501(c)(3)-2(a); 91 Fed. Reg. at 56,819. Donors are on somewhat different footing. They generally may rely on a school’s listing in the IRS’s public database of exempt organizations (Tax Exempt Organization Search) until the IRS publicly announces a revocation, and even after an IRS announcement, a limited amount of an individual donor’s contributions (up to $1,000 in the aggregate) generally remains deductible while the school pursues a timely court challenge. Rev. Proc. 2018-32, 2018-23 I.R.B. 739, §§ 4.01, 9.02; 26 U.S.C. § 7428(c). The proposed rule does not address Rev. Proc. 2018-32 and does not state that Rev. Proc. 2018-32 is modified in any way.

[21] 26 U.S.C. § 7428(a)(1)(A), (b)(2)–(3); Rev. Proc. 2026-5, 2026-1 I.R.B. 258, §§ 9, 10, 12; Treas. Reg. § 601.201(n)(6).

[22] Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024).

[23] IRS Gen. Couns. Mem. 37111 (May 4, 1977), as quoted and discussed in IRS, Illegality and Public Policy Considerations, Exempt Organizations CPE Text FY 1994 at 11, https://www.irs.gov/pub/irs-tege/eotopicl94.pdf.

[24] Andrew Duehren and Michael C. Bender, Trump Moves to Strip Tax Exemption From Schools That Aid Minority Students, N.Y. Times (Sept. 3, 2026), https://www.nytimes.com/2026/09/03/business/economy/trump-irs-college-nonprofits.html. The Proposed Regulations contain no changes to examination or revocation procedures.

[25] FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009); Dep’t of Homeland Sec. v. Regents of the Univ. of Cal., 591 U.S. 1, 30 (2020).

The following Gibson Dunn lawyers prepared this update: Jason C. Schwartz, Stuart F. Delery, David P. Burns, Michael Q. Cannon, Cynthia Chen McTernan, Susan M. Pelletier, Kareem W. Ramadan, Heather Skrabak, Letian Wang, and Abram Dorrough.

For more information about Gibson Dunn’s work with colleges, universities, and other educational institutions, please visit our Higher Education Industry Group page, or contact the Gibson Dunn lawyer with whom you usually work, any leader or member of the firm’s Higher Education Industry Group, or the authors:

Jason C. Schwartz – Washington, D.C. (+1 202.955.8242, jschwartz@gibsondunn.com)

Stuart F. Delery – Washington, D.C. (+1 202.955.8515, sdelery@gibsondunn.com)

David P. Burns – Washington, D.C. (+1 202.887.3786, dburns@gibsondunn.com)

Michael Q. Cannon – Dallas (+1 214-698-3232, mcannon@gibsondunn.com)

Cynthia Chen McTernan – Los Angeles (+1 213.229.7633, cmcternan@gibsondunn.com )

Susan M. Pelletier – Washington, D.C. (+1 202-887-3541, spelletier@gibsondunn.com)

“Secondary” covers a multitude of transactions in relation to real estate assets. It encompasses everything from a simple fund-interest sale to the wholesale reconstruction of a fund or joint venture. This update provides a short guide to the forms and the key legal considerations with respect to them.

Whilst real estate markets have been slow to rebound, the secondary market has become an increasingly important release valve. Redemptions have been throttled, closed-end funds are running past their wind-down dates, and reported NAVs have lagged the fall in underlying values – sponsors have been able to recapitalise, rather than sell into a soft market, and give their investors liquidity.

Secondaries have quietly become one of the fastest-evolving parts of the real estate sector. Real estate secondary volume reached a record $20.3 billion in 2025, up 39% on the previous year, with sponsor-led transactions accounting for $14.5 billion of it – 72% of the market, and 60% up year on year.[1] Set against the more than $2 trillion of net asset value held in closed-end real estate funds and in non-fund vehicles such as joint ventures and co-investment vehicles, there is still considerable room for further growth.

What really sets the real estate sector apart is the breadth. So much of it is held outside traditional funds – in joint ventures, club deals, separate accounts and other operating platforms – and therefore the range of what can trade on the secondary market is vast. “Secondary” now covers everything from the transfer of a single fund interest to the wholesale reconstruction of a fund or joint venture, and each form asks something different of the lawyers who execute it.

The Traditional Fund Secondary – Now at Portfolio Scale

What has changed in relation to the classic secondary, a straight sale of a fund interest from one investor to another, is the scale. Large institutions – pension plans, insurers and sovereign funds – now sell down whole tranches of fund positions in single negotiated portfolio trades to rebalance over-allocated books, often at material discounts, and dedicated capital has grown up to absorb them.

The key legal workstreams are structuring, pragmatic and targeted diligence, coordinating the transfer mechanics with sponsors and understanding the tax profile of a large number of fund interests. Gibson Dunn’s Investment Funds practice has advised on some of the most significant of these portfolio trades.

The Sponsor-Led Recapitalisation: Rebuilding Around the Assets

Here the sponsor drives the deal: a recapitalisation of current fund buys out interests at a set price so that investors who want out can exit while the sponsor keeps hold of the real estate; a continuation fund goes further, moving one (or more) assets into a new, longer-dated vehicle on recut terms, with existing investors choosing to cash out or roll.

Like the operational real estate deals in our previous note, a sponsor-led recapitalisation or continuation vehicle is not one transaction but potentially several at once.

The legal difficulty is that these strands pull against each other: the exit or transfer price shapes the entry economics, the control conceded to a new anchor or lead investor shapes the sponsor’s future flexibility, and the new fund terms driven by incoming investors may challenge whether the outgoing investors consent. In our experience, who the incoming investor is really matters: a secondaries sponsor tends to run a lighter-touch, portfolio-priced process; an institutional or sovereign investor may underwrite it more like a direct real estate acquisition – deeper diligence, more protections, a potentially longer road to closing. Identifying that “buyer” early, and structuring the process accordingly, is critical.

The Direct Secondary: Trading Joint Ventures and Platforms

Increasingly the interest is not a fund interest at all, but a stake in a joint venture or club – frequently with additional capital in order to complete the business plan or fund adjacent projects. This is where the real estate M&A component of the secondary transaction is likely to be the most involved and where a fully integrated team earns its place translating the asset-level considerations into the purchase documentation and governing documents of the joint venture or club. These transactions demands a team that is structured to seamlessly advise on fund formation, joint ventures, M&A, financing, tax and regulatory matters, an integrated approach that mirrors how Gibson Dunn structures its offering to its global clients.

The Hybrid: Growth Capital and the Operating Platform

At the most highly structured end, the line between secondaries and operational real estate deals can blur: the incoming investor buys into existing portfolio assets, provides additional growth capital and, in return, participates in and shares the growth of the platform. We see this most frequently where the asset class has a significant operating dimension – including the living and hospitality sectors – where the incoming investor wants to buy into the platform itself, not just the assets, as part of the deal.

Execution: Positioning for Success

The price only means something if you understand the asset(s). A discount to reported NAV is meaningless without a real grasp of the underlying real estate; the adviser’s job is to take a pragmatic and proportionate approach to diligence in order to surface any material asset-level risks clearly to allow the client to price and protect for them.

How you can manage conflicts will impact the process and timeline. Where the sponsor sits on both sides of the deal, investor and/or advisory committee consents must be front of mind from the outset. These transactions are subject to increasing regulatory scrutiny on both sides of the Atlantic, particularly as regards setting the price at which its investors sell or roll.

Match the scope to the buyer. A secondaries sponsor may accept lighter touch due diligence and a more passive interest/controls; whereas an institutional or sovereign investor is more likely to want to understand the asset(s) that underpin the interest and be more involved in governance – and that choice sets the timetable.

An Integrated Approach

The link to our previous note is deliberate. As “secondary” has widened, a number of different disciplines have been folded into a single transaction. Executing well means running all of it at once, from fund to underlying asset(s) – this is where the breadth of the wider firm tells. Members of our London team have advised across this spectrum – from GP-led portfolio sales to platform recapitalisations – and are used to working across portfolios of assets spanning multiple jurisdictions. Alongside them, Gibson Dunn’s real estate and investment funds teams in North America, the Middle East and Asia-Pacific bring deep local knowledge and, working as one, an understanding of what matters to the different pools of capital that invest in these deals. Our real estate finance practice adds a further dimension, with extensive experience of the full range of financing solutions these transactions call for – an integrated offering, from the investment vehicle through the underlying asset(s) to the debt that supports it.

[1] https://www.ares.com/us/news-and-insights/real-estate-secondary-market-volume-hits-record-20 billion-2025.

The following Gibson Dunn lawyers prepared this update: Chris Slack, Angus Lennox, Sean Tierney, and Hayden Cameron.

Gibson Dunn advises across the full range of real estate secondary transactions. To discuss how best to navigate these transactions, or to explore how we can support your strategy, please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Real Estate practice group, or the authors:

Christopher Slack – London
(+44 20 7071 4251, cslack@gibsondunn.com)

Angus Lennox – London
(+44 20 7071 4208, alennox@gibsondunn.com)

Sean Tierney – London/Los Angeles
(+44 20 7071 4236, stierney@gibsondunn.com)

Hayden Cameron – Abu Dhabi/London
(+971 2 234 2638 / +44 20 7071 4268, hcameron@gibsondunn.com)

New proposal would replace the SEC’s current guidance-based paper-first framework with a rules-based opt-out e-delivery regime.

On July 16, 2026, the Securities and Exchange Commission (the SEC) proposed Regulation E-Delivery (Reg E-Delivery), a new rule that, if adopted, would permit default electronic delivery (e-delivery) of most required disclosures to recipients who have provided an electronic address without the recipient’s affirmative consent. Reg E-Delivery would supersede the current decades-old guidance for e-delivery, under which paper delivery serves as the default method unless investors affirmatively “opt-in” to e-delivery. However, reliance on Reg E-Delivery would be voluntary, not mandatory. Public companies could continue obtaining affirmative consents and default to hardcopy delivery.

The SEC also proposed amendments to the existing rules regarding dissemination of proxy and tender offer materials, including the “notice and access” regime under Rule 14a-16, which amendments are likely to impact the timing and delivery costs for proxy materials.

The Proposing Release is available here and a Fact Sheet is available here. The public comment period will remain open until September 21, 2026.

Background – “Covered Information” by “Covered Entities” to “Covered Recipients”

The proposed rules would replace the SEC’s current three-pronged e-delivery guidance – notice, access, and evidence of delivery – with a new default: “covered entities” may deliver “covered information” to “covered recipients” electronically, without first obtaining affirmative consent from recipients.

Covered Information

The proposed rules define covered information broadly as any information required to be delivered under the federal securities laws, subject to specific exceptions (such as Regulation Crowdfunding or Rule 15c2-11).

This broad definition covers, among other things:

proxy materials (both relating to annual and special shareholder meetings and business combinations) and information statements;
Section 10(a) prospectuses under Form S-8 pursuant to Rule 428;[1]
tender offer materials; and
reports to indenture security holders under the Trust Indenture Act.[2]

For prospectuses, Reg E-Delivery does not replace the existing “access equals delivery” framework under Rule 172, which already allows many issuers to satisfy prospectus delivery by filing the final prospectus on EDGAR. Rather, Reg E-Delivery supplements Rule 172, giving issuers an additional delivery option — including for offerings that fall outside Rule 172’s coverage, such as Form S-8 offerings to equity plan participants and former employees.

Covered Entities

Covered entities are defined as those that are required to deliver covered information to a covered recipient under the federal securities laws. This includes:

public companies,
broker-dealers,
investment advisers,
transfer agents,
dissidents in proxy fights, and
third-party bidders in a tender offer.

Covered Recipients

The proposed rules define covered recipients as current or prospective customers, clients, investors, security holders (including indenture security holders), counterparties, or similar recipients to whom a covered entity is required to deliver covered information.

Conditions and Methods of E-Delivery

A covered entity can rely on Reg E-Delivery where:

The covered recipient has provided (or accepted the use of) an electronic address.
The covered entity has provided clear and conspicuous disclosure that covered information will be sent to that address.
The covered recipient has not opted out of e-delivery.

Electronic addresses need to be provided to (or accepted for use with) a particular company for the particular purpose of receiving covered information. The proposed rules state that addresses received from affiliates or a third-party (including Non-Objecting Beneficial Owner (NOBO) lists) or collected for another purpose (such as a request for technical support) cannot be used for default e-delivery.

A public company’s own delivery obligation runs only to the record holders registered in the company’s books. For shares held in street name on behalf of beneficial owners, the intermediary broker, dealer, or bank is the “covered entity.” As such, the intermediary is responsible for delivery to the beneficial owner of shares, and the electronic address on file with that intermediary (and not with the company) is the one that matters. The benefit of Reg E-Delivery still flows to the company, however: issuers reimburse intermediaries for proxy distribution at rates set under NYSE Rule 451 and FINRA Rule 2251, and the reimbursement rate for e-delivery is a fraction of the paper rate. As a result, most of the cost savings from Reg E-Delivery will depend on how quickly intermediaries move their own accountholders to default e-delivery.

Reg E-Delivery allows for two methods of e-delivery:

Direct Delivery, where the information is included in the body of the electronic communication or as an attachment.
A Statement of Availability, which alerts the covered recipient that the covered information is available at a website set forth in the statement, and which would be the only method of delivery for covered information containing “personal financial information” (PFI).

As proposed, the direct delivery method can only be used when the covered information does not contain PFI. PFI is defined narrowly as information specific to a covered recipient’s personal financial matters, such as account numbers or the details of a specific securities transaction.

Importantly, PFI would not include control numbers used for proxy voting, meaning a complete set of proxy materials can be delivered directly to a covered recipient’s electronic address.

Changes to Proxy Solicitations and Tender Offers

The proposed rules also make several changes to the rules regarding proxy statements and tender offers to further promote e-delivery as the default for most investor communications.

Notice and Access Regime

The proposed rules amend Rule 14a-16 to provide two choices for delivery of proxy materials: electronic delivery pursuant to Reg E-Delivery (either direct delivery or a statement of availability), or physical delivery of a full set of proxy materials. Public companies would no longer be permitted to mail a paper Notice of Internet Availability (NOIA) in lieu of a full set of printed proxy materials. For issuers currently using notice and access, the proposed rules would increase printing and mailing costs to the extent covered recipients have not provided electronic addresses or have opted out of e-delivery, because those recipients would have to receive a full set of printed materials. Additionally, if issuers elect to e-deliver their proxy materials via either direct delivery or a statement of availability, a copy of that communication would still need to be filed on EDGAR as additional soliciting material no later than the date of its first use.

Eliminating the requirement for a paper NOIA also would eliminate the 40-day notice and access deadline for delivery, meaning that the timing for delivery of proxy materials defaults to the date delivery is otherwise required. For a routine annual shareholder meeting, the deadline will be set by the corporate law of the state of incorporation and the company’s charter and bylaws.

The proposed rules also eliminate the current prohibition on the use of notice and access for business combination transactions. The proposed rules would allow public companies to choose between a permissible method of Reg E-Delivery or full set paper delivery of materials in connection with a business combination transaction.

Proxy Contests and Third-Party Tender Offers

Under the proposed rules, shareholder lists furnished under Rule 14a-7 would have to include record holders’ electronic addresses where available. The same applies to NOBO lists under Rule 14a-13 and to lists and security position listings under Rule 14d-5(c) in third-party tender offers.

Under proposed notes to Rules 14a-7(b)(2) and 14d-5(c), an issuer may not furnish a partial list. If the issuer cannot or will not provide complete information (for example, because an email address is subject to privacy restrictions or a contractual prohibition), it must distribute the requesting party’s materials itself. Public companies should check their contracts with transfer agents or any shareholder agreements to determine whether electronic addresses may be shared with a third party.

Notably, the proposed rules do not require symmetric treatment of the issuer’s and the third party’s materials. The proposing release indicates that the SEC would expect a third party’s materials to be provided electronically to those shareholders that already receive the issuer’s materials electronically, but the proposed rules would not require that outcome — leaving open the possibility that an issuer could e-deliver its own materials while continuing to mail paper copies of a dissident’s or bidder’s materials. The SEC has requested comment on this point.

However, it remains to be seen whether Reg E-Delivery will change proxy contest dynamics in any fundamental way. The proposing release notes that notice and access is rarely used in proxy contests given historically lower response rates, and the parties in a contest may continue to choose to pay for full paper delivery to maximize retail shareholder turnout. While e-delivery would be available to dissidents in a proxy contest and bidders in third-party tender offers, given the one-time nature of those events, the proposing release suggests dissidents and bidders are unlikely to develop their own e-delivery infrastructure. The proposing release further notes that while the proposed rules are designed to allow shareholders to receive proxy materials and tender offer materials in the format they prefer, nothing in the proposed rules would prevent an issuer or third party from supplementing the electronic delivery of proxy materials or tender offer materials with delivery of those materials in paper. Similarly, the proposed rules would allow parties to deliver full sets in paper with supplemental materials e-delivered (directly or through intermediaries).

Timing and Transition Period

We anticipate a final rule in mid-to-late 2027, to be effective 60 days after publication. The proposed rules provide for a two-year interim transition period, during which public companies can rely on either the current opt-in guidance or the final rule, but not both at the same time.

Public companies that wish to transition existing recipients of paper materials to e-delivery would be required to mail up to two paper notices:

An initial notice delivered at least 180 days before the transition to default e-delivery; and
A follow-up notice delivered at least 30 days before the transition; only necessary if the recipient does not confirm an electronic address after the first notice.

Therefore, the earliest proxy season to be materially affected is likely the 2029 season, although holders who have consented to e-delivery under the current guidance, or who respond to the initial transition notice, can be moved to e-delivery sooner.

Key Takeaways and Action Items for Public Companies

Although some opposition is expected and commenters will likely provide input that could shape the contours of the final rule, Reg E-Delivery is likely to be implemented in some form. Although certain details of the proposed rules have yet to be finalized, public companies can begin preparing for a new opt-out e-delivery regime and keep in mind the following points:

Affirmative Consent is No Longer Required, But New Obligations Replace It. Issuers and intermediaries that currently hold existing broad consents for e-delivery will still face net new obligations, such as website standards, written policies and procedures, and prescribed content for each delivery.

Collect Electronic Addresses Now and Document Their Source. A company’s delivery obligations run only to its record holders, so the population it can move to default e-delivery on its own is limited to that group. Because record holder email addresses are almost always collected by the transfer agent rather than by the company, public companies should confirm with their transfer agent how addresses are captured and recorded.[3] An electronic address the company obtains from a purchased list, an affiliate, or a NOBO list will not support default e-delivery; however, the company may still use those addresses for voluntary shareholder communications. Confirm whether there would be any restrictions on your ability to share the electronic addresses on your shareholder list with third parties, as this could impact whether you will need to deliver a third party’s materials in a Rule 14a-7 scenario.

Inventory Each Delivery Obligation and Identify Who Will Perform It. Start with your proxy service provider, who will communicate with your street name account holders, and ask about their implementation plan. If relevant, also begin conversations with your transfer agent and your equity plan administrators. Note that e-delivery to street name account holders will depend on your intermediaries’ internal timelines for adopting default e-delivery.

Review Company-Hosted Website for Covered Information Against Proposed Rules. Proposed Section 303.103 of Reg E-Delivery provides a list of rules and requirements for a website that hosts covered information. An intermediary’s compliance with Reg E-Delivery is dependent on the company’s website if they refer shareholders there instead of hosting their own site.

Develop and Adopt Failed-Delivery Policies and Procedures. Reg E-Delivery requires monitoring of actual delivery failures, not the rate at which information was opened or clicked through.

Review State Law and the Notice Provisions of Your Governing Documents. Once the 40-day deadline for a physical NOIA is eliminated, the charter and bylaws (as well as the state law default) will control the timing of delivery of proxy materials.

Consider Commenting. The SEC is seeking comments on a variety of aspects of the proposed rules. Topics that may need to be addressed in any version of the final rules, and that public companies may wish to consider and comment on, include:

Whether electronic addresses collected by an issuer’s transfer agent or proxy solicitor, or a NOBO list, could be used for default e-delivery;
The retention of the NOIA process (and related 40-day deadline) as an alternative for proxy statements;
The extent of an issuer’s obligation to identify and remediate e-delivery failures (e.g., bounce backs);
The definition of PFI, including whether it should exclude addresses and general brokerage information; and
The creation of a hybrid solution for shareholder lists under Rule 14a-7 so issuers could agree to forward electronic communications from third parties while providing requestors with mailing addresses.

[1] Rule 428 under the Securities Act requires delivery of the Section 10(a) prospectus to participants in a plan registered on Form S-8 as well as copies of all reports, proxy statements and other communications distributed to company security holders generally, provided that such material is sent or delivered no later than the time it is sent to security holders. Reg E-Delivery would replace the 1995 and 1996 guidance companies currently rely on to satisfy that obligation electronically, under which consent may be presumed for employees who routinely use company email but former employees and other service providers must affirmatively consent.

[2] Importantly, Forms 10-K, 10-Q and 8-K, along with Schedules 13D and 13G and Section 16 reports, are not covered by Regulation E-Delivery, as there is no delivery obligation for those filings.

[3] Whether an electronic address collected by a transfer agent supports default e-delivery by the issuer is unclear. The proposing release does not address transfer agents in this context, and the proposed rule text does not specify to whom an electronic address must be provided; proposed § 303.102(a) requires only an address “that the covered recipient provides (or accepts to use) to receive covered information.” The proposing release states elsewhere that an address a covered entity receives from an affiliate or a third party generally would not satisfy this requirement, but that discussion concerns entities with independent relationships to the recipient rather than an agent acting on behalf of the covered entity. Two aspects of the proposed rules support treating transfer agent-collected addresses as having been provided to the issuer for purposes of default e-delivery: the proposing release confirms that where a covered entity uses an agent to deliver on its behalf, the covered entity remains responsible for compliance; and the definition of “covered recipient receiving paper” turns on whether the covered entity “has an electronic address,” without regard to how it was obtained. The SEC’s request for comment on affiliate and third-party addresses does not identify transfer agents among the scenarios on which it seeks input.

The following Gibson Dunn lawyers prepared this update: Mellissa Campbell Duru, Elizabeth A. Ising, Brian J. Lane, Julia Lapitskaya, Ronald O. Mueller, Michael A. Titera, Geoffrey E. Walter, Lori Zyskowski, and Gary R. DePalo.

Please view additional information on Gibson Dunn’s Securities Regulation & Corporate Governance Monitor.

Gibson Dunn’s lawyers are available to assist with any questions you may have regarding these developments. To learn more about these issues, please contact the Gibson Dunn lawyer with whom you usually work, or any of the following lawyers in the firm’s Securities Regulation & Corporate Governance practice group:

Aaron Briggs – San Francisco (+1 415.393.8297, abriggs@gibsondunn.com)
Mellissa Campbell Duru – Washington, D.C. (+1 202.955.8204, mduru@gibsondunn.com)
Elizabeth Ising – Washington, D.C. (+1 202.955.8287, eising@gibsondunn.com)
Thomas J. Kim – Washington, D.C. (+1 202.887.3550, tkim@gibsondunn.com)
Brian J. Lane – Washington, D.C. (+1 202.887.3646, blane@gibsondunn.com)
Julia Lapitskaya – New York (+1 212.351.2354, jlapitskaya@gibsondunn.com)
Ronald O. Mueller – Washington, D.C. (+1 202.955.8671, rmueller@gibsondunn.com)
Michael A. Titera – Orange County (+1 949.451.4365, mtitera@gibsondunn.com)
Geoffrey E. Walter – Washington, D.C. (+1 202.887.3749, gwalter@gibsondunn.com)
Lori Zyskowski – New York (+1 212.351.2309, lzyskowski@gibsondunn.com)

This edition of Gibson Dunn’s Federal Circuit Update for July 2026 summarizes the current status of petitions pending before the Supreme Court, Federal Circuit news, and recent Federal Circuit decisions concerning means-plus-function claims under 35 U.S.C. § 112(f), enablement, and the scope of the Federal Circuit’s mandate on remand.

Federal Circuit News

Noteworthy Petitions for a Writ of Certiorari:

There were a couple of potentially impactful petitions filed before the Supreme Court since our last update:

Federal Express Corp. v. Qualcomm, Inc. (US No. 26-170): The question presented is “Does 35 U.S.C. § 314(d) bar judicial review of the Patent Office’s refusal to determine whether a petition identifies all real parties in interest when § 312(a)(2) authorizes the Office to consider petitions ‘only if’ they identify ‘all’ such parties?” After the respondents waived their right to respond, the Court requested a response. The response brief is due September 28, 2026.
Kahoot! AS v. Intersteller Inc. (US No. 26-198): The questions presented are: “Whether the PTO lacks statutory authority to deny inter partes review institution based on ‘settled expectations’ premised on a patent’s age where Congress prescribed express timing limits for inter partes review based on a patent’s minimum age (which is tied to the expiration of the statutory period for seeking post-grant review, a separate type of patent validity challenge) but imposed no maximum patent age bar.” 2. “Whether 35 U.S.C. § 314(d) bars judicial review, even by way of mandamus, of whether the PTO exceeded its statutory authority when denying inter partes review institution on grounds that are contrary to the statute.” The response brief is due September 16, 2026.

We provide an update below of the petitions pending before the Supreme Court, which were summarized in our June 2026 update:

In Intel Corp. v. Squires (US No. 26-73), the response brief is due September 16, 2026. Seven amicus briefs have been filed.

In Sunoco Partners Marketing & Terminals L.P. v. Powder Springs Logistics, LLC (US No. 25-1387), the respondents waived their right to respond. The Court will consider this petition at its September 28, 2026 conference.

In Google LLC v. VirtaMove, Corp. (US No. 25-1230), after the respondent waived its right to file a response, the Court requested a response. VirtaMove filed its response brief on July 13, 2026. The USPTO requested an extension and its response brief is due September 11, 2026. Seven amicus briefs have been filed.

Key Case Summaries (July 2026)

Wyeth LLC v. AstraZeneca Pharmaceuticals LP, et al., No. 24-2325 (Fed. Cir. July 9, 2026): Wyeth sued AstraZeneca alleging induced infringement of its patent directed to methods of cancer treatment using irreversible inhibitors to treat a certain type of non-small cell lung cancer (NSCLC), which is associated with overactivity of an epidermal growth factor receptor (EGFR) that regulates cell growth and division. The claims recite “administering daily to the patient” a “unit dosage of an irreversible epidermal growth factor receptor (EGFR).” The specification explained that the claimed “unit dosage” refers to a predetermined quantity of active material calculated to produce “the desired therapeutic effect” in a patient, which depends on various characteristics of the subject to be treated. Thus, due to these variable factors, the specification notes that the precise amount of active ingredient depends “on the judgment of the practitioner and are peculiar to each individual.” The case proceeded to trial, where a jury concluded that the asserted claims were not invalid and infringed. AstraZeneca moved for judgment as a matter of law (JMOL) that the claims were invalid for lack of enablement, because the patent failed to teach the proper unit dosage without “a tremendous amount of work and experimentation,” and the district court granted the motion.

The Federal Circuit (Lourie, J., joined by Linn and Hughes, JJ.) affirmed. The Court reasoned that “to enable the claims, the specification must provide guidance to allow a skilled artisan to determine a daily unit dosage calculated to produce a therapeutic effect in a patient across the full scope of the claimed compounds without undue experimentation.” However, the specification left the calculation of the claimed “unit dosage” entirely to the knowledge of the skilled artisan. While the specification recited dosage ranges, it provided no further guidance on “how a skilled artisan would select among them for a given compound, or how they related to the claimed dosage unit to produce a therapeutic effect in a patient.” In fact, some of the doses in the disclosed ranges were shown to be toxic. The Court therefore concluded that the district court did not err in granting JMOL of invalidity due to lack of enablement.

Intellectual Pixels Ltd. v. Sony Interactive Entertainment LLC, No. 24-2174 (Fed. Cir. July 10, 2026): Sony filed petitions for inter partes review (IPR) of Intellectual Pixels (IPL)’s patents directed to methods for generating digital images. Prior to the date of the patent, many user devices struggled to render complex images on their own, and therefore, the patent purported to address this by outsourcing aspects of the image processing to external servers, which decreased the computational load on the user device. The claims recite (1) generating an “updated image” and (2) “compressing the at least one updated image and transmitting the compressed updated image to the client device.” In the Board’s first final written decision, it concluded that the challenged claims were not unpatentable over the prior art reference, Wiltshire, because Wiltshire only disclosed external servers selecting images and not generating images.

In the first appeal, the Court vacated that decision and remanded, concluding that the decision was not supported by substantial evidence, because Wiltshire disclosed operating its system in connection with the video game Doom, which required generating a new image. On remand, the Board recognized that Wiltshire in conjunction with a game like Doom, disclosed generating a new image, which met the generating limitation. The Board further found that these updated images were transmitted to the client computers as compressed MPEG streams, which met the compressing limitation. Thus, the Board concluded that the prior art rendered obvious the claim’s generating and compressing limitations. IPL appealed, arguing that the Board’s decision violated the Court’s mandate in the first appeal.

The Federal Circuit (Dyk, J., joined by Stoll and Stark, JJ.) affirmed. The Court explained that the mandate rule “provides that issues actually decided on appeal are foreclosed from further consideration.” But issues that were undecided nor necessary to the disposition of the appeal are open on remand. Sony argued that the Board found in the first decision that Wilshire was silent as to the compressing limitation, and therefore, did not render obvious the claim. Because the Board’s obviousness decision had been based on the generating limitation in the first decision, any findings of fact as to the compressing limitation were not addressed in the first appeal. Moreover, the Board’s findings with respect to the compressing limitation was implicitly rejected in the first appeal when the Court determined that Wilshire in the context of Doom taught the generating limitation. The Board therefore correctly reached the logical conclusion that its prior finding that Wiltshire was silent as to the compressing limitation had been rejected. Thus, the Board did not err in revisiting the compressing limitation on remand.

The following Gibson Dunn lawyers prepared this update: Blaine Evanson, Jaysen Chung, Audrey Yang, and Evan Kratzer.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Federal Circuit. Please contact the Gibson Dunn lawyer with whom you usually work, any leader or member of the firm’s Appellate and Constitutional Law or Intellectual Property practice groups, or the following authors:

Blaine H. Evanson – Orange County (+1 949.451.3805, bevanson@gibsondunn.com)
Audrey Yang – Dallas (+1 214.698.3215, ayang@gibsondunn.com)

Appellate and Constitutional Law:
Thomas H. Dupree Jr. – Washington, D.C. (+1 202.955.8547, tdupree@gibsondunn.com)
Allyson N. Ho – Dallas (+1 214.698.3233, aho@gibsondunn.com)
Julian W. Poon – Los Angeles (+ 213.229.7758, jpoon@gibsondunn.com)
Jeffrey B. Wall – Washington, D.C. (+1 202.955.8533,jwall@gibsondunn.com)

Intellectual Property:
Kate Dominguez – New York (+1 212.351.2338, kdominguez@gibsondunn.com)
Josh Krevitt – New York (+1 212.351.4000, jkrevitt@gibsondunn.com)
Jane M. Love, Ph.D. – New York (+1 212.351.3922, jlove@gibsondunn.com)

This update provides an overview of the Monetary Authority of Singapore’s consultation on draft legislative amendments to the Payment Services Act 2019 to implement Singapore’s stablecoin framework, and highlights how the proposals differ from the positions finalised by the regulator in 2023 – including a newfound openness to multi-jurisdictional issuance models and the recognition of foreign-issued stablecoins.

On 1 September 2026, the Monetary Authority of Singapore (MAS) published a consultation paper setting out draft legislative amendments to the Payment Services Act 2019 (PS Act) to implement its regulatory framework for single-currency stablecoins (SCS) – known as the MAS-SCS framework – together with a set of new policy proposals that respond to market and regulatory developments since the framework was finalised in 2023.[1] The consultation closes on 16 October 2026, and the MAS will consult separately on the accompanying subsidiary legislation at a later date.

1. A SIGNIFICANT AND LONG-AWAITED DEVELOPMENT

The publication of the draft legislation is a significant milestone in the development of Singapore’s digital-asset regulation. The MAS first consulted on its proposed regulatory approach for stablecoin-related activities in October 2022[2] and set out its finalised policy positions in a consultation response published in August 2023.[3] The legislative amendments needed to bring the framework into force have been keenly awaited by the industry since then, and had initially been expected in the fourth quarter of 2025.

The additional gestation time is telling: the MAS has evidently had to turn its mind to a number of complex threshold issues – most notably the cross-border questions of whether to accommodate stablecoins issued concurrently out of Singapore and foreign jurisdictions, and whether to recognise well-regulated foreign-issued stablecoins. On both questions, the MAS has now landed on considered proposals which move beyond (and in some respects reverse) its 2023 positions. These developments have unfolded against a fast-moving international backdrop, with the United States, the European Union, the United Kingdom, Hong Kong and others having enacted or substantially progressed their own stablecoin regimes since 2023 (see section 4 below).

The consultation package accordingly has two components: (a) draft legislative amendments to the PS Act[4] giving effect to the positions finalised in 2023; and (b) new policy proposals on which the MAS is consulting for the first time. The MAS has signalled that it expects to take a selective and risk-based approach to authorising stablecoin issuers and recognising foreign-issued stablecoins, anticipating that only a limited number of stablecoins will be authorised or recognised, with applications assessed holistically by reference to financial soundness, business viability and operational track record.[5]

2. THE FRAMEWORK AS LEGISLATED

The draft amendments carry the architecture finalised in 2023 into the PS Act, with some notable structural refinements:

Definitions and regulatory perimeter

The amendments introduce statutory definitions of “stablecoin” and “MAS-regulated stablecoin”. Stablecoins are expressly treated as a subset of digital payment tokens (DPTs) for the purposes of the PS Act (unless otherwise provided), and are expressly carved out of the definition of “e-money” – resolving a boundary question that has generated significant industry debate since fiat-pegged tokens first emerged. Stablecoins that are not MAS-regulated will remain lawful and will continue to be regulated as DPTs, with all intermediation activities subject to the existing DPT licensing regime.

A dedicated licence class

The draft legislation establishes a standalone “stablecoin issuance licence” as a new licence class under the PS Act, sitting alongside the existing money-changing, standard payment institution and major payment institution licences. This is a structural evolution from the 2023 Consultation Response, which had contemplated that issuers would hold a major payment institution licence covering a new “stablecoin issuance service”. Only holders of the new licence may hold themselves (or their stablecoins) out as “MAS-regulated”, with contraventions of the holding-out prohibitions attracting criminal penalties.[6] Issuance is defined to include incidental activities such as minting, putting stablecoins into circulation, managing the reserve assets and redeeming at par.

Core issuer obligations

The core requirements finalised in 2023 are carried over: reserve assets at least equal to the par value of stablecoins in circulation at all times (held in segregated trust accounts with permitted custodians, and subject to attestation and audit requirements which now appear on the face of the statute); redemption at par within MAS-prescribed timeframes; prudential requirements; white paper disclosure; and business restrictions that confine the licensee to its issuance business. Helpfully, the draft clarifies that a licensed issuer may provide DPT services in respect of its own MAS-regulated stablecoin (for example, transmission or custody) where incidental to its issuance business, without a separate DPT licence. Entities issuing non-MAS-regulated stablecoins out of Singapore will, by contrast, require a major payment institution licence as providers of DPT services.

3. WHAT HAS CHANGED SINCE 2023

Beyond legislating the finalised framework, the Consultation Paper proposes a substantial set of new policy positions. The most significant are as follows:

Multi-jurisdictional issuance is now on the table

In its 2023 Consultation Response, the MAS decided that multi-jurisdictional issuance (MJI) – the concurrent issuance of the same fungible stablecoin by affiliated issuers in different jurisdictions sharing a common reserve pool – would not be permitted under the framework, requiring issuers to issue solely out of Singapore.[7] The MAS has now reversed course, citing the considerable maturation of stablecoin regulation globally and the growing prevalence of MJI use cases. Under a proposed new section 100A of the PS Act, the MAS may exempt an MJI arrangement, on a case-by-case basis, from two requirements: (i) the requirement for every issuer of an MAS-regulated stablecoin to be incorporated in Singapore (thereby accommodating foreign co-issuers); and (ii) the requirement for the Singapore licensee itself to hold reserves at least equal to all stablecoins in circulation (thereby accommodating a reserve pool split across co-issuers).[8]

Exemptions will be conditioned on substantial safeguards, including: the foreign co-issuers being supervised under a regime the MAS deems substantively equivalent to the MAS-SCS framework (with weight given to bilateral supervisory cooperation arrangements); aggregate reserves across all issuing entities of at least 100% of global circulation at all times, with composition meeting the stricter of the applicable regimes; MAS-approved reserve rebalancing arrangements or stablecoin attribution models, supported by daily record-keeping and monthly reporting; comparable redemption fees and timelines across jurisdictions (to prevent redemption arbitrage and cross-border liquidity runs); and group-wide recovery and orderly wind-up planning.

Recognition of foreign-issued stablecoins

In a further new development, the MAS proposes a recognition regime – a new Part 2B of the PS Act – under which a limited number of stablecoins issued by foreign corporations may be recognised as “MAS-recognised stablecoins”.[9] Recognition will be available, on a case-by-case basis, where the issuer and its stablecoin are regulated under a foreign framework deemed substantively equivalent to the MAS-SCS framework and where supervisory cooperation and information-sharing arrangements are in place between the MAS and the home regulator. The MAS has framed this proposal by reference to cross-border wholesale use cases. It has also been careful to preserve a clear distinction between the “MAS-regulated” label (denoting direct MAS regulation and supervision) and the “MAS-recognised” label (denoting home-state regulation meeting baseline standards), so that the two statuses – and the concessions attaching to them – remain clearly differentiated for consumers.

Prohibition on paying interest

Issuers of MAS-regulated stablecoins will be prohibited from paying interest, returns or other benefits attributable (directly or indirectly) to the holding of the stablecoin.[10] The stated rationale is to demarcate stablecoins as payment instruments rather than investment or savings products, in line with international practice. Notably, the prohibition is directed at the issuer and is not intended to disturb revenue-sharing, distribution or other commercial arrangements between the issuer and third parties – a calibration that will be of interest to distributors and exchanges. The MAS is separately consulting on whether issuers should (like e-money issuers today) be restricted from on-lending customer monies or using such monies and the interest earned on them to materially finance their business – acknowledging, however, that reserve yield is the economic engine of most stablecoin issuance models.

Reserve composition, potential deposit floors and caps

The MAS is considering whether to require a minimum proportion of reserve assets to be held in cash or bank deposits, noting that the UK and EU require or will require minimum bank-deposit proportions of 5% to 30% for non-systemic stablecoins and 40% to 60% for systemic stablecoins.[11] It also seeks views on the relevance of caps on aggregate issuance or individual holdings – measures which have featured in other jurisdictions’ frameworks and which echo the stock and flow caps applicable to e-money under the PS Act.

Stress testing, recovery planning and resolution architecture

Issuers will be required to conduct stress testing at least quarterly (covering idiosyncratic and systemic shocks, with board-level review and results shared with the MAS), and the MAS proposes powers to impose additional capital, liquidity or reserve buffers where stress testing reveals critical vulnerabilities.[12] Issuers must also maintain board-approved recovery plans and orderly wind-down plans, reviewed and shared with the MAS at least annually, with the financial resources underpinning them independently verified. To give these requirements teeth, licensed issuers will be brought within the definition of “pertinent financial institutions” under the Financial Services and Markets Act 2022 (FSMA), although the MAS intends to apply only the recovery and orderly wind-up requirements to non-systemic issuers.

Consumer protection through the licence lifecycle

The MAS proposes e-money-style safeguarding obligations for customer monies received before stablecoins are delivered, and for redemption proceeds pending payment to holders – ringfencing consumer funds in an insolvency. At the exit end of the lifecycle, issuers whose licences are revoked, lapse or are surrendered would be prohibited from conducting any stablecoin issuance business (including of non-MAS-regulated stablecoins, and even if they subsequently obtain a DPT licence), with the MAS canvassing mandatory wind-down or winding-up as an alternative. Issuers would also be barred from disposing of reserve assets other than to meet redemptions until the MAS is satisfied that no redemption requests remain outstanding.

AML/CFT: trace, freeze and burn

Beyond the existing AML/CFT standards applicable to DPT service providers and banks (customer due diligence, travel rule and screening), the MAS proposes to require issuers to maintain the technical capability to trace, freeze and/or burn their stablecoins where these are used for illicit activity, with detailed requirements to follow by Notice.[13] The MAS is also seeking feedback on more far-reaching measures observed in other jurisdictions – verified identification of every holder, restrictions on unhosted wallets, and ongoing on-chain monitoring of stablecoins in circulation – although these remain exploratory at this stage.

A designation regime for systemic stablecoins

A new Part 2A of the PS Act will empower the MAS to designate a stablecoin as a “Designated Systemic Stablecoin” – regardless of whether it is issued in or outside Singapore, and regardless of whether it is regulated under the MAS-SCS framework.[14] This complements the otherwise opt-in character of the framework and marks an evolution from the 2022/2023 proposals, which had contemplated designating systemic stablecoin arrangements as payment systems: the designation power now attaches to the stablecoin itself. Issuers of designated stablecoins must comply with requirements aligned with the MAS-SCS framework, supplemented by enhanced requirements in line with Financial Stability Board recommendations, including corporate governance, recovery and resolution planning; the MAS’ emergency powers will be extended to such issuers, which will also be brought within the FSMA’s definition of “financial institution”.

Two features deserve particular attention. First, the supporting information-gathering powers are broad: all issuers of tokens that purport to maintain a value relative to a reference asset (including algorithmic stablecoins, and whether or not marketed as “stablecoins”), and licensed intermediaries, may be required to report issuance, redemption and circulation data to the MAS. Second, where a designated systemic stablecoin fails to meet the MAS’s requirements – including one issued overseas – the MAS may direct licensed DPT service providers in Singapore to cease offering it, delist it and its trading pairs, and prohibit further accumulation by customers. Foreign issuers with meaningful Singapore circulation should take note.

Banks and merchant banks

In a change from the 2023 position (under which banks could issue reserve-backed SCS directly, subject to the framework minus its prudential requirements), banks and merchant banks wishing to issue MAS-regulated stablecoins will now be required to do so through a separate non-bank legal entity licensed under the MAS-SCS framework – a structure intended to contain contagion risk and give greater certainty to reserve segregation.[15] Tokenised deposits remain outside the framework, with separate MAS guidance to follow. The MAS has also clarified that the restricted depositor scope applicable to wholesale banks and merchant banks carries over to holders of SCS (or e-money) issued by such entities or their issuance vehicles – effectively precluding these entities from issuing SGD stablecoins freely tradeable by retail individuals, while leaving room for wholesale use cases such as corporate settlement and trade finance.

Retail safeguards for non-MAS-regulated stablecoins

Finally, the MAS is considering requirements on licensed DPT service providers that offer non-MAS-regulated “stablecoins” (including any DPT purporting to maintain a stable value, however marketed) to retail customers: enhanced disclosures on reserve backing, clear risk warnings that the token is not regulated by the MAS for value stability, and a restriction on marketing such tokens to retail customers using the term “stablecoin”.[16] Exchanges and brokers active in the Singapore retail market should follow this proposal closely, including the consultation question on an appropriate transition period.

4. THE INTERNATIONAL CONTEXT

Singapore’s framework is being finalised against the backdrop of a global wave of stablecoin legislation. In the United States, the GENIUS Act was signed into law in July 2025 and is expected to take effect on 18 January 2027; the U.S. Treasury issued its notice of proposed rulemaking on stablecoin issuance, offer and sale in August 2026, following earlier proposals from the federal banking agencies and a joint FinCEN/OFAC proposal on AML and sanctions compliance.[17] In the EU, MiCA’s e-money token regime has been operative since mid-2024. In the UK, the FCA published final rules for qualifying stablecoin issuers in June 2026, and the Bank of England is consulting on a draft Code of Practice for sterling-denominated systemic stablecoins (featuring a temporary £40 billion issuance guardrail per systemic stablecoin), which it intends to finalise by the end of 2026.[18] Hong Kong’s Stablecoins Ordinance took effect in August 2025, with the HKMA granting its first two issuer licences in April 2026.[19]

Viewed against these regimes, the MAS’s proposals are broadly convergent on the core protections: full reserve backing in high-quality liquid assets, redemption at par, issuer-level prudential and disclosure requirements, a prohibition on interest (mirroring the GENIUS Act, MiCA and the UK rules), and a distinct, more intensive tier for systemic stablecoins. Indeed, several of the new proposals – the potential minimum cash/deposit proportion, issuance or holding caps, and stress testing – draw expressly on UK and EU practice. Where Singapore differs is chiefly in regulatory technique: the MAS-SCS framework remains an opt-in labelling regime under which unlabelled stablecoins may continue to circulate as DPTs, in contrast to the mandatory licensing perimeters in the United States, Hong Kong and the EU; the mandatory overlay in Singapore arrives only through systemic designation. Singapore’s stated intention to authorise or recognise only a limited number of stablecoins also signals a more selective gatekeeping posture than most peer regimes.

We expect the GENIUS Act to be a driving force behind stablecoin adoption globally – and, importantly, a mechanism through which U.S. compliance requirements are effectively exported to other jurisdictions. Once the Act takes effect, U.S. digital asset service providers will generally be prohibited from offering foreign-issued payment stablecoins unless the foreign issuer has the technological capability to comply with lawful orders (with a broader restriction, tied to comparability and reciprocity arrangements with the issuer’s home jurisdiction, following in July 2028). Foreign frameworks are therefore increasingly being designed with U.S. comparability in mind – and the MAS’ new machinery for multi-jurisdictional issuance and recognition of foreign-regulated stablecoins, both built on “substantive equivalence” assessments and supervisory cooperation, positions Singapore-regulated stablecoins for interoperability in that emerging cross-border architecture.

5. NEXT STEPS

Comments on the Consultation Paper are due by 16 October 2026. The MAS will consult on the subsidiary legislation – which will carry much of the detail on reserve composition, redemption timelines, stress testing and recognition conditions – at a later date, and no timeline has yet been set for the amendments to be enacted.

Prospective stablecoin issuers (including bank groups weighing issuance structures), operators of multi-jurisdictional stablecoin arrangements, foreign issuers with Singapore distribution, and DPT service providers offering stablecoins to Singapore customers should assess the proposals against their business models and consider responding to the consultation.

[1] MAS, Consultation Paper on Proposed Amendments to the Payment Services Act for Stablecoin Regulation (P015-2026), 1 September 2026 (Consultation Paper) (link); MAS Media Release, MAS Consults on Legislative Amendments to Implement Stablecoin Regulatory Framework, 1 September 2026.

[2] MAS, Consultation Paper on Proposed Regulatory Approach for Stablecoin-related Activities (P009-2022), 26 October 2022 (2022 Consultation).

[3] MAS, Response to Public Consultation on Proposed Regulatory Approach for Stablecoin-related Activities, 15 August 2023 (2023 Consultation Response) (link).

[4] Draft Amendments to the Payment Services Act 2019, published as Annex C to the Consultation Paper. The draft provisions remain subject to change and to review by the Attorney-General’s Chambers.

[5]Consultation Paper, paragraph 1.3.

[6]Consultation Paper, paragraphs 2.5 to 2.7; draft sections 5A and 6 of the PS Act (Annex C). Contraventions of the holding-out prohibitions attract fines of up to S$250,000 (for entities) or up to S$125,000 and/or imprisonment of up to 3 years (for individuals).

[7] 2023 Consultation Response, paragraphs 5.3 to 5.4.

[8] Consultation Paper, paragraphs 5.1 to 5.11; draft section 100A of the PS Act (Annex C).

[9] Consultation Paper, paragraphs 5.12 to 5.14; draft Part 2B of the PS Act (Annex C).

[10] Consultation Paper, paragraphs 3.2 to 3.3. The prohibition is not intended to apply to revenue-sharing, distribution, service or other commercial arrangements between the issuer and a third party.

[11] Consultation Paper, paragraphs 3.6 to 3.8.

[12] Consultation Paper, paragraphs 3.14 to 3.20.

[13] Consultation Paper, paragraphs 3.21 to 3.23.

[14] Consultation Paper, section 4; draft Part 2A and sections 102, 103 and 113A of the PS Act (Annex C).

[15] Consultation Paper, paragraphs 6.3 to 6.7.

[16] Consultation Paper, paragraphs 6.1 to 6.2.

[17] Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), S. 1582, 119th Cong., signed into law on 18 July 2025. See U.S. Treasury, Treasury Seeks Public Comment on GENIUS Act Proposed Rulemaking, 17 August 2026 (link).

[18] FCA, Policy Statement PS26/10 and related policy statements for the UK cryptoasset regime, 30 June 2026 (link); Bank of England, Sterling-denominated systemic stablecoins – policy statement and consultation on a draft Code of Practice, 22 June 2026 (link).

[19] HKMA, Granting of stablecoin issuer licences, 10 April 2026 (link).

The following Gibson Dunn lawyers prepared this update: Hagen Rooke, Jun Qi Chin, and Nicholas Tok.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. If you wish to discuss any of the matters set out above, please contact any member of Gibson Dunn’s Financial Regulatory team, including the following:

Hagen H. Rooke – Singapore (+65 6507 3620, hhrooke@gibsondunn.com)
William R. Hallatt – Hong Kong (+852 2214 3836, whallatt@gibsondunn.com)
Jeffrey L. Steiner – Washington, D.C. (+1 202.887.3632, jsteiner@gibsondunn.com)
Michelle M. Kirschner – London (+44 20 7071 4212, mkirschner@gibsondunn.com)
Sara K. Weed – Washington, D.C. (+1 202.955.8507, sweed@gibsondunn.com)
Jason J. Cabral – New York (+1 212.351.6267, jcabral@gibsondunn.com)
Emily Rumble – Hong Kong (+852 2214 3839, erumble@gibsondunn.com)
Jun Qi Chin – Singapore (+65 6507 3622, jqchin@gibsondunn.com)
Nicholas Tok – Singapore (+65 6507 3621, ntok@gibsondunn.com)

This article describes the current state-of-play with MFN and key deal drafting considerations.

Life sciences dealmaking is running at a record pace — straight into a pricing regime that is still being written.

According to Gibson Dunn’s July biopharma M&A survey, the first half of 2026 saw 13 announced acquisitions of public biopharma targets ranging from $1 billion to $25 billion, roughly $66.6 billion in upfront value — an annualized pace exceeding any year in the survey’s history.

Deal structures are shifting too: Per the firm’s July 2026 contingent value rights study, CVRs appeared in under 10% of these deals before 2019, but in 23% to 33% every year since 2023 — and net-sales milestones are brand new, appearing in five deals, all signed in 2025 and 2026. The market adopted its most pricing-policy-exposed milestone structure just as U.S. pricing policy began compressing the metric it measures.

The collision is here: Section 232 tariffs of up to 100% took effect July 31, with relief expressly conditioned on most-favored-nation pricing agreements, and the proposed Global Benchmark for Efficient Drug Pricing Medicare demonstration is scheduled to begin on Oct. 1.

Originally published by Law360 on August 25, 2026, © Portfolio Media. Inc. | New York, NY.

Please view the complete article at the link below.

Read More

This article was prepared by Margaux Hall, Branden Berns, and Karen Spindler, with contributions by Ryan Murr, co-chair of the firm’s Life Sciences Practice Group.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding the issues discussed in this article. Please contact the Gibson Dunn lawyer with whom you usually work in the firm’s Life Sciences or FDA & Health Care practice groups, or the authors:

Margaux Hall – Washington, D.C. (+1 202.887.3605, mjhall@gibsondunn.com)

Branden C. Berns – San Francisco (+1 415.393.4631, bberns@gibsondunn.com)

Karen Spindler – San Francisco (+1 415.393.8298, kspindler@gibsondunn.com)

Ryan Murr – San Francisco (+1 415.393.8373, rmurr@gibsondunn.com)

Gibson Dunn’s ERISA litigation update summarizes key legal opinions and developments during the past quarter to assist plan sponsors and administrators in navigating the rapidly changing ERISA litigation landscape.

Introduction

A dedicated plaintiffs’ bar continues to test the boundaries of ERISA liability, while courts continue to define the substantive and procedural limits of those theories. During the second quarter of 2026, litigation expanded into new areas of employer-sponsored health and retirement plans, even as appellate courts issued important decisions clarifying the scope of ERISA’s statutory requirements and remedial framework. The Department of Labor also signaled a change in its enforcement approach that may shape future litigation and fiduciary decision-making.

This quarterly update highlights key developments from the second quarter of 2026. It discusses emerging fiduciary challenges to employer-sponsored health plan design; developments in 401(k) forfeiture litigation as those cases reach the courts of appeals; recent appellate developments addressing withdrawal liability, actuarial equivalence, and the scope of equitable relief; and policy developments reflecting the Department of Labor’s evolving enforcement priorities.

I. Recent Litigation Activity

A. Emerging Challenges to Employer Health Plan Design

Plaintiffs continue to test whether ERISA fiduciary duties can be used to challenge not only retirement plan investment menus, but also the design and administration of employer-sponsored health plans. One recent development is litigation challenging allegedly “financially dominated” health plan options—options that plaintiffs contend cost participants more than alternatives without providing commensurate financial or medical value.

In Barbich v. Northwestern University, No. 25-cv-6849, 2026 WL 1552506 (N.D. Ill. Apr. 2, 2026), participants in Northwestern University’s employee welfare plan alleged that Northwestern breached ERISA fiduciary duties by offering a low-deductible, higher-premium PPO option that was allegedly financially dominated by a higher-deductible, lower-premium PPO option. Id. at *1. Plaintiffs asserted that the higher-premium option provided no meaningful financial or medical benefit once premiums, deductibles, coinsurance, and out-of-pocket maximums were considered, and that Northwestern failed to disclose to participants that alleged “domination” when the value of the plan options was compared. Id.

The district court denied Northwestern’s motion to dismiss. On standing, it held that plaintiffs adequately alleged a concrete economic injury by pleading that they overpaid for coverage through payroll deductions, rejecting the argument that plaintiffs suffered no injury because they fully received the benefits the plan promised. Id. at *2–*3. The court also declined to dismiss on the ground that the challenged conduct involved settlor rather than fiduciary functions, finding that plaintiffs plausibly alleged fiduciary conduct—” (1) selecting the specific options for employees to enroll in, and (2) exercising a duty to monitor the settlor decisions”—and that a determination of whether conduct was settlor versus fiduciary in nature was fact-intensive and better suited to a later stage of the litigation. Id. at *3–*4. On the merits, the court allowed the prudence and disclosure claims to proceed, relying in part on allegations that Northwestern knew, after consulting actuaries, that participants were unlikely to be better off in the higher-premium option. Id. at *4–*5.

The theory—invoking ERISA fiduciary duties to challenge purportedly identical but more costly health plan options—appears to be spreading. In June 2026, a participant in the Abbott Laboratories Health Care Plan filed a similar putative class action alleging that Abbott breached ERISA fiduciary duties by offering a traditional PPO option that allegedly cost more than a high-deductible health plan option at every level of medical utilization. Ebarle v. Abbott Laboratories, No. 1:26-cv-06834 (N.D. Ill. filed June 10, 2026). The complaint expressly relies on Barbich and alleges that Abbott’s plan fiduciaries failed to eliminate, redesign, or reprice the allegedly dominated option. Id. Other, similar cases have been filed, including a pre-Barbich case against the University of Rochester.[1]

Why this matters: Barbich is only a pleading-stage decision and did not resolve whether plaintiffs’ economic theory is correct or whether the challenged conduct was fiduciary in nature. But together with the Ebarle complaint, it suggests that plaintiffs may increasingly seek to import retirement-plan investment fund menu-monitoring theories into the health-plan context. Plan sponsors should expect continued scrutiny of how health plan options are selected, documented, and described to participants, particularly where a higher-cost option can be alleged to provide no offsetting participant benefit.

B. 401(k) Forfeiture Litigation Enters the Appellate Phase

As discussed in our February 2026 update, plaintiffs have filed dozens of class actions challenging the use of forfeited 401(k) funds to offset employer contributions rather than to pay plan expenses or to reallocate amounts to participant accounts, alleging violations of ERISA’s duties of prudence and loyalty and its anti-inurement and prohibited-transaction provisions. Although a number of district courts have rejected these claims at the pleading stage, several dismissals are now on appeal.

The second quarter brought the first appellate decision in this wave of cases. In Matula v. Wells Fargo & Co., 175 F.4th 958 (8th Cir. 2026), the plaintiff challenged Wells Fargo’s use of forfeited employer matching contributions to offset future employer contributions rather than to pay plan expenses or make corrective adjustments to participant accounts. The Eighth Circuit did not reach the merits, instead affirming the dismissal for lack of Article III standing—though remanding for the dismissal to be entered without prejudice—based on the plaintiff’s failure to plead a concrete, particularized injury traceable to the use of forfeitures. Id. at 961–62. The panel noted that, at oral argument, plaintiff’s counsel acknowledged that the complaint alleged only plan-level harm and no injury to his own account. Id. At the same time, the panel faulted the district court for resolving disputed plan-interpretation questions at the pleading stage rather than assessing standing on the allegations in the complaint. Id. at 962.

Although Matula is a standing decision rather than a merits ruling, it is significant as the first appellate decision in the current forfeiture wave, and it reinforces a broader theme in ERISA litigation: even where plaintiffs invoke plan-wide remedies under ERISA § 502(a)(2), Article III requires a concrete injury to the named plaintiff. Other forfeiture appeals remain pending in the Third, Fourth, and Ninth Circuits.[2] The Department of Labor has filed amicus briefs in several of those appeals, supporting plan sponsors and arguing that the use of forfeitures to offset employer contributions, without more, does not violate ERISA when permitted by plan terms.[3]

What to watch: The first wave of appellate decisions will likely determine whether forfeiture litigation remains a district-court pleading-stage phenomenon or becomes a more durable source of ERISA exposure. If other courts of appeals follow Matula’s standing-focused approach or affirm dismissals on the merits, plaintiffs may face growing difficulty advancing these claims. But an appellate decision allowing a forfeiture claim to proceed could encourage further filings and sharpen focus on plan language and forfeiture procedures.

II. Significant Appellate Developments

Recent appellate developments continue to shape both substantive ERISA doctrine and procedural aspects of ERISA litigation. In addition, the Supreme Court has agreed to consider in the upcoming term whether an ERISA plaintiff alleging fund underperformance must plead a “meaningful benchmark” to state a claim. Anderson v. Intel Corp. Investment Policy Committee, No. 25-498 (argument scheduled for October 6, 2026).

A. Supreme Court Clarifies Timing Rules for Withdrawal Liability Assumptions

The Supreme Court issued an important ERISA decision in the second quarter addressing the actuarial assumptions used to calculate withdrawal liability owed by employers that cease contributions to underfunded multiemployer pension plans. On May 21, 2026, in M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund, 146 S. Ct. 1224, 1230–31 (2026), the Court unanimously held that ERISA does not require multiemployer pension plans to calculate withdrawal liability using only actuarial assumptions adopted on or before the statutory measurement date.

Withdrawal liability is generally calculated “as of” the last day of the plan year preceding withdrawal. The employers in M & K argued that this language required the plan to use only the actuarial assumptions in effect on that measurement date. Id. at 1229. The dispute arose when the Fund adopted a lower discount rate after the measurement date and applied it to employers that withdrew the following plan year—materially increasing the assessed liability, since a lower discount rate raises the present value of plan liabilities. Id. Below, the D.C. Circuit had affirmed the district courts and held that actuaries could select assumptions after the measurement date, so long as those assumptions were “‘based on the body of knowledge available up to the measurement date.’” Id. at 1229–30. The Supreme Court granted certiorari to resolve a split with the Second Circuit, which had held that interest-rate assumptions for withdrawal liability purposes must be adopted no later than the measurement date. Id.

The Supreme Court rejected the employers’ timing argument and affirmed the D.C. Circuit. Writing for a unanimous Court, Justice Jackson reasoned that ERISA’s measurement-date language fixes the date for valuing plan assets and other historical plan data but does not impose a deadline for selecting the actuarial assumptions used to perform the calculation—assumptions being predictive judgments about the plan’s future experience rather than “facts” fixed as of the measurement date. Id. at 1230–31. The Court relied on 29 U.S.C. § 1393, which requires that actuarial assumptions and methods, in the aggregate, be reasonable and reflect the actuary’s best estimate of anticipated plan experience but contains no timing requirement. Id. The Court contrasted that provision with 29 U.S.C. § 1399(c)(1)(A)(ii), in which Congress expressly referred to assumptions used for the “most recent actuarial valuation,” showing that Congress knew how to impose timing limits when it wished to do so. Id. at 1231–32. The Court emphasized that employers remain able to challenge assessments in arbitration on the ground that the assumptions used were unreasonable and expressly left open whether assumptions adopted after the measurement date must rest only on information available as of that date. Id. at 1233.

Practical impact: M & K makes timing-based challenges to withdrawal liability assessments more difficult while shifting attention to the substance of actuarial assumptions. Employers evaluating withdrawal liability exposure—in connection with facility closures, asset sales, restructurings, or collectively bargained benefits changes—should be cautious about relying on assumptions used in prior annual valuations as a proxy for ultimate withdrawal liability. For a fuller discussion of the decision and its implications, see our recent client alert on M & K.

B. Eleventh Circuit Joins Sixth Circuit on Actuarial Equivalence

As discussed in our May 2026 update, the Sixth Circuit’s decision in Reichert v. Kellogg Co., 170 F.4th 473 (6th Cir. 2026), became the first appellate decision to allow claims in the recent wave of cases challenging actuarial equivalence of alternate forms of retirement benefits to proceed, and further appellate guidance was expected. That guidance arrived this quarter in Drummond v. Southern Company Services, Inc., 177 F.4th 1076 (11th Cir. 2026), where plaintiffs alleged that the Southern Company Pension Plan used outdated mortality tables and unreasonable interest-rate assumptions in converting single life annuities into joint and survivor annuities, producing optional benefit forms that were not actuarially equivalent. 177 F.4th at 1080.

The Eleventh Circuit reversed the district court’s dismissal. Joining Reichert, it held that ERISA’s actuarial equivalence requirement obligates plans to use reasonable actuarial assumptions, reasoning that equivalence itself incorporates a reasonableness constraint because it cannot be achieved using arbitrary or outdated assumptions. Id. at 1087. The court also allowed plaintiffs’ related nonforfeiture theory to proceed, holding that ERISA § 205(i), 29 U.S.C. § 1055(i), permits qualified preretirement survivor annuity charges only to the extent they reasonably reflect the cost of the benefit, which plaintiffs had plausibly alleged the challenged charges exceeded. Id. at 1107–08.

Practical impact: Drummond confirms that Reichert was not an isolated decision: two courts of appeals have now endorsed the core premise that plans must use reasonable actuarial assumptions when calculating optional forms of benefits. Plan sponsors maintaining defined benefit plans should expect continued scrutiny of legacy conversion factors, mortality tables, interest-rate assumptions, and survivor-annuity charges.

C. Fifth Circuit to Reconsider the Scope of “Appropriate Equitable Relief” En Banc

The Fifth Circuit is poised to revisit whether a monetary “make-whole” surcharge against a fiduciary qualifies as “appropriate equitable relief” that can be sought under ERISA § 502(a)(3). In Aramark Services, Inc. Group Health Plan v. Aetna Life Ins. Co., 162 F.4th 532 (5th Cir. 2025), a December 2025 panel held that a plan sponsor’s claims against its third-party administrator for restoration of plan losses sought equitable relief—and so fell within a contractual arbitration carve-out for equitable claims—relying on CIGNA Corp. v. Amara and circuit precedent recognizing surcharge as equitable relief. 162 F.4th at 543–44 (citing CIGNA Corp. v. Amara, 563 U.S. 421, 442 (2011)). On April 28, 2026, the full court vacated that opinion and granted rehearing en banc.[4]

What to watch: The Fifth Circuit’s en banc hearing is scheduled for oral argument during the court’s September 2026 session. That decision may bear on a developing circuit split: the Fourth and Sixth Circuits have rejected surcharge as a form of equitable relief available under § 502(a)(3),[5] while the now-vacated Aramark panel had recognized it. The Sixth Circuit’s decision in Aldridge is itself pending certiorari before the Supreme Court. There, the plaintiffs petitioned, and on April 6, 2026, the Court invited the Solicitor General to file a brief expressing the views of the United States—views to which the Court often gives attention. 146 S.Ct. 2152 (Mem), 224 L.Ed.2d 379 (Apr. 6, 2026). Because the availability of make-whole monetary relief shapes both remedies strategy and the enforceability of arbitration carve-outs in plan service agreements, plan sponsors, fiduciaries, and service providers should watch for the Fifth Circuit’s en banc ruling and any further developments in Aldridge.

III. Regulatory and Policy Context

Unlike the prior quarter, which saw a significant proposed rule addressing fiduciary decision-making in the investment-selection context, the second quarter of 2026 was marked less by new ERISA rulemaking than by signals regarding the Department of Labor’s enforcement and litigation priorities. The public comment period on the Department’s proposed rule—which would establish a process-based safe harbor for fiduciaries selecting designated investment alternatives, including those incorporating alternative assets—closed on June 1, 2026, having drawn more than 47,000 public comments. It remains to be seen what the final rule will look like and how far it will depart from the proposal. Gibson Dunn submitted comments on behalf of the American Investment Council, which address the proposed rule in more detail. For a detailed white paper analyzing the comments received, see the firm’s client alert.

On April 14, 2026, the Department of Labor’s Employee Benefits Security Administration (EBSA) issued Field Assistance Bulletin 2026-01, “Guiding Principles for EBSA Enforcement Priorities.” The Bulletin states that enforcement should be “fair, even-handed, responsive, and focused,” and identifies four guiding principles: focusing on the most egregious conduct and significant harm; avoiding regulation by enforcement where possible; requiring senior-level review of critical enforcement initiatives; and committing to timely enforcement.

Of particular relevance to ERISA fiduciary litigation, the Bulletin states that EBSA will prioritize civil investigations involving breaches of the duty of loyalty, direct evidence of non-exempt prohibited transactions involving impermissible conflicts, and conduct involving bad faith, misappropriation, or improper administration of plan benefits. At the same time, it emphasizes that ERISA is a law of process, not results, and that where enforcement rests solely on an alleged breach of prudence, EBSA should avoid cases that unfairly second-guess process-based fiduciary judgments. The Bulletin further directs that EBSA should not, where possible, regulate through enforcement or use enforcement actions to announce novel legal theories, and that enforcement activity generally should have a close nexus to ERISA’s text, final regulations or prominently published guidance, or clearly established case law, absent approval from EBSA leadership.

The Bulletin also instructs EBSA staff to avoid any appearance that enforcement activities are coordinated with private plaintiffs’ attorneys pursuing parallel actions, and a footnote discloses that the Department’s Inspector General had been investigating EBSA’s past use of common-interest agreements with private plaintiff law firms. The Inspector General has since issued a broader report finding that the Department lacked adequate controls for tracking, monitoring, and sharing confidential information under common-interest agreements. Finally, the Bulletin commits EBSA to concrete investigation timelines—generally eighteen months for routine matters and thirty months for complex investigations, absent exigent circumstances.

This posture is directionally consistent with positions the Department has taken in recent ERISA litigation. The Department has filed amicus briefs in pending 401(k) forfeiture appeals arguing that the use of forfeited employer contributions in a manner permitted by plan terms does not, without more, violate ERISA. The Solicitor General and Department have also filed an amicus brief in the Supreme Court in Anderson v. Intel defending the requirement of a meaningful benchmark. Taken together, the Bulletin and the Department’s litigation positions suggest an enforcement approach focused on clear statutory and regulatory obligations, process-based compliance, and cases involving concrete participant harm or conflicted conduct.

Practical context: Although the Department’s enforcement guidance does not bind courts or private plaintiffs, it may influence the broader litigation environment. For plan sponsors and fiduciaries, the Bulletin underscores the continued importance of maintaining and documenting prudent fiduciary processes, while signaling that the Department may be less inclined to support theories seeking liability based solely on hindsight disagreement with discretionary fiduciary judgments.

Closing

We will continue to monitor these developments and provide updates as additional decisions are issued and new cases progress.

[1] Green v. University of Rochester, No. 6:25-cv-06499 (W.D.N.Y. 2025).

[2] See, e.g., Cain v. Siemens Corp., No. 25-02564 (3d Cir. filed Aug. 19, 2025); Stana v. SAS Institute Inc., No. 26-1305 (4th Cir. filed Mar. 18, 2026); Hutchins v. HP Inc., No. 25-826 (9th Cir. filed Feb. 7, 2025).

[3] See, e.g., Stana v. SAS Institute Inc., No. 26-1305 (4th Cir. July 24, 2026); Barragan v. Honeywell Int’l. Inc., No. 25-2609 (3d Cir. Jan. 30, 2026); Cain v. Siemens Corp., No. 25-02564 (3d Cir. Jan. 23, 2026); Hutchins v. HP Inc., No. 25-826 (9th Cir. July 9, 2025).

[4] Aramark Services, Inc. Group Health Plan v. Aetna Life Ins. Co., 173 F.4th 744 (5th Cir. 2026).

[5] Rose v. PSA Airlines, Inc., 80 F.4th 488 (4th Cir. 2023); Aldridge v. Regions Bank, 144 F.4th 828 (6th Cir. 2025).

The following Gibson Dunn lawyers prepared this update: Karl Nelson, Ashley Johnson, Jennafer Tryck, and Olympia Karageorgiou.

Gibson Dunn lawyers are available to assist in addressing any questions you may have about these developments. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any leader or member of the firm’s ERISA Litigation, Labor & Employment, or Executive Compensation & Employee Benefits practice groups:

ERISA Litigation:
Karl G. Nelson – Dallas (+1 214.698.3203, knelson@gibsondunn.com)
Ashley E. Johnson – Dallas (+1 214.698.3111, ajohnson@gibsondunn.com)
Heather L. Richardson – Los Angeles (+1 213.229.7409, hrichardson@gibsondunn.com)
Jennafer M. Tryck – Orange County (+1 949.451.4089, jtryck@gibsondunn.com)

Labor & Employment:
Jason C. Schwartz – Washington, D.C. (+1 202.955.8242, jschwartz@gibsondunn.com)
Katherine V.A. Smith – Los Angeles (+1 213.229.7107, ksmith@gibsondunn.com)

Executive Compensation & Employee Benefits:
Michael J. Collins – Washington, D.C. (+1 202.887.3551, mcollins@gibsondunn.com)
Sean C. Feller – Los Angeles (+1 310.551.8746, sfeller@gibsondunn.com)
Krista Hanvey – Dallas (+1 214.698.3425, khanvey@gibsondunn.com)

From the Derivatives Practice Group: This week, the CFTC held the inaugural meeting of its Innovation Advisory Committee in Washington, D.C.

New Developments

Members of the CFTC’s Innovation Advisory Committee Join Chairman Selig in Washington at Inaugural Meeting. On August 20, the CFTC held the inaugural meeting of its Innovation Advisory Committee in Washington, D.C. This council of American innovators, entrepreneurs, thinkers, and builders provided insights and recommendations to the Commission to help ensure its regulations keep pace with the rapid speed of innovation. Chairman Selig convened the meeting and delivered opening remarks (full remarks here). [NEW]

CFTC Seeks Public Comments on Proposed Elimination of SEF Order Book Requirement for Permitted Transactions. On August 20, the CFTC published a Notice of Proposed Rulemaking seeking public comments on proposed amendments to Commission regulation § 37.3(a)(2) to remove the order book requirement allowing swap execution facilities (SEFs) not to offer an order book for permitted transactions. The proposed elimination of the order book requirement for permitted transactions provides SEFs with the flexibility to determine how to allocate their resources, while also potentially helping to spur further development and innovation in execution methods that may be better suited to trading the products that SEFs list.

CFTC Requests Comment on the Listing of Compute Derivatives Contracts. On August 19, the CFTC issued a request for comment to better inform its understanding and oversight of derivatives markets in compute. This request seeks comment on the size, liquidity, and other considerations with respect to compute cash markets, market oversight and manipulation concerns, customer protection, and perpetual compute futures.

CFTC Resolves Actions Against Former Alameda CEO, and Alameda and FTX Co-Founder. On August 19, the CFTC announced the U.S. District Court for the Southern District of New York entered supplemental consent orders against Caroline Ellison, former Alameda CEO, and Gary Wang, former Alameda and FTX co-founder. The orders require Ellison and Wang to continue cooperating with the Commission, impose a five-year trading ban and a 10-year registration ban on Ellison, and impose a five-year trading ban and an eight-year registration ban on Wang.

CFTC Seeks Public Comment on Proposed Rule Changes for Commodity Pool Operator and Commodity Trading Advisor Registration. On August 18, the CFTC published a Notice of Proposed Rulemaking seeking public comments on amendments to part 4 of the CFTC’s regulations. These amendments address registration requirements for commodity pool operators and commodity trading advisors, and the proposed rule aims to reduce duplicative and overlapping regulation.

New Developments Outside the U.S.

New Industry-Led Developments

ISDA Publishes Interviews on Expanding the Universe of Eligible Variation Margin Collateral for Non-cleared Derivatives. On August 25, ISDA published a series of interviews with buy- and sell-side firms to understand the drivers of a growing use of non-cash assets as variation margin for non-cleared over-the-counter derivatives and the barriers that remain to expanding the use of non-cash collateral. The firms interviewed span asset managers, pension schemes and global dealers across North America, the UK and Europe, and reflect a wide range of operating models, from fully in-house collateral programs to those outsourced to a custodian or collateral agent. [NEW]

ISDA Responds to FASB Hedge Accounting Guidance. On August 14, ISDA responded to an exposure draft from the Financial Accounting Standards Board (FASB). ISDA states that it broadly supports the FASB’s proposed targeted improvements to hedge accounting, including allowing interest rate hedging of held-to-maturity debt securities, recognizing all Secured Overnight Refinancing Rate tenors as benchmark rates and permitting certain cross-currency swaps different reset dates in net investment hedges.

The following Gibson Dunn attorneys assisted in preparing this update: Jeffrey Steiner, Adam Lapidus, Hayden McGovern, Karin Thrasher, and Alice Wang.

Jeffrey L. Steiner, Washington, D.C. (202.887.3632, jsteiner@gibsondunn.com)

Michael D. Bopp, Washington, D.C. (202.955.8256, mbopp@gibsondunn.com)

Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)

Darius Mehraban, New York (212.351.2428, dmehraban@gibsondunn.com)

Jason J. Cabral, New York (212.351.6267, jcabral@gibsondunn.com)

Adam Lapidus, New York (212.351.3869, alapidus@gibsondunn.com )

Stephanie L. Brooker, Washington, D.C. (202.887.3502, sbrooker@gibsondunn.com)

William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com )

David P. Burns, Washington, D.C. (202.887.3786, dburns@gibsondunn.com)

Marc Aaron Takagaki, New York (212.351.4028, mtakagaki@gibsondunn.com)

Hayden K. McGovern, Dallas (202.887.3569, hmcgovern@gibsondunn.com)

Karin Thrasher, Washington, D.C. (202.887.3712, kthrasher@gibsondunn.com)

Alice Yiqian Wang, Washington, D.C. (202.777.9587, awang@gibsondunn.com)

Gibson Dunn’s Immigration Task Force remains committed to helping Afghan allies and their families pursue every avenue that remains open to them.

I. INTRODUCTION / BACKGROUND

This month marks five years since the Taliban retook control of Afghanistan. Beginning in August 2021, tens of thousands of Afghans, along with United States citizens and permanent residents, tried desperately to flee the country. In the months following the Taliban’s seizure of power, the situation in Afghanistan became even more dire, with thousands internally displaced, in hiding, and at risk of Taliban reprisals.

Thousands of Afghans have sought to escape Taliban rule, and they face a perilous future. Individuals targeted by the Taliban—including political dissidents, interpreters, women, government workers, journalists, cultural rights defenders, artists, religious and ethnic minorities, and individuals associated with Western culture—live in fear, and many have witnessed and experienced beatings, arrests, enforced disappearances, and killings. Many of those individuals previously assisted the United States government and military, served in the Afghan government when allied with the United States, or worked with nonprofit organizations and NGOs, and accordingly fear Taliban reprisals.

In the aftermath of the Taliban’s rise, the United States government made commitments to Afghan allies regarding subsequent evacuation and relocation efforts. For example, Operation Allies Welcome (OAW) coordinated efforts across the federal government to support Afghans who worked alongside the United States in Afghanistan as they resettled in the United States.[1] Special Immigrant Visas (SIVs) were also available for Afghans who worked for or on behalf of the United States government during the wars in Afghanistan and Iraq and provided a pathway to lawful permanent resident status in the United States for individuals facing serious threats for their actions.

In tandem, large corporations stepped up to support the Afghan resettlement and refugee community in unprecedented ways. Often working together with government agencies, corporate America quickly mobilized mentorship and employment opportunities, and manifested deep support for Afghan allies through direct action, financial contributions, job opportunities, and safe passage. As one example, Welcome.US—a national nonprofit coordinating support for Afghan and other refugees across the United States—provides financial support for rent, food, and clothing, as well as non-financial assistance including with immigration paperwork, public school enrollment, legal support, and access to housing and mental health services.[2]

Today, however, options for Afghans to seek immigration relief and status in the United States have narrowed significantly. Over the past five years, Gibson Dunn attorneys have been at the forefront of efforts to help Afghan nationals navigate these pathways, assisting hundreds of individuals and families seeking safety, stability, and a lawful future in the United States. Gibson Dunn has also provided extensive advice and counsel to corporations on best practices for hiring, integrating, and supporting Afghan refugees. Drawing on that experience, this alert maps the pathways that were available in the aftermath of the fall of Kabul, traces how each has narrowed since, and looks to the future.

II. LEGAL PATHWAYS PREVIOUSLY AVAILABLE TO AFGHANS AT RISK

For Afghans fleeing retaliation and violence, the United States has historically—and most prominently over the past decade—offered a variety of pathways to safety and immigration relief in the United States. The below statuses were among the principal legal mechanisms for Afghan refugees to relocate to or to gain safe status in the United States. Recipients of these various forms of immigration status may often apply to bring their families with them to the United States or bring their families to join them if the recipient is already in the United States (such as an asylee).

1. Special Immigration Visa (SIV) Program:

The SIV program grants visas to Afghans who worked for or on behalf of the United States in Afghanistan for at least a year, including as linguistic and cultural interpreters to the U.S. military. SIV recipients qualify for permanent resident status and have a pathway to citizenship.[3] SIV-holders may bring their spouse and unmarried children younger than 21 to the United States with them. The SIV application process is arduous—it requires applicants to, among other things, obtain letters of recommendation from supervisors at their qualifying jobs and to travel to a country other than the United States or Afghanistan to have an in-person interview at a United States consulate.[4]

2. Humanitarian Parole:

Humanitarian parole is a mechanism for individuals (from any country, including Afghanistan) with an urgent humanitarian need to temporarily enter the United States.[5] Parole is not a permanent legal authorization to remain in the country, nor is it a pathway to any other immigration status, but it provides short-term access to the United States and, potentially, the ability to apply for a more durable form of status, such as asylum. In 2021, 76,000 Afghans were granted humanitarian parole into the United States after being evacuated in Operation Allies Welcome.[6] Those granted humanitarian parole may remain in the United States if they transition to another legal status, such as by applying for asylum, temporary protected status, a visa, or certain special humanitarian statuses.

3. Temporary Protected Status:

Temporary Protected Status (TPS) is a designation given by the Secretary of Homeland Security on a country-by-country basis, in recognition that circumstances such as conflicts, disasters, or other unrest prevents individuals returning safely to a designated country.[7] Individuals from designated countries may apply for TPS while in the United States, allowing them to remain in the United States so long as their TPS status lasts—subject to periodic renewals. TPS is not a permanent status or path to any other status, but it prevents an individual from being removed from the country for a set period of time, during which they may qualify for other forms of status.

Afghanistan was added to the list of countries eligible for TPS in 2022, less than a year after the Taliban takeover.[8] TPS status was renewed for Afghans in 2023.[9] As of May 2025, when the Department of Homeland Security terminated the eligibility of Afghans for TPS (as described below), nearly 12,000 Afghans in the United States relied on TPS for protection from deportation and eligibility to work in the United States.[10]

4. Refugee Processing via the United States Refugee Admissions Program (USRAP):

The United States Refugee Admissions Program (USRAP) is a generalized refugee admissions program that resettles refugees in the United States and gives them an opportunity to gain permanent residency and citizenship. Individuals must receive a referral to USRAP to be considered for potential refugee status, which often involves lengthy delays. To be considered a refugee under United States law, an individual must be outside the United States and generally also outside of their country of nationality, of “special humanitarian concern to the U.S.,” and demonstrate that they were persecuted in their home country due to “race, religion, nationality, membership in a particular social group, or political opinion.”[11] Refugees may be referred for priority resettlement through USRAP, which allow United States officials or organizations to refer individuals for prioritization—within the set refugee cap.[12]

5. Asylum:

Individuals may be granted asylum in the United States if they have suffered persecution (or fear they will suffer persecution) in their countries of origin, based on their race, religion, nationality, membership in a particular social group, or political opinion, in addition to meeting a number of other legal requirements.[13] Individuals granted asylum may seek permanent residency and, eventually, citizenship. An individual must be physically present in the United States to apply for asylum, which presents a significant barrier to application. Many Afghans have applied for asylum in the United States, though many applications remain pending, as processing may take years.

III. RECENT NARROWING / CLOSURES OF PATHWAYS

Since the start of the second Trump Administration, there have been significant constrictions to Afghans’ ability to relocate safely and to obtain long-term, stable, lawful status, for those individuals that are able to relocate.

Key developments include:

1. Termination of TPS:

In May 2025 the Department of Homeland Security terminated the eligibility of Afghans for TPS.[14] At the time, nearly 12,000 Afghans in the United States relied on TPS for protection from deportation and eligibility to work in the United States.[15] Many Afghan TPS recipients were Afghans evacuated in Operation Allies Welcome after the Taliban took control of Kabul.[16]

Without TPS, even Afghans who qualify for other forms of immigration relief could be barred from receiving immigration benefits and could lose their work authorization.[17] And Afghans who did not qualify for permanent relief to stay in the United States faced the threat of immediate deportation.

2. Other Executive Orders and Travel Ban-related Restrictions:

On June 10, 2025, President Trump issued a travel ban as to several countries, including Afghanistan, via Presidential Proclamation No. 10949.[18] This Proclamation identified twelve countries for which travel is fully restricted and seven for which travel is partially restricted.[19] Because Afghanistan is one of the twelve countries subject to a “full[ ] suspen[sion],” nationals of Afghanistan who, on or after June 9, 2025, were outside of the United States and did not have a valid visa already processed and in-hand as of that date, have generally been prohibited from entering the United States.[20]

The Proclamation originally exempted certain limited pathways, including immediate family immigrant visas and Afghan SIVs, although many practical obstacles otherwise associated with those pathways, such as processing delays, host-country cooperation, and medical requirements, remained.[21] However, these exemptions did not last. In November 2025, an Afghan national who arrived in the United States under Operation Allies Welcome, had an SIV application pending, and had been recently granted asylum was arrested for allegedly shooting two National Guard members in Washington D.C. [22]

After the shooting, Presidential Proclamation No. 10998 was issued in December 2025, instituting a travel ban that suspended visa issuance for Afghan nationals.[23] This Proclamation, which remains in effect today, eliminated the exception that Proclamation 10949 previously preserved for Afghan SIVs and immediate family immigrant visas.[24] Under Proclamations 10949 and 10998, the State Department restricted the use of “boarding foils”—documents issued by a United States embassy or consulate abroad that act as a temporary replacement for a damaged or misplaced Green Card to allow a Green Card holder to return to the United States. The State Department began denying the use of boarding foils to derivative asylees seeking family reunification, citing the authority of the travel-ban Proclamations. However, on July 29, 2026, in A.A. v. U.S. Dep’t of State, the United States District Court for the Eastern District of Virginia vacated as unlawful the State Department’s policy and held that the government must issue boarding foils to five derivative beneficiaries within 15 days and adjudicate two more without regard to the proclamations within 30 days.[25]

3. Agency Action:

In December 2025, United States Citizenship and Immigration Services published two policy memoranda ordering a hold on all pending I-589 asylum adjudications regardless of nationality, a hold on all pending USCIS immigration-benefit requests of all kinds involving people from 39 countries, including Afghanistan, and a re-review of approved benefits previously granted to individuals from these countries.[26] These memoranda were vacated by a federal court in June 2026, when the District of Rhode Island held in Dorcas International Institute of Rhode Island v. United States Citizenship and Immigration Services that USCIS did not have the authority to shut off adjudications for individuals who were already lawfully in the country.[27] USCIS appealed the order on June 12, 2026, but acknowledged that the memoranda were vacated pending further litigation development.[28] Further developments in this case will have far-reaching implications for the long-term ability of many Afghans in the United States to remain in the country lawfully.

4. Closure or Dismantling of Key Offices / Programs:

As a response to the withdrawal of United States forces from Afghanistan in 2021, the State Department established the Coordinator for Afghan Relocation Efforts (CARE) Office and Operation Enduring Welcome (OEW). CARE and OEW were responsible for relocation, reception and resettlement of Afghans who qualify for SIV, refugees, and those with other immigrant statuses, with OEW focusing more narrowly on Afghan nationals who assisted United States military efforts. The Office was codified by the Coordinator for Afghan Relocation Efforts Authorization Act of 2024 and was allocated funding for three years.[29] Notwithstanding this allocation, funding was terminated in mid-2025. From August 2021 through mid-2025—when the Enduring Welcome program shut down[30]—CARE and OEW managed the resettlement of more than 190,000 Afghan evacuees.[31] The closure of both programs is estimated to have affected 300,000 Afghans in need of assistance, many of whom remain stranded in states of limbo today.[32]

In April 2026, President Trump was reportedly in talks to send approximately 1,100 Afghans who helped the American war effort to the Democratic Republic of Congo (the DRC), rather than permitting them to resettle in the United States.[33] In June, more than 80 Congressional Representatives signed a letter urging Secretary Rubio to reconsider the DRC resettlement plan.[34] When asked whether the administration still planned to send the Afghans to DRC, Secretary Rubio responded that the United States was in talks with “multiple countries” about taking in the Afghan nationals.[35] It is not presently clear what action the administration will take in connection with the resettlement of these 1,100 Afghans, who include approximately 400 children.

In the 2027 budget proposal, no funding was requested for Afghan relocation or for Migration and Refugee Assistance. The proposal contains a $768 million cut to refugee resettlement programs generally, and funding previously allocated for humanitarian policy will be reallocated toward migration deterrence and repatriation.[36] The 2027 budget is scheduled to be finalized by Congress in October 2026. Additionally, the refugee resettlement cap for the year will be set at 17,500 but will only permit white South African refugees.[37]

5. Processing Delays and Uncertainty for SIV Applicants:

In early 2025, the Trump administration effected a freeze on the United States Refugee Admissions Program and related case processing.[38] In the year and a half since, thousands of would-be refugees and SIV applicants have been left in limbo, many remaining located in third countries such as Qatar, Albania, and other locations.[39] With the CARE Office’s closure, Afghan SIV and humanitarian parole applicants no longer have a dedicated coordinating office, which increases the risk of cases falling through, delays, and losing track of applicants.

Recent court decisions have required the continued processing of certain statuses. In addition to the Dorcas International case described above, for example, on February 6, 2026, a federal court found that the United States government may not suspend or halt the processing of Afghan SIV applications, because SIV processing is mandated by statute. However, the court also clarified that although SIV cases must continue to be processed, visa issuance and actual physical entry into the United States may still be suspended under the travel ban unless an exemption or national interest exception applies.[40]

Further, there is no government funding available for travel to facilitate the safe relocation for the limited number of Afghans who are not foreclosed from all legal pathways to the United States. On day one of the second Trump Administration, the State Department issued a freeze on all foreign aid for 90 days.[41] On January 25, 2025, flights were suspended for over 40,000 Afghans who were approved to travel to the United States for SIVs, having completed and received approval on the prerequisite steps.[42] No government spending has been renewed for Afghan applicants left midway through the lengthy processing period for a form of relief. Currently, there are logistical hurdles––many insurmountable and cost-prohibitive––for anyone coordinating these steps on their own. Afghan resettlement applicants not only have to pay out-of-pocket to travel to a third country with an American consular presence for visa processing, but also they are also required to determine how to stay in that third country by meeting local visa requirements, and self-fund all living expenses while processing occurs. Applicants will also then need to self-fund to travel to the United States when the SIV is finally approved.

IV. RISKS FOR AFGHANS ALREADY IN THE UNITED STATES

1. Risks to Afghan Parolees:

Many Afghans who previously entered the United States through humanitarian parole or another form of temporary status are now seeking some form of immigration relief that would allow them to remain in the United States with a pathway to permanent residency or citizenship. Others do not qualify for permanent forms of immigration relief but cannot return to Afghanistan and do not have anywhere else to go. In either scenario, today Afghans in the United States without permanent status face increased risk of deportation, as they have seen protections from removal limited or terminated.

In addition to TPS, many Afghans who entered the United States after the fall of Kabul and the withdrawal of the United States military were paroled into the country as recipients of humanitarian parole, allowing them to seek other forms of immigration relief. Recipients of humanitarian parole are eligible to receive a work permit, allowing them to work for the duration of their parole status.

In April 2025, many Afghan parolees received an email from the Department of Homeland Security, advising them that their parole would terminate in seven days. Shortly after, DHS sent a follow-up email, explaining the termination emails were sent “in error.”[43] However, individual parole terminations proceeded, and current parolees face the uncertain threat that their parole status may be terminated. While loss of parole status does not render an individual removable if they are protected by another status—such as TPS, a pending asylum application, or some form of permanent status—loss of parole has spread fear in the Afghan immigrant community and has been described as a tactic to confuse and intimidate Afghans into leaving the United States.

While parole terminations have been litigated in courts, parole approval rates and overall processing rates have sharply dropped off, leaving humanitarian parole as a significantly less viable option to seek safety in the United States.[44] Moreover, the Trump Administration recently implemented a $1,000 fee for parolees at the start of their parole and with every subsequent re-parole—a cost many may struggle to afford.[45]

In addition to loss of TPS or parole status, Afghans in the United States face risks as Immigration and Customs Enforcement has increased arrests and enforcement operations throughout the country. For example, on February 18, 2026, the Department of Justice filed a new Department of Homeland Security memorandum in federal court, entitled, “Detention of Refugees Who Have Failed to Adjust to Lawful Permanent Resident Status.” This memorandum sets out a nationwide policy allowing the arrest and detention of certain refugees who have not adjusted to lawful permanent resident status after one year in the United States—including those who tried but were unable to do so for reasons outside their control and despite their diligence. Pursuant to this memorandum, failure to file for adjustment or appear for inspection may now result in arrest, and a former paperwork compliance issue has expanded into a potential enforcement and custody event.[46]

2. Afghans in the American Workplace:

From 2021 through early 2026, SIVs carried work authorization.[47] The State Department issued approximately 160,000 Afghan SIVs through January 2026.[48] However, Afghans entering the United States by other means—e.g., on humanitarian parole, with TPS, or under a pending asylum application––did not automatically receive work authorization and would instead have to apply separately for work authorization.[49] Each pathway to work authorization provides for separate expiration cycles and renewal procedures—each of which American companies employing Afghans would be aware of.

The Office of Refugee Resettlement’s surveys of resettled Afghans found more than 60% employed in 2022 and more than 80% employed in 2023, with nearly two-thirds reporting that they could cover housing and household costs.[50] These employment statistics were concentrated in certain states—such as Texas, California, and Virginia—and particularly in metropolitan areas with established Afghan-American communities, such as Dallas-Fort Worth, Houston, Sacramento, the Bay Area, and Northern Virginia.[51] Large corporate employers with operations in these areas joined the Coalition for Afghan Refugees, which launched in September 2021, and committed to hiring, training, and mentoring Afghan employees, in partnership with Welcome.US.[52] Accommodations included language interpreters at the workplace and utilizing Afghan-dedicated job application portals.[53]

However, in the second Trump administration, the formerly clear frameworks for employment of Afghans has largely dissolved, leaving resulting uncertainty for employers of Afghans in the United States. On October 30, 2025, the Department of Homeland Security issued a rule eliminating the automatic extension of employment authorization for most renewal applicants, such that a timely filed Form I-765 would no longer bridge the gap while USCIS adjudicates renewal applications.[54]

Additionally, the USCIS pause on asylum adjudications extends to Forms I-765 and other employment authorization application and renewal-related forms.[55] The District of Rhode Island vacated those policies under the Administrative Procedure Act on June 5, 2026 in Dorcas International Institute of Rhode Island v. USCIS, denied a stay pending appeal on July 15, 2026, and on August 14, 2026 the First Circuit partially stayed that ruling — permitting USCIS to resume re-reviewing approved benefits for post–January 20, 2021 entrants while leaving the remainder of the vacatur intact.[56] For employers, the effect is that an Afghan employee’s continued work authorization may now turn on the pending federal appeal. With such unpredictable renewal timing and lack of auto-extension safety net, employers face risks when continuing to employ workers whose authorization has lapsed or may lapse before their renewal is adjudicated. Employers may resultingly become reluctant to hire Afghan candidates, despite the INA’s prohibition of discrimination on the basis of citizenship status or national origin discrimination for those lawfully present in the United States.[57]

V. WHAT TO WATCH

1. Proposed Legislation:

In response to public pressure associated with the narrowed pathways to safety and lawful status for Afghan allies, bipartisan legislation has recently been introduced to assist in filling the gap for certain Afghan nationals who may have claims for relief in the United States.

A. Afghanistan TPS Act of 2026:

On July 23, 2026, Representatives Jason Crow (D-Colorado), Sam Liccardo (D-California), Don Bacon (R-Nebraska), and María Elvira Salazar (R-Florida) introduced the Afghanistan TPS Act of 2026, H.R. 9899, which was referred to the House Committee on the Judiciary.[58] A Senate companion was introduced on August 6, 2026.[59] The bill would restore by statute the TPS protection DHS terminated, effective July 14, 2025, and place it beyond the reach of a subsequent unilateral executive reversal.[60]

Key provisions include:

Treating Afghanistan as designated for Temporary Protected Status under 8 U.S.C. § 1254a, for an initial period running from enactment through July 1, 2029;
Directing USCIS to receive and process TPS applications and associated applications for employment authorization, and to complete adjudication of each application within 90 days of receipt;
Waiving filing fees and granting advance consent for emergency travel abroad; and
Requiring collection of biometric and biographic information and criminal and national-security background checks for all applicants.

B. ARCH Act and FY2027 National Defense Authorization Act:

On August 7, 2026, Senators Mike Rounds (R-SD), Amy Klobuchar (D-MN), Chris Coons (D-DE), and Thom Tillis (R-NC) introduced the ARCH Act, the standalone companion to Section 1080 of the Senate’s FY2027 NDAA.[61] The bill would direct the Department of Defense to build a secure online portal within 180 days of enactment to verify and preserve service records and biometric data for at-risk Afghan allies who served at least one year between December 22, 2001 and September 1, 2021, including Afghan special operations forces, the Afghan National Army Special Operations Command, the Afghan Air Force, the Special Mission Wing, female members of any Afghan security force, human intelligence sources, counterterrorism and counternarcotics personnel, judges and prosecutors, and senior Ministry of Defense and Ministry of Interior officials. Applications would be accepted from outside the United States, including from within Afghanistan; a designee could apply on an individual’s behalf; no fees could be charged; denials would carry one right of appeal within 120 days; and the program would run for a minimum of ten years.[62]

2. Announced Closure of Camp As Sayliyah:

Camp As Sayliyah in Qatar houses approximately 1,100 vetted Afghan allies and their families—including more than 150 immediate family members of United States military personnel—who were transported by the United States government while awaiting admission to the United States. In January 2026, the State Department notified Congress of its intent to relocate all Afghans from the camp by March 31, 2026 and to fully demobilize the site by the end of fiscal year 2026, on September 30, 2026.[63] The March 31 date passed without relocation, and residents have recently reported that they still have not been told which third countries, if any, are willing to receive them.[64]

3. Refugee Admissions and FY2027 Presidential Determination:

The FY2026 refugee admissions ceiling was set at 7,500—the lowest in the history of the program—with admissions primarily allocated to Afrikaners from South Africa. On May 21, 2026, an emergency determination raised the FY2026 ceiling to 17,500, again allocating the increase to Afrikaners from South Africa.[65] The FY2027 Presidential Determination, expected around September 2026, is the next scheduled opportunity for a change in allocation and is worth watching closely.

4. FY2027 National Defense Authorization Act:

The FY2027 NDAA has separate versions in the House and Senate. The Senate bill (S. 4784)[66] contains two Afghan-specific provisions not included in the House bill: Section 1088, which would bar the Pentagon from using authorized funds to transfer Camp As Sayliyah residents to Afghanistan or to any third country from which they could be returned; and Section 1080, or the ARCH Act described above. The House bill (H.R. 8800)[67] was passed on July 22, 2026, and only contains a one-year extension of the Afghanistan War Commission’s reporting deadline (Section 1213) and a prohibition on the use of Department of Defense funds to support the Taliban (Section 1214).[68]

VI. CONCLUSION

When the Taliban regained control of Afghanistan five years ago, there were multiple pathways to obtaining refugee or other temporary protected status in the United States for Afghans at risk, as well as viable paths forward to permanent lawful status and citizenship. However, many of those pathways are now closed, paused, or rapidly narrowing. Restrictive travel bans, processing pauses and backlogs, funding cuts, and closure of agency offices focused on resettlement are particularly significant. And long-term processing delays, coupled with the anticipated absence of funding for Afghan resettlement and immigration applications in FY 2027, suggests that these problems are not soon to resolve.

Several new bills have been introduced to protect Afghan nationals, but each of these bills remain in the early stages. The five-year mark of this crisis is not a conclusion. The legal landscape has changed considerably since August 2021, and it continues to change. Gibson Dunn remains committed to helping Afghan allies and their families pursue every avenue that remains open to them.

View a video on Gibson Dunn’s response to the humanitarian crisis in Afghanistan below:

[1] Operation Allies Welcome, Dep’t of Homeland Sec., https://www.dhs.gov/archive/operation-allies-welcome.

[2] https://Welcome.US; Washington Journal, Nazanin Ash on Refugee Resettlement Efforts in U.S., C-SPAN, Dec. 22, 2021, https://www.c-span.org/program/washington-journal/nazanin-ash-on-afghan-refugee-resettlement-efforts-in-us/606683.

[3] Special Immigrant Visas for Afghans – Who Were Employed by/on Behalf of the U.S. Government, U.S. Dep’t of State, https://travel.state.gov/content/travel/en/us-visas/immigrate/special-immg-visa-afghans-employed-us-gov.html.

[4] Afghan Frequently Asked Questions, U.S. Dep’t of State, https://travel.state.gov/content/travel/en/us-visas/immigrate/special-immg-visa-afghans-employed-us-gov/afghan-faq.html.

[5] Frequently Asked Questions About Parole Requests for Afghans Based on Urgent Humanitarian Reasons and or Significant Public Benefit Parole for Afghans, U.S.C.I.S., https://www.uscis.gov/humanitarian/humanitarian-or-significant-public-benefit-parole-for-aliens-outside-the-united-states/information-for-afghan-nationals-on-requests-to-uscis-for-humanitarian-parole/frequently-asked-questions-about-parole-requests-for-afghans-based-on-urgent.

[6] Jeanne Batalova and Julian Montalvo, Afghan Immigrants in the United States, Migration Policy Institute (Feb. 15, 2024), https://www.migrationpolicy.org/journal/spotlight/afghan-immigrants-united-states.

[7] Temporary Protected Status, U.S.C.I.S., https://www.uscis.gov/humanitarian/temporary-protected-status.

[8] 87 Fed. Reg. 30976.

[9] 88 Fed. Reg. 65728.

[10] 90 Fed. Reg. 20311.

[11] 8 U.S.C. § 1101(a)(42); Refugees, U.S.C.I.S., https://www.uscis.gov/humanitarian/refugees-and-asylum/refugees; The United States Refugee Admissions Program (USRAP) Consultation and Worldwide Processing Priorities, U.S.C.I.S., https://www.uscis.gov/humanitarian/refugees-and-asylum/usrap.

[12] Am I eligible for the new Afghan refugee program?, International Refugee Assistance Project, https://support.iraplegalinfo.org/hc/en-us/articles/4404608797588-Am-I-eligible-for-the-new-Afghan-refugee-program#:~:text=P%2D1%2C%20or%20Priority%201,for%20a%20P%2D1%20referral.

[13] Asylum, U.S.C.I.S., https://www.uscis.gov/humanitarian/refugees-and-asylum/asylum.

[14] 90 Fed. Reg. 20309.

[15] Id.

[16] TPS for Afghanistan Expires, Leaving Thousands at Risk of Deportation and Job Loss, Global Refuge (Jul. 21, 2025), https://globalrefuge.org/news/tps-for-afghanistan-expires/.

[17] Over 2 Million Work Authorizations in Jeopardy Following Immigration Actions, Nat’l Imm. Forum (Jul. 10, 2025), https://forumtogether.org/article/over-2-million-work-authorizations-in-jeopardy-following-immigration-enforcement-announcements/; see infra Section IV.2.

[18] Restricting the Entry of Foreign Nationals To Protect the United States From Foreign Terrorists and Other National Security and Public Safety Threats, 90 Fed. Reg. 24497 (Jun. 4, 2025), https://www.federalregister.gov/documents/2025/06/10/2025-10669/restricting-the-entry-of-foreign-nationals-to-protect-the-united-states-from-foreign-terrorists-and

[19] The Proclamation “fully restrict[s] and limit[s] the entry of nationals of the following 12 countries: Afghanistan, Burma, Chad, Republic of the Congo, Equatorial Guinea, Eritrea, Haiti, Iran, Libya, Somalia, Sudan, and Yemen.” The Proclamation “partially restrict[s] and limit[s] the entry of nationals of the following 7 countries: Burundi, Cuba, Laos, Sierra Leone, Togo, Turkmenistan, and Venezuela.” Id.

[20] Id.

[21] Id.

[22] Brian Mann, National Guard shooting suspect served in CIA counterterrorism unit, group says, NPR (Nov. 27, 2025), https://www.npr.org/2025/11/27/nx-s1-5623041/national-guard-shooting-suspect-cia-unit-afghanistan.

[23] Restricting and Limiting the Entry of Foreign Nationals To Protect the Security of the United States, 90 Fed. Reg. 59717 (Dec. 16, 2025), https://www.whitehouse.gov/presidential-actions/2025/12/restricting-and-limiting-the-entry-of-foreign-nationals-to-protect-the-security-of-the-united-states/.

[24] Id.

[25] A.A. v. U.S. Dep’t of State, No. 25 Civ. 1819 (AJT), ECF No. 128 (E.D. Va. Jul. 29, 2026).

[26] Policy Memo. 602-0192, USCIS (Dec. 2, 2025), https://www.uscis.gov/sites/default/files/document/policy-alerts/PM-602-0192-PendingApplicationsHighRiskCountries-20251202.pdf; Policy Memo. 602-0194, USCIS (Jan. 1, 2026), https://www.uscis.gov/sites/default/files/document/policy-alerts/PM-602-0194-PendingApplicationsAdditionalHighRiskCountries-20260101.pdf

[27] Dorcas Int’l Inst. of Rhode Island v. United States Citizenship & Immigr. Servs., 2026 WL 1622708 (D.R.I. Jun. 5, 2026), judgment entered, 2026 WL 1695954 (D.R.I. Jun. 11, 2026).

[28] Court Order on Hold Policies, U.S.C.I.S., https://www.uscis.gov/newsroom/alerts/court-order-on-hold-policies.

[29] H.R. 8368 – Coordinator for Afghan Relocation Efforts Authorization Act of 2024, 118th Cong. (2024).

[30] Paul Guaglianone, Congressional Notification Transmittal Letter (25-032), U.S. Dep’t of State, https://drive.google.com/file/d/1diYLDtG8zJVKDjckog3q40YuFLT_0TUR/view.

[31] Technical Supplement to the 2026 Budget, Appendix, Office of Management and Budget (2025).

[32] Riley Cedar, Trump Administration Plans to End Afghan Relocation Programs, Military Times (Jun. 2, 2025), https://www.militarytimes.com/news/your-military/2025/06/02/trump-administration-to-end-afghan-relocation-programs/.

[33] Megha Rajagopalan, Eileen Sullivan, and Zolan Kanno-Youngs, Trump is Said to be in Talks to Send Afghans Who Aided U.S. Forces to Congo, N.Y. Times, Apr. 21, 2026, Trump Is Said to Be in Talks to Send Afghans Who Aided U.S. Forces to Congo – The New York Times.

[34] Reuters, US Lawmakers Demand Trump Officials Halt Plan to Send Afghans to DRC, The Guardian, Jun. 11, 2026, US lawmakers demand Trump officials halt plan to send Afghans to DRC | Afghanistan | The Guardian.

[35] Id.

[36] See Budget of the U.S. Gov., OMB, FY2027, whitehouse.gov/wp-content/uploads/2026/04/budget_fy2027.pdf; Fact Sheet: 2027 White House Budget Proposal, AfghanEvac, FACT SHEET: FY2027 Budget — #AfghanEvac.

[37] Rebecca Santana and Seung Min Kim, Trump administration raises US refugee cap, but only for white South Africans, AP News (May 26, 2026), https://apnews.com/article/trump-refugees-white-south-africa-border-cap-bfe3974adf6c655eca7a5c30c1f9197f.

[38] Realigning the United States Refugee Admissions Program, The White House, Jan. 20, 2025, https://www.whitehouse.gov/presidential-actions/2025/01/realigning-the-united-states-refugee-admissions-program/.

[39] Global Refuge, The Afghan Special Immigrant Visa Program 2 (Feb. 2025), https://www.globalrefuge.org/wp-content/uploads/2025/02/SIV-FAQ-1.pdf

[40] Travel ban explainer: Travel and Visa Restrictions Affecting Afghans, AfghanEvac (Feb. 16, 2026) Travel Ban — #AfghanEvac.

[41] Exec. Order No. 14169, 90 Fed. Reg. 8459 (Jan. 30, 2025), https://www.whitehouse.gov/presidential-actions/2025/01/reevaluating-and-realigning-united-states-foreign-aid/.

[42] Jonathan Landay, Exclusive: Flights Halted for Afghans Approved for Special US Visas, Advocate and Official Say, Reuters (Jan. 25, 2025), https://www.reuters.com/world/us/flights-halted-afghans-approved-special-us-visas-advocate-official-say-2025-01-25/#:~:text=WASHINGTON%2C%20Jan%2025%20(Reuters),and%20jobs%20in%20the%20U.S.

[43] Newsletter Regarding DHS Retraction on Refugee Parole Status, Nowruz Media (Apr. 12, 2025), https://nowruzmedia.com/en/2025/04/dhs-retraction-on-refugee-parole-status/.

[44] Trump Administration Imposes $1,000 Fee on Immigrants Seeking Parole, NOTUS (Oct. 15, 2025), https://www.notus.org/immigration/trump-administration-fee-immigrants-parole-asylum.

[45] USCIS Implements New Immigration Parole Fee Required by H.R. 1, U.S.C.I.S. (Oct. 15, 2025), https://www.uscis.gov/newsroom/alerts/uscis-implements-new-immigration-parole-fee-required-by-hr-1.

[46] See USCIS ICE Chamorro Memo Rescission Explainer, AfghanEvac (Feb. 18, 2026) USCIS ICE Chamorro Memo Rescission Explainer — #AfghanEvac.

[47] U.S. Dep’t of State, Report to Congress on an Update to the Status of the Afghan Special Immigrant Visa Program (May 2026), https://www.state.gov/wp-content/uploads/2026/05/Report-An-Update-to-the-Status-of-the-Afghan-Special-Immigrant-Visa-Program-007276-HRC1390.pdf.

[48] Id.

[49] USCIS, Information for Afghan Nationals, https://www.uscis.gov/humanitarian/information-for-afghan-nationals; Immigrant Law Center of Minnesota, Fact Sheet: Temporary Protected Status for Afghanistan, https://www.ilcm.org/latest-news/fact-sheet-temporary-protected-status-for-afghanistan-3/.

[50] ORR’s Resettled Afghan Surveys Reflect High Employment but Needs Remain, Admin. for Children & Families (Oct. 2023), https://acf.gov/archive/blog/2023/10/media/orrs-resettled-afghan-surveys-reflect-high-employment-needs-remain.

[51] Camilo Montoya-Galvez, Here’s Where Afghan Evacuees Have Resettled in the U.S., CBS News (Feb. 24, 2022), https://www.cbsnews.com/news/afghan-evacuees-resettled-us-texas-california-virginia/; see also see also Marketplace, Five Years After the Afghan Evacuation, Thousands Have Built Careers and Businesses (Aug. 19, 2026), https://www.marketplace.org/story/2026/08/19/five-years-after-afghan-evacuation-thousands-have-built-careers-and-lives.

[52] Press Release, Tent P’ship for Refugees, 30+ Major Companies Join the Tent Coalition for Afghan Refugees (Sep. 21, 2021), https://www.prnewswire.com/news-releases/30-major-companies-join-the-tent-coalition-for-afghan-refugees-301381375.html; HR Dive, How Employers Can Set Up Immigrant and Refugee Hires for Success, https://www.hrdive.com/news/hiring-for-potential-language-learning/623085/.

[53] Tent Partnership for Refugees, U.S. Employers’ Guide to Hiring Afghan Refugees, https://www.tent.org/resources/us-employers-guide-to-hiring-afghan-refugees/; ERE, The Recruiting of Refugees, https://www.ere.net/articles/the-recruiting-of-refugees.

[54] Removal of the Automatic Extension of Employment Authorization Documents, 90 Fed. Reg. 48800 (Oct. 30, 2025), https://www.federalregister.gov/documents/2025/10/30/2025-19702/removal-of-the-automatic-extension-of-employment-authorization-documents; USCIS, DHS Ends Automatic Extension of Employment Authorization, https://www.uscis.gov/newsroom/news-releases/dhs-ends-automatic-extension-of-employment-authorization.

[55] USCIS Policy Memorandum PM-602-0192 (Dec. 2, 2025); Ogletree Deakins, USCIS Pauses Benefit Requests for Nationals From ‘High-Risk’ Countries and Halts Asylum Adjudications (Dec. 12, 2025), https://ogletree.com/insights-resources/blog-posts/uscis-pauses-benefit-requests-for-nationals-from-high-risk-countries-and-halts-asylum-adjudications/; Jackson Lewis, USCIS Widens Freeze on Immigration Benefits for Nationals of 19 Countries (Dec. 12, 2025), https://www.globalimmigrationblog.com/2025/12/uscis-widens-freeze-on-immigration-benefits-for-nationals-of-19-countries-employers-should-expect-delays-across-multiple-categories/.

[56] Dorcas Int’l Inst. of R.I. v. USCIS, No. 1:26-cv-00132 (D.R.I.), appealed, No. 26-1703 (1st Cir.); #AfghanEvac, Dorcas, https://afghanevac.org/dorcas.

[57] See Immigration and Nationality Act § 274B, 8 U.S.C. § 1324b.

[58] Crow Introduces Bill to Grant Vulnerable Afghans Temporary Protected Status (Jul. 23, 2026), https://crow.house.gov/media/press-releases/crow-introduces-bill-to-grant-vulnerable-afghans-temporary-protected-status.

[59] Senator Coons, Murkowski introduce bipartisan bill to use Temporary Protected Status to help vulnerable Afghans in the United States (Jul. 23, 2026), https://www.coons.senate.gov/news/press-releases/senators-coons-murkowski-introduce-bipartisan-bill-to-use-temporary-protected-status-to-help-vulnerable-afghans-in-the-united-states/.

[60] Afghanistan TPS Act of 2026, H.R. 9989, 119th Cong. (2026).

[61] Rounds Introduce Bipartisan Bill to Preserve Records for At-Risk Afghan Allies (Aug. 10, 2026), https://www.rounds.senate.gov/newsroom/press-releases/rounds-introduces-bipartisan-bill-to-preserve-records-for-at-risk-afghan-allies.

[62] Afghan Ally Records and Credential Heritage of 2026, S. ___, 119th Cong. (2026), https://www.rounds.senate.gov/imo/media/doc/arch_act.pdf.

[63] US to Close Camp That Housed Afghans Who Fled Their Country, Bloomberg (Jan. 1, 2026), https://www.bloomberg.com/news/articles/2026-01-15/us-to-close-camp-that-housed-afghans-who-fled-their-country.

[64] Trump Team Pushes to Relocate Afghans in Limbo on U.S. Mideast Base, WSJ (Apr. 7, 2026), https://www.wsj.com/politics/policy/trump-team-pushes-to-relocate-afghans-trapped-in-limbo-on-u-s-mideast-base-8f6af27f.

[65] 91 FR 31645, Emergency Presidential Determination on Refugee Admissions for Fiscal Year 2026 (May 21, 2026).

[66] S. 4784 – Nat’l Def. Auth. Act for FY2027, 119th Cong. (2026).

[67] H.R. 8800 – Nat’l Def. Auth. Act for FY2027, 119th Cong. (2026).

[68] What Both Defense Bills Mean for Afghan Allies, AfghanEvac (Jul. 22, 2026), https://afghanevac.org/2027-ndaa.

The following Gibson Dunn lawyers prepared this update: Katie Marquart, Stuart Delery, Matthew Rozen, Ariana Sanudo, Rachel Katzin, Farha Hanif, Kayla Jahangiri, and Gracie Maynetto.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, any leader or member of the firm’s Pro Bono, Public Policy, Administrative Law & Regulatory, Appellate & Constitutional Law, or Labor & Employment practice groups, or the following members of the firm’s Immigration Task Force:

Stuart F. Delery – Co-Chair, Administrative Law & Regulatory Practice,
Washington, D.C. (+1 202.955.8515, sdelery@gibsondunn.com)

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Washington, D.C. (+1 202.887.3559, nfarrell@gibsondunn.com)

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Betty X. Yang – Partner & Co-Chair, Trials Practice,
Dallas (+1 214.698.3226, byang@gibsondunn.com)

We are pleased to provide you with Gibson Dunn’s ESG Risk, Litigation, and Reporting update covering the following key developments during July 2026. Please click on the links below for further details.

I. GLOBAL

The International Organization for Standardization and the Greenhouse Gas Protocol announce plans to consolidate their corporate greenhouse gas accounting standards

On July 29, 2026, the Greenhouse Gas Protocol (GHG Protocol) announced that it and the International Organization for Standardization (ISO) will consolidate their corporate carbon accounting standards into a single, co-branded standard. This announcement follows the strategic partnership that GHG Protocol and ISO established in 2025 as a key milestone of the COP30 Action Agenda. In connection with the announcement, GHG Protocol released a Standard Development Plan for the integration of the standards. The consolidated standard will bring together GHG Protocol’s Corporate Standard, Scope 2 Standard, Scope 3 Standard, and Actions and Market Instruments (AMI) framework with ISO 14064-1, with the aim of reducing duplication, simplifying reporting, and providing a coordinated consultation process. The organizations plan to conduct an integrated public consultation in the second quarter of 2027 and publish the consolidated standard in the fourth quarter of 2028.

The GHG Protocol announces results of public consultation on Scope 2 standard and AMI workstream

GHG Protocol also announced two related developments on the same day. It published the results of the public consultation on its Scope 2 standard, which received nearly 1,100 responses from more than 50 countries. The responses reflected differing stakeholder views on the treatment of electricity purchases and how they should be reflected in greenhouse gas accounting, but broad support for improving the transparency and alignment of electricity emissions accounting. GHG Protocol will next work with the Independent Standards Board and Technical Working Group to revise the draft standard. GHG Protocol also reported preliminary responses from the Request for Information on its AMI workstream, which addresses reporting of “actions” and “market instruments” used by organizations under a multi-statement reporting structure. Initial responses showed support for (i) a multi-statement reporting structure, (ii) a market-based inventory approach, and (iii) a statement for reporting the greenhouse gas impacts of actions. The Scope 2 and AMI workstreams will proceed simultaneously.

Other highlights:

On July 15, 2026, the Science Based Targets initiative (SBTi) opened a second public consultation on its revised draft Power Sector Net-Zero Standard, which incorporates feedback from its first consultation and additional research and input from its Expert Working Group. The consultation closes September 7, 2026, and a parallel pilot program will test the draft standard using participating companies’ data before the standard is submitted for Technical Council approval and adoption by SBTi’s Board of Trustees.
On July 27, 2026, Verra launched a new carbon project registry, powered by S&P Global Energy, which it described as “the most significant user experience upgrade in [its] history.” The registry is integrated with the Verra Project Hub, allowing users to track projects in one place throughout their lifecycle. Verra expects later phases of the registry to add enhanced Paris Agreement Article 6 functionality and data API services, as well as greater integration with various market participants.

II. UNITED KINGDOM

Office for Equality and Opportunity opens consultation on equal pay

On July 14, 2026, the United Kingdom’s (UK) Office for Equality and Opportunity published a consultation on equal pay and pay discrimination. The consultation will be open for 15 weeks, closing on October 27, 2026.

The consultation invites responses from anyone interested in or affected by the relevant issues. Specifically, it welcomes views from those most affected by the measures, such as employers, trade unions, public sector bodies, women’s sector, race and disability stakeholders, legal experts, and individuals with lived experience of pay discrimination.

The consultation seeks input from stakeholders regarding policy proposals designed to deliver the following commitments:

make the right to equal pay effective for ethnic minority and disabled people;
establish an equal pay regulation and enforcement unit with the involvement of trade unions; and
ensure that outsourcing services can no longer be used by employers to avoid providing equal pay.

The consultation also seeks views on related pay transparency proposals, for example, publishing pay information in job advertisements and tougher equal pay audits where these are proportionate and effective in supporting a preventative approach to pay equality.

Revised Equality and Human Rights Commission statutory Code of Practice comes into force

On July 15, 2026, the Equality Act 2010 (Code of Practice on Services, Public Functions and Associations) (Revocation) Order 2026 and the Equality Act 2010 (Code of Practice on Services, Public Functions and Associations) (the Code) (Commencement) Order 2026 were published.

The Code came into effect on August 5, 2026. The Code explains how the Equality Act 2010 (EA 2010) applies in practice. The most significant changes reflect the UK Supreme Court’s April 2025 ruling that the terms “sex”, “woman”, and “man” in the EA 2010 are to be understood by reference to biological sex. On restroom facilities, the Code states that where a provider chooses to offer a separate or single-sex service but allows transgender people to use the service intended for the opposite sex, the service ceases to be separate or single-sex under the Equality Act 2010, and the provider is very likely to be unlawfully discriminating against other users.

Code-compliant options are single-user, lockable unisex facilities open to everyone, or single-sex spaces which are not open to transgender people. In most cases, we expect that a reasonable approach would be to provide a mixture of both options reflecting the number of each type of relevant service user, which falls within the separate-facilities requirements in the Workplace (Health, Safety and Welfare) Regulations 1992.

UK government’s Department for Environment, Food and Rural Affairs publishes delivery plan for “30by30” land protection target

On July 13, 2026, the UK government’s Department for Environment, Food and Rural Affairs (Defra) published its delivery plan to outline how it will achieve the UK’s target to “conserve and manage” 30% of land and inland waters as it applies to land in England by 2030 (30by30).

The plan outlines a tiered approach for assessing areas of land to contribute to 30by30 as well as an explanation of how the criteria will be applied in assessing land. The plan also provides other actions to make it easier for landowners to help deliver 30by30 on the ground and other actions the UK government is taking to strengthen efforts in delivering 30by30.

The delivery plan notes that Defra’s latest analysis identifies that land covering around 32% of England is either already likely to, or has the potential to, contribute to the 30by30 target.

III. EUROPE

New draft of reporting standards for non-EU groups (formerly N-ESRS, now ESRS-40a) published

On July 23, 2026, the European Financial Reporting Advisory Group (EFRAG) released its Exposure Draft of the European Sustainability Reporting Standards for certain Non-EU Undertakings (ESRS-40a), formerly referred to as the non-EU ESRS (N-ESRS). For further details, see our May 2026 and June 2026 ESG Updates. The ESRS-40a set out the proposed reporting requirements for large non-EU entities with significant operations in the EU. EFRAG estimates that there are approximately 1,200 such entities that fall within the scope of the Corporate Sustainability Reporting Directive (CSRD) by virtue of their EU operations that could be subject to the ESRS-40a. The reporting obligation notably rests solely with the EU entity/branch and first applies for financial years beginning on or after January 1, 2028. Following the “Omnibus I” simplification package, the reporting obligation covers non-EU groups with EU net revenue exceeding EUR 450 million in each of two consecutive financial years that also have an EU subsidiary or branch with revenue exceeding EUR 200 million.

Impact materiality only (single materiality): In contrast to the double materiality standard (financial and impact materiality) under the ESRS, the ESRS-40a focus exclusively on impact, or single, materiality. Reporting under the ESRS-40a would, therefore, cover only a group’s impacts on people and the environment, and not the impacts on the group of sustainability-related risks, opportunities, resilience, and dependencies.
Limitation to EU-related impacts: The exposure draft provides for a “mixed approach” under which a group may limit its impact disclosures to EU-related impacts for all topics other than climate change and the cross-cutting general disclosures, which would still have to be reported on a global basis.

EFRAG has launched a 100-day public consultation on the exposure draft, which closes on October 31, 2026, and intends to deliver its technical advice to the European Commission by January 2027.

In a comment letter regarding the Corporate Sustainability Due Diligence Directive, as amended (CSDDD) published on August 14, 2026, the U.S. Ambassador to the EU called on the EU to further reduce the burden of the CSRD and the CSDDD on U.S. companies, stating that the U.S. would “take any actions necessary to address unreasonable burdens on U.S. commerce absent a solution that addresses these concerns.”

Report on CSRD/ESRS reporting practice published by EFRAG

On July 1, 2026, EFRAG published its second State of Play report, entitled “Implementation of European Sustainability Reporting Standards: FY2025 Observed Practices,” an evidence-based assessment of more than 900 sustainability statements for the financial year 2025 (FY 2025), predominantly prepared by EU-listed companies. The report evaluates the sustainability statements against a set of 18 questions, which have been expanded relative to the inaugural edition, and now cover double materiality assessment methodology, the linkage of material topics to executive incentive schemes, the geographic disaggregation of environmental metrics, and — for the first time — governance disclosures under ESRS G1.

Sweden (14%), Germany (12%), and France (11%) account for the largest geographic shares of the analysis, which also includes 26 statements from non-EU undertakings (excluding Norway). The report presents the results broken down by jurisdiction and sector, with manufacturing (36%), financial & insurance services (20%), and information & communication (10%) representing the largest sectors.

Overall, the report identified the following themes:

Material topics and impacts, risks and opportunities (IROs): Preparers identify on average 6.4 of the ten topical ESRS as material, with ESRS E1 Climate Change, ESRS S1 Own Workforce, and ESRS G1 Business Conduct remaining the standards most commonly considered material. The non-EU statements broadly mirror this. FY 2025 statements identify, on average, 30 IROs, almost 60% of which are concentrated in E1 (6.3), S1 (6.5), and G1 (4.2), with non-EU companies reporting fewer IROs in each of those standards.
Targets and executive incentives: The report identifies a gap between declared materiality and strategic commitment: measurable targets are set for only half of the material topics (3.3 of 6.4 on average), and only 63% of preparers embedded sustainability targets in executive incentive schemes.
Double materiality assessment (DMA): 82% of preparers updated their assessment relative to their FY 2024 reports, with a hybrid methodology combining bottom-up and top-down elements emerging as the dominant approach (67%), ahead of purely bottom-up (28%) and top-down (5%) approaches.
Climate transition plan: The share of companies disclosing a climate transition plan rose from 55% to 69%, with 57% disclosing near- and long-term decarbonization targets compatible with a 1.5°C pathway.
Report length: The average length of sustainability statements decreased from 115 to 95 pages, which EFRAG attributes to a combination of sample composition and growing familiarity with the ESRS framework.

France: Oil and gas company to appeal Paris Judicial Court ruling requiring inclusion of Scope 3 emissions in its duty of vigilance risk mapping

As reported in our June 2026 ESG Update, on June 25, 2026, the Paris Judicial Court partially granted claims brought by NGOs and supported by the City of Paris against a French oil and gas company (the Company) under France’s 2017 duty of vigilance law (LDV).

The Company announced on July 27, 2026, that it will appeal the portion of the judgment addressing the LDV claim. In particular, the Company is challenging the court’s findings that climate-related risks fall within the scope of the LDV and that Scope 3 emissions associated with customers’ use of the Company’s products constitute adverse impacts arising from the Company’s own activities.

The appeal also challenges the resulting injunction requiring the Company, within six months, to include Scope 3 emissions and related mitigation measures in the risk mapping contained in its vigilance plan.

Because the injunction was ordered to be provisionally enforceable, the filing of the appeal does not suspend the Company’s obligation to comply. To date, no appeal by the NGOs appears to have been publicly announced. A hearing before the pre-trial judge is scheduled for January 21, 2027 to review the Company’s updated vigilance plan (first instance jurisdiction).

France: Landmark greenwashing decision finds a mineral water bottling company liable for misleading commercial practices

On June 23, 2026, the Paris Judicial Court found a French mineral water bottling company (the Company), a subsidiary of a major international food and beverage group, liable for misleading commercial practices under Articles L. 121-1 et seq. of the French Consumer Code, on account of the claims “carbon neutral,” “100% recycled” and “100% recyclable” displayed on its bottles. This is the first French decision [finding liability for the use of the terms “carbon neutral” and “100% recyclable” on a mass-market consumer product. The proceeding was brought in October 2021 by a leading French consumer rights association.

Regarding the carbon neutrality claims, the Court held that, when used alone and without explanatory information or quantitative data, the terms do not allow consumers to understand whether neutrality results from emission reductions, offsetting, or a combination of both, nor in what proportions. The Court further found that the reference to “certified” reinforced the impression that an objective balance had actually been achieved.

Regarding the packaging claims, the Court found that the label, cap, handles, glues, and inks were not made from recycled material, such that the use of “100%” was misleading, and that polyethylene terephthalate can only be recycled a limited number of times, such that the claims “100% recyclable” and “always recyclable” were inaccurate. The claims were held likely to materially distort consumer behavior, as they could be decisive, not as to whether to purchase bottled water in the first place, but as to the choice of this brand over its competitors.

Notably, the Court applied France’s existing misleading commercial practices regime interpreted in light of the new European Directive (EU) 2024/825 (Empowering Consumers for the Green Transition) prior to its transposition, which becomes applicable from September 2026. The Company was ordered to pay EUR 75,000 in damages for collective harm to consumers, EUR 10,000 in costs, and to publish the judgment on the homepage of its website for six months. The parent group has announced that it will appeal the decision.

Other highlights:

On July 1, 2026, the European Securities and Markets Authority (ESMA) as well as the European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) published proposals to simplify EU Taxonomy Key Performance Indicator (KPI) disclosure requirements for companies, asset managers, banks, and insurers as part of the Omnibus I simplification agenda. Each consultation closed on August 12, 2026.
On August 3, 2026, the European Commission published its second edition of Packaging and Packaging Waste Regulation (PPWR) – Frequently Asked Questions, providing new and updated guidance for economic operators, including on key definitions of, for example, “manufacturer” and “producer,” on topics surrounding Substances of Concern (SoC), on manufacturers’ obligations such as the treatment of pre-existing packaging stock, and generally stating a supportive initial enforcement approach – shortly before the PPWR’s general application date of August 12, 2026.
Transposition Tracker: An overview of the current transposition status of the CSRD into national laws and the “Stop-the-Clock” process under the Omnibus simplification package can be found here.

IV. NORTH AMERICA

The Canadian Climate Institute opens consultation on draft sustainable finance taxonomy methodology

On July 9, 2026, the Canadian Climate Institute and Business Future Pathways, working in collaboration with the independent Canadian Taxonomy and Transition Planning Council (the Council), released the draft Canadian Sustainable Finance Taxonomy: Methodology Report for public comment. As discussed in our December 2025 and April 2026 ESG Updates, the Canadian government has mandated that the Canadian Climate Institute and Business Future Pathways develop taxonomy guidelines for six sectors, under the oversight of the Council, by 2027. The report proposes the foundational methodology for the Sustainable Finance Taxonomy, designed to “establish credible and standardized definitions for climate-aligned investments.” The initial phase focuses on climate mitigation, and technical screening criteria are informed by Canada’s target of net-zero emissions by 2050. The taxonomy will encourage the use of entity-level criteria such as climate-related disclosures, transition plans, and net-zero targets, but these will not be prerequisites for determining whether an investment is taxonomy-aligned.

The proposed framework would establish three categories of economic activities that are eligible for inclusion in the taxonomy: (i) “green” activities, comprising climate solutions with zero- or near-zero-emissions and activities that directly enable those solutions; (ii) “transition” activities, or activities that are emissions-intensive and can help achieve significant emissions reductions and are expected to experience stable or growing demand under Paris Agreement-aligned pathways; and (iii) “abatement measures,” which applies to certain emissions-reduction investments that are expected to result in substantial near-term emissions reductions in activities expected to experience declining demand under Paris Agreement-aligned pathways and cannot achieve significant long-term decarbonization, such as investments in the oil and gas sector. The Council expects technical screening criteria to be developed initially for three sectors in late 2026 and for three additional sectors in 2027, covering electricity, buildings, transportation, mining, manufacturing, and agriculture and forestry. The public comment period closed on August 13, 2026.

SEC Chairman Atkins discusses Rule 14a-8 and potential disclosure reforms

On July 9, 2026, U.S. Securities and Exchange Commission (SEC) Chairman Paul S. Atkins delivered remarks at the Society for Corporate Governance’s 2026 National Conference addressing, among other matters, the future administration of Exchange Act Rule 14a-8 and potential reforms to Regulation S-K. With respect to Rule 14a-8, Chairman Atkins discussed the Division of Corporation Finance’s decision, previously covered in our November 2025 and March 2026 ESG Updates, not to issue responses to most shareholder proposal no-action requests during the 2026 proxy season. Specifically, Chairman Atkins addressed the 2026 proxy season, calling it “both a turning point and a proof of concept.” He stated that a central takeaway from the 2026 proxy season is that the Staff’s “interposition between companies and shareholder proponents is unnecessary to effectively and efficiently resolve whether shareholder proposals should be included in proxy statements.” Chairman Atkins also stated that the SEC was conducting a broader review of Rule 14a-8, including the rule’s relationship to state corporate law and the scope of the SEC’s federal authority. Separately, he discussed comment letters submitted in response to the SEC’s request for feedback on potential Regulation S-K reforms. In particular, he noted that some commenters had recommended a “materiality overlay” that would permit companies to omit information otherwise required by Regulation S-K if that information is not material, potentially subject to specified exceptions. Chairman Atkins indicated that this approach could support a principles-based disclosure framework.

Subsequently, on August 14, 2026, the Staff released an updated statement on its role in the Rule 14a-8 process (the “August Staff Statement”) announcing that the Staff will not respond to any Rule 14a-8 no-action requests, including no-action requests under Rule 14a-8(i)(1). The August Staff Statement explained that this change was implemented to allow the Staff to “focus . . . resources on the review of Securities Act and Exchange Act filings, including those reviews that are statutorily required, for the protection of investors and facilitation of capital formation” and made “in light of the extensive body of guidance from the Commission and the staff available to both companies and proponents on Rule 14a-8.” In addition, the Staff will no longer issue “no objection” letters in response to a company’s submission as they did in the 2026 proxy season. For further details, see our client alert here.

Other highlights:

On July 24, 2026, Representatives Craig Goldman, Jodey Arrington, and Greg Steube introduced H.R. 9892, the “Stop EU Overreach Act,” which would require the U.S. Trade Representative, within 30 days of enactment, to initiate a Section 301 investigation into whether the EU’s Corporate Sustainability Due Diligence Directive, Corporate Sustainability Reporting Directive, Deforestation Regulation, Carbon Border Adjustment Mechanism, and related measures unreasonably or discriminatorily burden U.S. commerce. If the U.S. Trade Representative makes an affirmative determination, the bill would require consideration of responsive action, including duties or suspension of trade benefits.
On July 21, 2026, a coalition of 18 states, the District of Columbia, and New York City petitioned the U.S. Court of Appeals for the D.C. Circuit to review the Environmental Protection Agency’s final rule entitled “Phasedown of Hydrofluorocarbons: Reconsideration of Certain Regulatory Requirements Promulgated Under the Technology Transitions Provisions of the American Innovation and Manufacturing Act of 2020.” The rule took effect on July 27, 2026, and relaxes restrictions on hydrofluorocarbons applicable to several refrigeration and air-conditioning subsectors, including removing or extending the various compliance deadlines and raising global warming potential thresholds for certain refrigeration systems.
On July 21, 2026, the California Air Resources Board (CARB) presented proposed regulations under Senate Bill 253 that would initially require Scope 3 reporting beginning in 2027 for five categories (purchased goods and services, fuel- and energy-related activities, waste generated in operations, business travel, and employee commuting). CARB staff also proposed requiring limited assurance for Scope 1 and Scope 2 emissions reports beginning in 2027.
On July 17, 2026, the Bureau of Ocean Energy Management (BOEM) published a Notice of Availability of the Proposed Leasing Notice for American Samoa Outer Continental Shelf Pacific Mineral Lease Sale 1. BOEM proposes offering two lease areas, totaling approximately 31.5 million acres, for deep-sea mining activities through an auction on November 19, 2026. If the auction moves forward, it would represent the first-ever deep-sea mining lease sale.

In case you missed it…

The U.S. Equal Employment Opportunity Commission announced it had voted to issue a Notice of Proposed Rulemaking that would rescind employers’ legal obligations to collect and file annual reports regarding workforce demographic data, as covered in more detail in our recent DEI Task Force Update.
The Gibson Dunn Workplace DEI Task Force has published its updates summarizing the latest key developments, media coverage, case updates, and legislation related to diversity, equity, and inclusion.
A collection of our analyses of the legal and industry impacts from the current administration is available here.

V. APAC

Singapore’s ACRA launches public consultation on draft Sustainability Disclosure Standards

On July 27, 2026, the Singapore Accounting and Corporate Regulatory Authority (ACRA)’s Interim Sustainability Standards Committee (Interim SSC) launched a public consultation on the draft Singapore Sustainability Disclosure Standards, which set out the climate-related information companies would be required to disclose. The draft standards are based on the International Sustainability Standards Board Standards and comprise two components: SFRS S1, covering general sustainability-related financial disclosures, and SFRS S2, covering climate-related disclosures. The Interim SSC proposes that only SFRS S2 be mandatory, while SFRS S1 would remain voluntary, alongside other local adjustments including tailored transition reliefs and a statement of compliance requirement. The consultation period runs until October 25, 2026.

Australian government announces new criminal offense and civil penalties for corporate failure to prevent modern slavery

On July 16, 2026, the Australian government announced plans to strengthen the country’s modern slavery laws through the introduction of a new criminal offense for companies with annual consolidated revenue over AUD 100 million that fail to prevent modern slavery in their supply chains. Such companies would have a defense where they can demonstrate that they took reasonable steps to prevent modern slavery. The government also intends to introduce civil penalties and enforcement powers to address non-compliance with existing obligations under the Modern Slavery Act 2018. The proposed reforms, including enforcement options such as a possible deferred prosecution agreement scheme, will be refined through upcoming consultations.

South Korea finalizes roadmap for mandatory ESG disclosure

On July 8, 2026, the Korea Financial Services Commission (FSC) announced the final version of South Korea’s roadmap for mandatory ESG disclosure. Under the roadmap, KOSPI-listed companies with total consolidated assets of KRW 10 trillion or more will be required to file ESG disclosures from 2028 (covering FY 2027), with the threshold lowered to KRW 5 trillion from 2029 and a possible further reduction to KRW 2 trillion from 2030, subject to review. Disclosures will be made as part of companies’ business reports under the Financial Investment Services and Capital Markets Act. To ease the transition, companies will be exempt from civil, administrative, and criminal liability for the content of their disclosures during the first three years, after which a safe harbor will apply to inherently uncertain information such as forward-looking estimates.

Other highlights:

On July 7, 2026, Vietnam announced a comprehensive framework for forest carbon sequestration and storage services, covering creation, management, and transfer of emission-reduction results and forest carbon credits.
On July 1, 2026, the Securities and Exchange Commission of Pakistan launched its inaugural ESG Mutual Funds Framework, requiring ESG funds to invest at least 50% of net assets in ESG-aligned investments.

The following Gibson Dunn lawyers prepared this update: Carla Baum, Cléo Batista, Aaron Briggs, Mellissa Campbell Duru, Nyala Carbado, Ellie Carter*, Becky Chung, Stephanie Collins, Sydney Colopy, Georgia Derbyshire, Julie Doria, Pierre-Emmanuel Fender, Ferdinand Fromholzer, Saad Khan, Julia Lapitskaya, Vanessa Ludwig, Babette Milz, Johannes Reul, Meghan Sherley, Nicholas Tok, Maggie Valachovic, and Mason Ye.

ESG: Risk, Litigation, and Reporting Leaders and Members:
Aaron Briggs – San Francisco (+1 415.393.8297, abriggs@gibsondunn.com)
Susy Bullock – London (+44 20 7071 4283, sbullock@gibsondunn.com)
Perlette M. Jura – Los Angeles (+1 213.229.7121, pjura@gibsondunn.com)
Ronald Kirk – Dallas (+1 214.698.3295, rkirk@gibsondunn.com)
Michael K. Murphy – Washington, D.C. (+1 202.955.8238, mmurphy@gibsondunn.com)
Robert Spano – London/Paris (+33 1 56 43 13 00, rspano@gibsondunn.com)

*A trainee solicitor in the London office who is not yet admitted to practice law.

Now, at a time when the global cryptocurrency market is valued at well over $2 trillion, the SEC’s proposed rule is intended to facilitate capital raising involving crypto assets within the U.S. capital markets.

Introduction

On August 18, 2026, the U.S. Securities and Exchange Commission issued a long-anticipated proposed rule outlining a new exempt offering framework, titled Regulation Crypto Assets, that would be available for and tailored to the offer and sale of investment contracts involving crypto assets.[1] The Commission first set forth its views on how the federal securities laws, and in particular, the definition of “investment contract,” apply to a specific crypto asset in 2017, with the issuance of the DAO Report.[2] Under the federal securities laws, if a crypto asset can be a security, then its offer and sale in the U.S. must either be registered with the SEC or qualify for an exemption from registration, or such offer and sale are illegal. Because the SEC’s requirements for registered and exempt offerings were not developed for crypto assets subject to investment contracts – and as the SEC acknowledges, the existing requirements “could complicate an issuer’s transaction planning and, in turn, impede capital formation and innovation in the crypto asset markets”[3] – many crypto asset transactions have been conducted offshore. Now, at a time when the global cryptocurrency market is valued at well over $2 trillion,[4] the SEC’s proposed rule is intended to facilitate capital raising involving crypto assets within the U.S. capital markets.

Regulation Crypto Assets is both novel and familiar. Novel, because if it is adopted, it would establish the SEC’s first exempt offering process tailored to crypto assets. Familiar, because it borrows significantly from Regulation A, including requiring the filing of an offering circular for SEC Staff review and qualification, which offering circular would be required to include financial statements; restrictions on the timing of offers and sales, similar to Section 5 of the Securities Act; limits on purchase amount, depending on accredited investor status; ongoing periodic and current reporting; and even bad actor disqualification. Indeed, in some respects, Regulation Crypto Assets is almost too similar to the other exempt offering regulations adopted by the SEC, and as a result, raises questions about whether it is sufficiently “fit-for-purpose.”

The comment period for Regulation Crypto Assets ends on October 20, 2026.

Summary of Regulation Crypto Assets

Regulation Crypto Assets builds on the SEC’s most recent interpretive guidance on the application of “investment contract” to crypto assets. As discussed in more detail in our client alert here, in March 2026, the SEC addressed its views on how non-security crypto assets become subject to, and how they cease to be subject to, an investment contract.[5] Critical to the SEC’s interpretation is its emphasis on how an issuer markets and promotes a contract, transaction or scheme involving a crypto asset, which in its view is highly relevant to assessing whether the issuer is offering or selling an investment contract and thus a security. Under the March 2026 guidance, once an issuer has satisfied its representations and promises to engage in the essential managerial efforts under the investment contract, the investment contract – and “security” status – ends.

The proposed rule would:

create two exemptions from Securities Act registration for offerings involving a “covered investment contract”;
create a safe harbor for when an investment contract is deemed to no longer exist; and
preempt state registration and qualification requirements for these offerings as well as for certain resales.

The proposed rule defines a “covered investment contract” as an investment contract involving a crypto asset that does not itself constitute a security and where no other asset is subject to the investment contract.[6] The rule proposal defines the crypto asset underlying the investment contract as the “subject crypto asset.”

A. Startup Exemption

The proposed Startup Exemption would permit an issuer, which may be an entity, an individual, or a group of individuals or entities, to engage in covered transactions involving a subject crypto asset for up to four years, subject to an aggregate $5 million offering limit. “Covered transactions” is defined to include offers and sales and other distributions, including airdrops and network rewards. The exemption is non-exclusive and generally could be used only once by the issuer or its affiliates for the same or a substantially similar crypto asset.

Before relying on the exemption, an issuer would be required to file a new form on EDGAR titled “Form NOR,” providing the name of the issuer and crypto asset and containing a certification that the information in Form NOR is correct and that the issuer intends to fulfill the essential managerial efforts the issuer represented or promised investors it would engage in under the covered investment contract, within four years after the filing of the Form NOR.

Form NOR would specify the issuer’s website address where the issuer would make the required specified disclosures freely accessible. These disclosures would include, among other matters:

The material terms of the covered investment contract, including the issuer’s representations or promises to engage in the essential managerial efforts and its progress in meeting these representations or promises, the purchaser’s obligations under the investment contract, and any conditions to such contract;
The material terms of the offering;
The material aspects of the subject crypto asset;
The material aspects of the issuer’s management and related persons, related person transactions and conflicts of interest, and any transfer restrictions to which they are subject;
The material aspects of the associated crypto network or application and the issuer’s plan of development, including its progress on such plan;
The material aspects of the security (i.e., the integrity) of the subject crypto asset and associated crypto network or application, and, to the extent the issuer has made it publicly available, the website address at which the code underlying the network or application is accessible;
The material aspects of the subject crypto asset’s economics and allocations, including supply, pricing, lockups, distribution methods, and the mechanisms for generating and destroying subject crypto assets;
The material aspects of the network’s or application’s governance mechanisms, smart contract governance mechanisms and permissions;
The material aspects of the subject crypto asset’s current and anticipated ecosystem, including information about the technology infrastructure, types of participants, and other parties and systems using the subject crypto asset and associated network or application; and
The material risks that make an investment in the offering speculative or risky to investors.

These disclosures would need to be updated within 30 calendar days after the end of each calendar year if there are any material changes. Financial statements would not be required.

The obligation to update the information under Form NOR would continue until the earlier of (i) the end of the four-year period after the issuer files the initial notice of reliance at which point a transition report on Form TR would become due or (ii) the date on which the issuer elects to file a Form TR, signaling to the market that the issuer is no longer relying on the exemption.

The Startup Exemption would permit general solicitation, would not limit participation to accredited investors and would not impose individual investment limits. Securities sold pursuant to the exemption would not be treated as restricted securities or subject to rule-based resale restrictions, so purchasers could resell immediately absent a contractual holding period. The Startup Exemption would not be available to bad actors, as defined in Rule 262(a) of Regulation A under the Securities Act.

B. Fundraising Exemption

The proposed Fundraising Exemption would establish two tiers generally modeled on Regulation A. Tier 1 would permit offerings of up to $20 million in a 12-month period, of which no more than $6 million could be offered by selling securityholders who are affiliates of the issuer. Tier 2 would permit offerings of up to $75 million in a 12-month period, of which no more than $22.5 million could be offered by selling securityholders who are affiliates of the issuer.

To rely on either tier, an issuer would need to be organized and principally based in the United States and satisfy specified eligibility requirements. In this regard, the Fundraising Exemption differs from the Startup Exemption, which has no U.S. nexus requirement, as well as from Regulation A, which can used by both U.S. and Canadian issuers. The issuer would be required to file a new form with the SEC, titled “Form 1-CRYPTO,” which would include an offering circular containing the same narrative crypto asset disclosures required under the Startup Exemption, in addition to a discussion of the issuer’s financial condition and financial statements. U.S. GAAP financial statements would also be required, but Tier 1 offerings would not need audited financial statements. Similar to Regulation A offerings, this offering circular, which could first be submitted confidentially, would be subject to SEC Staff review and would need to be qualified before sales could be made. The Fundraising Exemption would permit testing-the-waters communications and would permit general solicitation following qualification.

For both Tier 1 and Tier 2 offerings, investors that are not accredited investors as defined under Rule 501 of Regulation D generally could purchase no more than 10% of the greater of their annual income or net worth if they are natural persons, or 10% of the greater of their annual revenue or net assets if they are legal entities. Accredited investors would not be subject to this limitation.

Issuers completing offerings under either tier would be subject to ongoing reporting requirements, including the new proposed forms for annual reports on Form 1-KC, semiannual reports on Form 1-SC and current reports on Form 1-UC for specified events. Issuers that rely on either the Startup Exemption or the Fundraising Exemption would remain subject to the antifraud and antimanipulation provisions of the federal securities laws.

As with the Startup Exemption and similar to Regulation A offerings, securities sold pursuant to the Fundraising Exemption would not be treated as restricted securities, and the Fundraising Exemption would not be available to bad actors.

C. Investment Contract Safe Harbor

The rule proposal would establish a non-exclusive safe harbor under which a covered investment contract would be deemed to have ceased to constitute an investment contract once the issuer has completed or permanently ceased the essential managerial efforts it represented or promised to undertake and does not intend to make new promises to undertake such efforts.

An issuer relying on the safe harbor would be required to file a Form TR, including a certification and supporting analysis demonstrating that the conditions of the safe harbor have been satisfied. Although the safe harbor is intended to reduce uncertainty about when an issuer’s promised efforts are complete and the covered investment contract falls away, the Form TR filing does not preclude the Commission from later challenging whether the issuer has “misrepresented, either intentionally or otherwise,”[7] that the conditions were in fact satisfied. Nor would the safe harbor bar private lawsuits premised on the theory that the transactions in the subject crypto asset violate federal or state securities laws.

D. State Securities Law Preemption

The rule proposal would define purchasers in offerings conducted pursuant to Regulation Crypto Assets as “qualified purchasers” for purposes of Securities Act Section 18, which would preempt state registration and qualification requirements for these offerings. The rule proposal also would provide preemption for certain secondary transactions so long as the issuer stays current with any applicable disclosure and reporting obligations of the Regulation Crypto Assets exemption. State antifraud and enforcement authority would remain unaffected.

Submitting Comments

The adoption of the Proposing Release as a final rule will depend significantly on the comments received by the SEC. Comments are due by October 20, 2026, and commenters – particularly digital asset issuers, exchanges and other market participants in the digital asset industry – should consider commenting on whether, in fact, Regulation Crypto Assets provides the “fit-for-purpose” regulatory framework needed to accomplish the goal of accommodating innovation in the crypto assets markets.

Note that the proposed Regulation Crypto Assets does not address related securities law issues such as whether the listing standards of the national securities exchanges need to be amended to facilitate the listing of covered investment contracts, even though Regulation Crypto Assets assumes that a covered investment contract could be so listed.[8] Nor does the proposed Regulation Crypto Assets address the aspects of the federal securities laws that may apply to secondary-market transactions involving covered investment contracts, such as those applicable to exchanges, brokers and dealers.[9] The Commission simply notes that it “will continue to consider whether further action with respect to covered investment contracts beyond the proposed rules in this release is warranted.”[10]

The SEC has requested input from commenters on all aspects of the proposed rule, including, for example:

the definitional clarity of “covered investment contract” and other key definitions;
whether to specify accounting and auditing standards applicable under Regulation Crypto Assets;
the scope of the exemptions and safe harbor;
the adequacy of proposed disclosures; and
the sufficiency of proposed investor protective provisions.

[1] Regulation Crypto Assets, Release No. 33-11434 (Aug. 18, 2026) (the Release).

[2] See Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO, Release No. 34-81207 (July 25, 2017).

[3] Release at 9.

[4] See https://coinmarketcap.com.

[5] See Application of the Federal Securities Laws to Certain Types of Crypto Assets and Certain Transactions Involving Crypto Assets, Release No. 33-11412 (Mar. 17, 2026).

[6] The SEC notes that the proposed rule does not apply to other crypto assets that could be classified as securities, such as “digital securities.” Release at 10, n. 19.

[7] Release at 166.

[8] See Rule 300(c)(2)(ii)(C) of Regulation Crypto Assets.

[9] Of the ten topics that the SEC’s Crypto Task Force requested comments on, six are not addressed in the Release: trading; custody; crypto lending; crypto exchange-traded products; tokenized securities; and sandbox and related international issues. See Release at 19-20.

[10] See Release at 73, n. 192.

The following Gibson Dunn lawyers prepared this update: Mellissa Duru, Matt Gregory, Nick Harper, Elizabeth Ising, Thomas Kim, Brian Lane, Jeffrey Steiner, Sara Weed, Malakeh Hijazi, and Paul Yu.

Gibson Dunn’s lawyers are available to assist with any questions you may have regarding these developments. To learn more, please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any of the following leaders and members of the firm’s Securities Regulation & Corporate Governance, Fintech & Digital Assets, or Administrative Law & Regulatory practice groups:

Securities Regulation & Corporate Governance:
Aaron Briggs – San Francisco, CA (+1 415-393-8297, abriggs@gibsondunn.com)
Mellissa Campbell Duru – Washington, D.C. (+1 202.955.8204, mduru@gibsondunn.com)
Elizabeth Ising – Washington, D.C. (+1 202-955-8287, eising@gibsondunn.com)
Thomas J. Kim – Washington, D.C. (+1 202-887-3550, tkim@gibsondunn.com)
Brian J. Lane – Washington, D.C. (+1 202-887-3646, blane@gibsondunn.com)
Julia Lapitskaya – New York, NY (+1 212-351-2354, jlapitskaya@gibsondunn.com)
Ronald O. Mueller – Washington, D.C. (+1 202-955-8671, rmueller@gibsondunn.com)
Michael Titera – Orange County, CA (+1 949-451-4365, mtitera@gibsondunn.com)
Geoffrey E. Walter – Washington, D.C. (+1 202-887-3749, gwalter@gibsondunn.com)
Lori Zyskowski – New York, NY (+1 212-351-2309, lzyskowski@gibsondunn.com)

Fintech & Digital Assets:
Jason J. Cabral – New York (+1 212.351.6267, jcabral@gibsondunn.com)
M. Kendall Day – Washington, D.C. (+1 202.955.8220, kday@gibsondunn.com)
Jeffrey L. Steiner – Washington, D.C. (+1 202.887.3632, jsteiner@gibsondunn.com)
Sara K. Weed – Washington, D.C. (+1 202.955.8507, sweed@gibsondunn.com)

Administrative Law & Regulatory:
Matt Gregory – Washington, D.C. (+1 202.887.3635, mgregory@gibsondunn.com)
Nick Harper – Washington, D.C. (+1 202.887.3534, nharper@gibsondunn.com)

Effectively, a Prescribed Company may now be established by any applicant, which is a significant departure from the qualifying requirements that previously applied.

Amended Dubai International Financial Centre (DIFC) Prescribed Company Regulations

The DIFC enacted amended Prescribed Company Regulations (the PC Regulations) on 24 July 2026. The amendments remove the last of the restrictions on who may establish a Prescribed Company (PC), a type of special purpose vehicle (SPV) or holding company vehicle, in the DIFC. Effectively, a PC may now be established by any applicant. This is a significant departure from the qualifying requirements that previously applied, which required the PC to be controlled by a Gulf Cooperation Council (GCC) person, a DIFC registered person or an authorised firm, or for the PC to be established to hold GCC Registrable Assets or to carry out a defined “Qualifying Purpose” (which under the previous PC regime included, for example, crowdfunding and aviation structures).

Unless the context requires otherwise, capitalised terms used in this article have the meaning given to them in the PC Regulations.

Expanded Role of Corporate Service Providers (CSPs) in the DIFC

Requirement to appoint a CSP

In place of the qualifying requirements, the PC Regulations now require most PCs to appoint a Dubai Financial Services Authority (DFSA) licensed corporate service provider (CSP), which requirement is indicative of the aim to increase oversight of PCs.

Exceptions from the requirement to appoint a CSP

A PC that meets certain criteria is exempt from the requirement to appoint a CSP.

In order to qualify for the exemption, a PC must be controlled by:

an eligible DIFC registered entity (i.e. any DIFC registered entity excluding another PC, a Variable Capital Company, Non-Profit Incorporated Organisation or Foundation);
a firm licensed by the DFSA or another recognised financial services regulator;
a body corporate which has any class of its securities on a recognised securities exchange; or
a qualifying government entity.

Grace period for PCs to appoint a CSP

PCs which are incorporated before 24 July 2026 and do not benefit from the exemptions described above have until 24 January 2027 to appoint a CSP. Failure to do so may result in a financial penalty of up to USD 20,000 and the loss of the entity’s status as a PC.

Role of CSPs

CSPs are now central to establishing and maintaining most PCs. The PC Regulations give CSPs a formal statutory role as the administrative and compliance interface with the Registrar. Under Regulation 5 of the PC Regulations, the CSP is expressly responsible for lodging or paying all documents, forms and fees required by the PC Regulations to incorporate or continue a relevant PC, and for making ongoing regulatory filings on its behalf. The CSP must keep up-to-date and readily accessible records for each PC it acts for, make those records available for inspection by the Registrar, and retain them for six years after it ceases to act.

Regulation 5 of the PC Regulations also requires the PC to give its CSP the information and documents needed to discharge its duties, and failure to do so may result in a financial penalty of up to USD 100,000. The Registrar, in turn, has inspection and investigation powers over CSPs, including requiring production of documents or access to premises, notifying the DFSA of suspected breaches of a CSP’s duties and referring potential criminal offences to law enforcement agencies.

The practical effect of this expanded CSP role is that day-to-day compliance sits with the CSP, while responsibility for providing it with accurate information remains with the PC and its director(s).

Comparison With the Abu Dhabi Global Market (ADGM)

The effect of the updated PC Regulations is to make the PC vehicle far more accessible at the point of incorporation and more closely supervised, through enhanced CSP oversight, thereafter.

This is not markedly different from the position with respect to the SPV regime in the ADGM. The ADGM has required a service provider for non-exempt SPVs since July 2021, with similar statutory duties and obligations applicable to CSPs acting on behalf of ADGM SPVs. Consequently, the two regimes now resemble one another far more closely than before.

Other Similarities Between the Regimes

Form

Under both the ADGM and DIFC regimes, ADGM SPVs and PCs (respectively) may only be private companies limited by shares incorporated under the relevant companies legislation. In the ADGM, an SPV may also be incorporated as a restricted scope private company limited by shares (the key features of which are described below). Although both vehicles are private companies, they are licensed to act only as passive holding vehicles. They may hold assets but may not trade or carry on operational business, and neither vehicle may employ staff. The prohibition on employing staff would not, however, prevent the relevant vehicle from appointing a director(s) or hiring third-party service providers (such as advisory firms).

Registered office

In addition, both regimes dispense with the need for such entities to lease premises within the relevant free zone, instead requiring the ADGM SPV or PC to have a registered office in the relevant free zone. In practice, this registered office is provided by the appointed CSPs or, where the vehicle is exempt, by a group entity already established in the applicable free zone.

Key Differences

Nexus

The nexus requirement is now the key difference between the two regimes. The ADGM requires every applicant to demonstrate an appropriate connection to the ADGM, the United Arab Emirates (UAE) or the wider GCC. The test is set out in Registration Authority guidance rather than in the ADGM Companies Regulations 2020 (the ADGM Regulations) themselves, with the ADGM Registrar retaining the ultimate discretion in determining whether an ADGM SPV has established sufficient connection. In practice, the ADGM Registrar has adopted a pragmatic approach in this regard. The DIFC has removed its nexus and qualifying purpose requirements altogether in the PC Regulations. Family offices, funds and corporate groups without an existing regional footprint or a qualifying purpose had previously struggled to meet the nexus requirements to establish a PC in the DIFC. That assessment no longer forms part of the application process.

Exempt vehicles

The exemption tests with respect to whether an ADGM SPV or PC is required to appoint a CSP also differ. While the two regimes broadly recognise the same categories of controlling entity, the ADGM additionally allows a vehicle to dispense with the CSP requirement where its parent can demonstrate substantial UAE assets, turnover and employees together with adequate governance policies. The DIFC has no equivalent exemption, so a PC within an established regional group without a DIFC-registered parent will generally need a CSP, whereas this may not be necessary in the ADGM.

Audited accounts

Both a PC and an ADGM SPV must maintain accounting records, and both must file audited accounts with the applicable company registrar unless they qualify under the small companies regime in the relevant free zone.

The tests differ in construction. The DIFC exemption turns on annual turnover below USD 5 million and no more than 20 shareholders, while the ADGM exemption turns on turnover not exceeding USD 13.5 million and no more than 35 employees. The PC Regulations also go further in two limited respects, offering additional exemptions for PCs that carry out Structured Financing (e.g. where a PC is used within a structure for a sukuk issuance) and for crowdfunding structures where the underlying PCs may have more than 20 shareholders but do not exceed a turnover of USD 5 million.

In practice the difference in thresholds may have limited impact, since a vehicle seeking to be treated as a qualifying free zone person under the UAE corporate tax regime will need audited financial statements in either free zone regardless of its size.

Restricted Scope Companies

It is worth noting that the ADGM also permits an SPV to be incorporated as a Restricted Scope Company (RSC). An RSC may only be incorporated in limited circumstances under the ADGM Regulations, for example if it is a subsidiary undertaking of a body corporate incorporated by the federal laws of the UAE or the laws of any Emirate of the UAE.

An RSC is also a private company, but benefits from enhanced confidentiality in that its directors and shareholders do not appear on the public register, although that information must still be disclosed in full to the ADGM Registrar of Companies[1]. It is also not required to file accounts or have its accounts audited. Under section 3(4) of the ADGM Regulations an RSC must be a subsidiary undertaking of a body corporate that prepares and publishes group accounts, whether under the ADGM Regulations or under another regime the ADGM companies registrar recognises for that purpose, a subsidiary undertaking of a body corporate incorporated by the federal law of the UAE or by the law of any Emirate of the UAE, or wholly owned by a single natural person or by a group of family members approved by the ADGM companies registrar. The first and third limbs described above each involve an element of discretion from the ADGM companies registrar, and therefore any person seeking to incorporate an RSC should confirm the relevant eligibility criteria at the outset.

The DIFC has no general equivalent of an RSC, and a company’s directors and shareholders will ordinarily be disclosed on the DIFC public register. However, a private register regime is separately available under the DIFC Family Arrangements Regulations for certain family businesses. A PC established within a family business structure may therefore benefit under a separate private register regime, subject to a specific application and payment of a registration fee.

Cost

At the time of publishing this alert, the registration costs in the ADGM and DIFC are broadly comparable. In the DIFC, registration costs are approximately USD 1,100 (with separate data protection fees of USD 750 for entities processing personal data) compared with a comprehensive fee of USD 1,900 in the ADGM. However, in both free zones, unless the relevant vehicle is exempt from the requirement to appoint a corporate service provider, for most vehicles the service provider fees for incorporation, provision of a registered office and ongoing administration will exceed the registry fees, and will need to be negotiated directly with the provider.

For RSCs, in addition to the USD 1,900 registration fees, an additional licensing fee of USD 3,100 applies.

Key Differences at a Glance

	DIFC Prescribed Company	ADGM Special Purpose Vehicle
Regional nexus	Not required. Open to any applicant, wherever resident.	Connection to the ADGM, the UAE or the GCC, assessed under guidance and subject to the ADGM companies registrar’s ultimate discretion.
Exemption from the CSP requirement	Exemption applies if PC is controlled by a regulated, listed, government or eligible DIFC-registered entity.	Equivalent categories as mentioned opposite apply, and additionally an exemption based on demonstrable adequate presence in the UAE.
Accounts and audit	Accounts must be filed and audited unless the small companies regime applies. Certain additional exemptions are available for PCs carrying out Structured Financing or as part of a Crowdfunding Structure.	Accounts must be filed and audited unless the small companies regime applies or the ADGM SPV is an RSC (in which case it is exempt from the audit requirement and need only file its balance sheet).
Reduced disclosure	Usual disclosure applies. Separate private register regime available to certain family businesses under the Family Arrangements Regulations.	Details of directors and shareholders of ADGM SPVs incorporated as RSCs do not appear on the public register.
Registry and formation fees	USD 100 application fee and USD 1,000 commercial licence fee. Separate data protection costs of USD 750 when PC is processing personal data.	USD 200 name reservation fee, USD 700 registration fee (inclusive of a data protection fee), and USD 1,000 commercial licence fee. RSC registration is approximately USD 5,000.
Grace period to appoint a CSP – action required	Non-exempt PCs must appoint a service provider by 24 January 2027.	None. The equivalent grace period expired in 2021.

[1] Beneficial ownership is not publicly disclosed for entities in the either the ADGM or DIFC.

The following Gibson Dunn lawyers prepared this update: Andrew Steele, Jade Chu, Ash Cywicki, and Krishna Parikh.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these issues. For additional information about how we may assist you, please contact the Gibson Dunn lawyer with whom you usually work, any leader or member of the firm’s Mergers & Acquisitions or Private Equity practice groups, or the authors:

Andrew Steele – Abu Dhabi (+971 2 234 2621, asteele@gibsondunn.com)

Jade Chu – Dubai/Abu Dhabi (+971 4 318 4604, jchu@gibsondunn.com)

Ashley Cywicki – Dubai/Abu Dhabi (+971 4 318 4607, acywicki@gibsondunn.com)

Krishna Parikh – Dubai (+971 4 318 4609, kparikh@gibsondunn.com)

Texas Supreme Court Round-Up – August 24, 2026

The Texas Supreme Court has issued all decisions for cases argued during the 2025–2026 term. Below we provide an overview of how many cases the Court heard, along with how each court of appeals fared.

In the 2025–2026 term, the Texas Supreme Court heard argument in 64 cases and issued decisions in all of them—on par with the number of argued cases before the U.S. Supreme Court this term.

Most of those cases consisted of petitions for review arising from the state courts of appeals, along with a few mandamus petitions and one direct appeal from a trial court.

One of the first questions clients often ask when seeking to reverse or defend a decision at the Texas Supreme Court is, “What are my odds?”

The answer: For the 2025–2026 term, the Court affirmed in 24.2% and reversed in 75.8% of the cases in which it heard argument and issued a decision.

Below, we take a closer look at those numbers, tracking how many cases the Court heard from each Texas court of appeals, calculating the Court’s overall affirmance and reversal rates, and examining the success of each court of appeals before the Court.

Argument Numbers:

All but one of the 15 courts of appeals in Texas had cases argued before the Court this term. The Fifth Court of Appeals (Dallas) retained its first-place ranking from last term for most cases before the Court, although it shared that distinction this term with the Third Court of Appeals (Austin). By contrast, the Sixth Court of Appeals (Texarkana) had no cases before the Court this term.

Below is the count of argued cases from each court of appeals:

First Court of Appeals (Houston): 4
Second Court of Appeals (Fort Worth): 5
Third Court of Appeals (Austin): 11
Fourth Court of Appeals (San Antonio): 8
Fifth Court of Appeals (Dallas): 11
Sixth Court of Appeals (Texarkana): 0
Seventh Court of Appeals (Amarillo): 2
Eighth Court of Appeals (El Paso): 3
Ninth Court of Appeals (Beaumont): 1
Tenth Court of Appeals (Waco): 1
Eleventh Court of Appeals (Eastland): 1
Twelfth Court of Appeals (Tyler): 1
Thirteenth Court of Appeals (Corpus Christi–Edinburg): 9
Fourteenth Court of Appeals (Houston): 5
Fifteenth Court of Appeals (limited statewide jurisdiction): 1

The Court also heard argument in a direct appeal from the 261st District Court in Travis County, reversing that court. Unlike last term, the Court did not hear argument in any cases certified to it by the U.S. Court of Appeals for the Fifth Circuit.

Affirmance & Reversal Rates:

We next turn to the Court’s overall affirmance and reversal rates, as well as the results by court of appeals, using the same methodology as last term.

We limited the dataset to argued and decided cases arising from Texas state courts, excluding those resolved on the briefing alone. That parameter keeps the statistics centered on cases that genuinely inform a litigant’s odds once the Court agrees to hear argument.

That leaves 64 cases for the 2025–2026 term. For scoring purposes, reversals include both vacaturs and grants of mandamus relief in cases where a party initially sought relief in the court of appeals. Affirmances include denials of mandamus relief in cases where a party initially sought relief in the court of appeals. Cases whose judgments were reversed or affirmed only in part were scored as ties, each side receiving half a point—this includes cases in which the Court reversed on every issue presented for review, but the parties left other portions of the court of appeals’ judgments unchallenged. And, although a few cases this term were consolidated for argument and opinion, we counted each one individually in our calculations—to better capture the odds of success for an individual petition once granted.

With that framework in place, the Court overall affirmed in 24.2% of cases and reversed in 75.8%. Those rates varied across the individual courts of appeals:

First Court of Appeals:
- Affirmed: 0% (0 out of 4)
- Reversed: 100% (4 out of 4)
Second Court of Appeals:
- Affirmed: 10% (0.5 out of 5)
- Reversed: 90% (4.5 out of 5)
Third Court of Appeals:
- Affirmed: 40.9% (4.5 out of 11)
- Reversed: 59.1% (6.5 out of 11)
Fourth Court of Appeals:
- Affirmed: 31.3% (2.5 out of 8)
- Reversed: 68.7% (5.5 out of 8)
Fifth Court of Appeals:
- Affirmed: 31.8% (3.5 out of 11)
- Reversed: 68.2% (7.5 out of 11)
Seventh Court of Appeals:
- Affirmed: 25% (0.5 out of 2)
- Reversed: 75% (1.5 out of 2)
Eighth Court of Appeals:
- Affirmed: 0% (0 out of 3)
- Reversed: 100% (3 out of 3)
Ninth Court of Appeals:
- Affirmed: 0% (0 out of 1)
- Reversed: 100% (1 out of 1)
Tenth Court of Appeals:
- Affirmed: 0% (0 out of 1)
- Reversed: 100% (1 out of 1)
Eleventh Court of Appeals:
- Affirmed: 0% (0 out of 1)
- Reversed: 100% (1 out of 1)
Twelfth Court of Appeals:
- Affirmed: 0% (0 out of 1)
- Reversed: 100% (1 out of 1)
Thirteenth Court of Appeals:
- Affirmed: 16.7% (1.5 out of 9)
- Reversed: 83.3% (7.5 out of 9)
Fourteenth Court of Appeals:
- Affirmed: 40% (2 out of 5)
- Reversed: 60% (3 out of 5)
Fifteenth Court of Appeals:
- Affirmed: 50% (0.5 out of 1)
- Reversed: 50% (0.5 out of 1)

What It Means:

The Court’s overall affirmance rate fell to 24.2% this term, down 3.5 percentage points from 27.7% last term. That’s consistent with the Court’s historical pattern of reversing substantially more often than it affirms and reinforces the conventional wisdom that the odds favor the petitioner once the Court agrees to hear argument.
The Fifteenth Court of Appeals, which has limited statewide jurisdiction and began hearing cases only in September 2024, had its first case reviewed by the Court this term. The result was mixed: The Court agreed that the Fifteenth Court of Appeals lacked jurisdiction over the premature appeal but concluded that it could have taken steps to secure appellate jurisdiction rather than simply dismissing the case. The Court then treated the State’s petition for review as a petition for writ of mandamus and granted relief.
Even so, that mixed decision was enough to put the Fifteenth Court of Appeals atop the affirmance rankings, with a 50% affirmance rate. The Third and Fourteenth Courts of Appeals also posted relatively strong results, with affirmance rates of about 40% across multiple cases. At the other end of the spectrum, the Eighth Court of Appeals (El Paso) was affirmed in 0% of its three cases this term, down sharply from its 35.7% affirmance rate across seven cases last term.
Other noteworthy shifts include the steep decline of the affirmance rate for the Thirteenth Court of Appeals (Corpus Christi–Edinburg)—falling from last term’s highest affirmance rate of 75% across four cases to 16.7% across nine argued cases this term. Moving in the opposite direction, the Third Court of Appeals (Austin) rose from a low 8.3% affirmance rate across six cases last term to 40.9% across 11 cases this term. The Fifth Court of Appeals (Dallas), meanwhile, held steady despite carrying one of the Court’s heaviest argued dockets across the last two terms, with a 29.2% affirmance rate last term and 31.8% this term.
Court watchers should keep an eye on the upcoming term—the first under the Court’s new merits regime. In January 2026, the Court changed its rules to grant review and set cases for argument based on the petition, rather than waiting for full merits briefing before deciding whether to hear the case. Whether that change will affect the Court’s affirmance and reversal rates is something we will be watching closely. For more information on the Court’s new rules, see Gibson Dunn’s past alert here.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Texas Supreme Court. Please feel free to contact the following practice group leaders:

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com	Jeffrey B. Wall +1 202.955.8533 jwall@gibsondunn.com
Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: Texas General Litigation

Trey Cox
+1 214.698.3256
tcox@gibsondunn.com

Collin Cox
+1 346.718.6604
ccox@gibsondunn.com

Gregg Costa
+1 346.718.6649
gcosta@gibsondunn.com

This alert was prepared by Texas of counsel Ben Wilson and Texas associates Elizabeth Kiernan, Stephen Hammer, and Arjun Ogale.

This update provides a brief overview of the executive privilege, summarizes OLC’s new Opinion and its potential impact on congressional investigations; and delivers actionable insights for businesses and individuals.

On August 10, 2026, the Department of Justice’s Office of Legal Counsel (OLC) issued an opinion concluding that executive privilege can shield the President’s communications with private advisers—individuals outside the Executive Branch—so long as the communications relate to official presidential decisionmaking, involve or reflect communications with the President or his direct advisers, and are confidential. See Applicability of Executive Privilege to Presidential Communications with Private Advisers, 50 Op. O.L.C. __ (Aug. 10, 2026), available here (the Opinion). The Opinion arrives at a consequential moment. Midterm elections loom, and if control of the House or Senate changes hands, so too will control of the congressional investigative agenda. A Democrat-led House or Senate would likely pursue inquiries into President Trump’s administration, businesses, and decision-making that would include document requests and hearings spotlighting administration officials and private entities with perceived ties to the Trump Administration. For those private entities, the Opinion matters: their communications with the White House may now sit within the President’s asserted zone of confidentiality, raising novel questions about whose privilege it is, what exactly the privilege covers, who may waive it, and what happens when a congressional subpoena lands on a private party’s desk rather than the government’s.

Executive privilege covers presidential communications with deliberative material and is asserted frequently when congressional committees seek documents and information from the Executive Branch. Because disputes between Congress and an administration rarely are finally decided by the courts, the governing law remains unsettled. The recent Opinion injects a significant new variable into an already murky landscape—and its breadth suggests the Executive Branch is preparing for battles with Congress.

This client alert provides a brief overview of the executive privilege, summarizes OLC’s new Opinion and its potential impact on congressional investigations; and delivers actionable insights for businesses and individuals.

I. Executive Privilege

Executive privilege allows Executive Branch officials to “resist disclosure of information the confidentiality of which they felt was crucial to fulfillment of the unique role and responsibilities of the executive branch of our government.”[1]Although the Constitution does not explicitly reference a privilege of confidentiality, the Supreme Court has held that the President has an “interest in confidentiality” “to the extent [that] interest relates to the effective discharge of a President’s powers.”[2] This doctrine—which is comprised of a “suite”[3] of separate privileges—”is founded upon the basic principle that in order for the President to carry out his constitutional responsibility to enforce the laws, he must be able to protect the confidentiality of certain types of documents and communications within the Executive Branch.”[4] The two main strands are the presidential communications privilege and the deliberative process privilege, which, while “closely affiliated” are “distinct and have different scopes.”[5] The presidential communications privilege applies “specifically to decisionmaking of the President” and is “rooted in constitutional separation of powers principles.”[6] This privilege is “invoked only rarely.”[7] The other, a far more “frequent[ly]”[8] relied upon and sweeping privilege, is the deliberative process privilege, a common-law privilege that protects executive branch decisionmaking more broadly—although, as discussed in Section III below, DOJ has long maintained that this privilege, too, has constitutional roots. Although deliberative process privilege protects communications among a broader set of people (i.e., the entire Executive Branch) and is invoked more regularly both in Congress and the courts, it applies only to predecisional and deliberative documents.[9] The presidential communications privilege, on the other hand, is not limited to documents that are predecisional.[10]

II. OLC Opinion on Executive Privilege

Earlier this month, OLC issued a sweeping opinion on executive privilege, interpreting it to apply to “presidential communications with private advisers so long as the communications relate to official presidential decisionmaking, involve or reflect communications with the President or his direct advisers, and are confidential.”[11] The underlying claim, however, is not new. In 2007, then-Solicitor General Paul Clement asserted executive privilege over White House communications with individuals outside the Executive Branch concerning the dismissal and replacement of U.S. Attorneys,[12] and, in 1974, OLC’s opined on the constitutionality of the Federal Advisory Committee Act reasoned that the President could claim privilege over the advice of private committees.[13] What is new is the Opinion’s effort to pull these strands together into a single, comprehensive framework—laying down a marker for the inter-branch disputes to come.

The 21-page Opinion carefully tracks the development of privilege doctrine from the founding era, highlighting the importance of a president’s private advisers, especially when a president determines “that a private adviser has unique insight or experience, and that full knowledge about a contemplated decision cannot be obtained through consultation only with government employees.”[14] Indeed, OLC leans heavily on the underlying purpose of the privilege and analogous privileges,[15] interpreting it broadly to allow the President and his advisers to speak freely and candidly.

The Opinion defines “private advisers” as “anyone the President consults outside the Executive Branch, whether they be members of the public, state officials, or employees of other branches of the federal government.”[16] This includes even individuals who are not technically subordinate to the President, on the basis that the President is the one asserting the privilege.[17]

Further, according to the Opinion, the privilege reaches only communications made with, or solicited and received by, the President or his “direct advisers”—a term the Opinion does not define. Nor does the Opinion, by its terms, extend to communications with agency personnel generally, or even to everyone within the White House. For this reason, third parties should not assume that every communication with “the Administration” falls within the privilege’s protection.[18] The Opinion also admits to a few other limitations, like waiver through disclosure, that would continue to limit the privilege.

Although the Opinion is formally limited to the scope of the presidential communications aspect of executive privilege, the Opinion appears at points to sweep farther, extending its reasoning to the deliberative process privilege. That application would have significant implications. As noted, the deliberative process privilege is the most expansive purported form of the executive privilege and shields communications of agency officials, not just the President.[19] That could allow the Executive Branch to claim that qualifying communications between agency officials and private individuals are privileged from disclosure.

It appears to be no accident that the OLC is releasing its Opinion in advance of the 120th Congress, which could usher in additional scrutiny of the Executive Branch; indeed, the Opinion anchors its historical analysis in the accessions of early Congresses to Presidents Washington and Jefferson’s refusals to produce certain documents to the Legislative Branch. As the Opinion notes approvingly, Rep. Samuel Sitgreaves (the first ever congressman from PA-4) reportedly submitted: “The House have made a demand on the President; the President refused it; [and] this must naturally put an end to the correspondence on this subject.”[20] Congress and the President have sparred on issues of executive privilege since the earliest days of the Republic. Through the Opinion, this Administration is doing what it can to ensure the next Congress takes its cues from Congressman Sitgreaves.

III. The Deliberative Process Privilege Explained

The “most frequent form”[21] of executive privilege is the deliberative process privilege, which allows the Executive Branch to withhold documents reflecting “advisory opinions, recommendations and deliberations comprising part of a process by which governmental decisions and policies are formulated.”[22] This common-law privilege[23] has only been given a name and some elemental formulation in the last century, but its origins are rooted in the Republic’s earliest days[24] and across the Atlantic.[25] The deliberative process privilege has been relied upon by both parties over the past many decades, including by the Obama,[26] Bush,[27] and Clinton[28] Administrations. Today, for a document to be protected by the deliberative process privilege, “it must be both predecisional and deliberative.”[29] A “predecisional” document must have been generated temporally before the agency’s final decision on the matter, as part of the process of reaching that decision. A “deliberative” document is one that reflects the “give-and-take” of the consultative process; not a recitation of facts or a final opinion.[30] The deliberative process privilege is not absolute: it can be overcome based on a number of non-exclusive factors such as the relevance of the material, the availability of evidence elsewhere, the seriousness of the matter, and the possibility of “future timidity” by government employees.[31]

Although the privilege is usually invoked in the judicial setting (especially in FOIA actions), recent caselaw, specifically the 2020 Supreme Court decision in Trump v. Mazars, implies (in dicta) that the privilege may apply before Congress too, since it is a common law privilege.[32] Note, however, whether the deliberative process privilege is anything more than a creature of the common law is itself contested. The Department of Justice has long maintained that the privilege carries constitutional force—a position the Executive Branch took in the Fast and Furious investigation,[33] and reiterated during the first Trump Administration.[34] Judge Amy Berman Jackson, in Committee on Oversight and Government Reform v. Lynch, held that there is “an important constitutional dimension to the deliberative process aspect of the executive privilege” and it may be invoked against a congressional subpoena.[35] By locating part of the privilege in the separation of powers rather than the common law, the decision treated the privilege as stronger protection against congressional demands than other courts have recognized. Few courts have engaged with that framing, and later decisions have not extended it. No federal appellate court has adopted the view that the privilege carries a constitutional dimension. The better reading is that the deliberative process privilege is primarily a common-law doctrine. That view is consistent with D.C. Circuit precedent. In re Sealed Case sharpened the distinction between the deliberative process privilege from the presidential communications privilege, which rests on separation of powers and the President’s unique constitutional role.[36] There, the court wrote that “[t]he presidential privilege is rooted in constitutional separation of powers principles and the President’s unique constitutional role; the deliberative process privilege is primarily a common law privilege.”[37] The distinction matters, and could be the basis for an inter-branch dispute, especially if Congress were to challenge the Mazars dictum about common law privileges.

Congress has long attempted to collect from private entities information denied to it by the Executive Branch. This approach was on display during the 119th Congress, where House and Senate Committees investigated former Special Counsel Jack Smith’s use of subpoenas for congressional members’ telephone records by seeking records directly from the telecommunications companies.

Ultimately, OLC’s broader executive privilege view—and whether the deliberative process privilege is implicated—may quickly come to a head in the form of third-party congressional subpoenas.

IV. Consequences of OLC Opinion

OLC’s latest Opinion is destined to ignite controversy between the Executive and Legislative branches, especially if Democrats gain control of the House of Representatives or Senate and seek to investigate President Trump, his administration, and his relationships with non-governmental officials. If Congress continues to see information from private parties as a way to probe inter-government conduct, it may run up against a privilege fight, predicated on the new interpretation that private party communications, as much as government communications, are protected. Businesses will inevitably find themselves in the middle of this fight, hoping to both cooperate with Congress while not antagonizing the Executive Branch by producing documents over which it has claimed a privilege. Indeed, businesses that have any relationship with the government could end up being subpoenaed. And although the questions raised by the Opinion will likely make their way through the judicial process eventually, companies will need to come up with a response plan far before a federal judge has had an opportunity to rule. When litigation does arise, third party custodians can expect to be affected. Because the Speech or Debate Clause immunizes congressional committees from suit (regarding actions conducted within the legitimate legislative sphere), an Executive Branch challenge to a subpoena would need to be brought against the third-party recipient of the subpoena, as occurred in Trump v. Mazars. Companies should therefore plan for the possibility of being a nominal defendant in an inter-branch dispute.

While a new Congress may feel distant, there are some things that companies can do now to minimize risk and prepare for a congressional investigation:

Start planning now. Review recent interactions with the Trump Administration and with the federal government more broadly, bringing together cross-functional teams to anticipate what might draw the focus of congressional investigators. Work with your legal team to assess what you might do in a privilege fight, including what categories of documents or communications might be covered by executive privilege, given OLC’s broadening of the privilege to cover communications with private advisers—which may very well include your company and certain executives. Now is the time to consider who are the most likely document custodians within your business, and who might have had confidential communications with the Administration.
Consider how, if at all, you might engage in a dispute over privilege. To be clear, the President owns the privilege—not the company. If a third party does not have a legitimate basis to assert privilege, and tries to assert it anyway, the company or executive risks a contempt vote or criminal referral. Fights over executive privilege are likely to be between the Executive Branch and a congressional committee, with businesses waiting on the sidelines for the results. Nonetheless, such a fight can still impact a third party waiting to see whether it will be compelled to produce certain documents or communications.
Re-assess confidentiality practices. Moving forward, it is imperative that businesses define expectations of confidentiality in writing before engaging as an adviser to the President or his advisers, so that, if Congress seeks a document production, it will be unmistakable which communications are covered by the updated definition of executive privilege.

[1] In re Sealed Case, 121 F.3d 729, 736 (D.C. Cir. 1997).

[2] United States v. Nixon, 418 U.S. 683, 711 (1974).

[3] Todd Garvey, Cong. Rsch. Serv., R47102, Executive Privilege and Presidential Communications: Judicial Principles 3 (2022).

[4] Contempt of Congress of an Executive Branch Official Who Has Asserted a Claim of Executive Privilege, 8 Op. O.L.C. 101, 115 (1984).

[5] In re Sealed Case, 121 F.3d at 745.

[6] Id.

[7] Id. at 738.

[8] Id. at 745.

[9] The deliberative process privilege is discussed more thoroughly in Section III, infra.

[10] In re Sealed Case, 121 F.3d at 745.

[11] Applicability of Executive Privilege to Presidential Communications with Private Advisers, 50 Op. O.L.C. __, (Aug. 10, 2026) (hereinafter OLC Op.) (emphasis added).

[12] Assertion of Executive Privilege Concerning the Dismissal and Replacement of U.S. Attorneys, 31 Op. O.L.C. 1, 5–6 (2007) (Clement, Acting Att’y Gen.).

[13] Constitutionality of the Federal Advisory Committee Act, 1 Op. O.L.C. Supp. 502, 506–08 (1974).

[14] OLC Op. at 13

[15] Though, after drawing upon the breadth of the legislative privilege, OLC concedes in passing that the legislative privilege—unlike executive privilege—is rooted in the Constitution’s Speech or Debate clause.

[16] OLC Op. at 3 n.1

[17] Id. at 17

[18] Id. at 18–19 & n.7 (declining to address the protections that might apply to other White House officials’ communications with private persons).

[19] Id. at 9.

[20] Id. at 6 (citation omitted).

[21] In re Sealed Case, 121 F.3d 729, 737 (D.C. Cir. 1997).

[22] Id. (quoting Carl Zeiss Stiftung v. V.E.B. Carl Zeiss, Jena, 40 F.R.D. 318, 324 (D.D.C. 1966), aff’d 384 F.2d 979 (D.C. Cir. 1967)). Indeed, the 1966 Carl Zeiss decision appears to have been the first to describe the privilege in “deliberative process” terminology.

[23] Id. at 745 (describing the deliberative process privilege as “primarily a common law privilege.”).

[24] See Russell L. Weaver & James T.R. Jones, The Deliberative Process Privilege, 54 Mo. L. Rev. 279, 284–85 (1989) (describing assertions of executive privilege by Presidents Washington and Jackson).

[25] See, e.g., Smith v. E. India Co., 41 Eng. Rep. 550, 552 (Ch. 1841).

[26] See Assertion of Executive Privilege Over Deliberative Materials Generated in Response to Congressional Investigation Into Operation Fast and Furious, 36 Op. O.L.C. 1, 3 (2012) (Holder, Att’y Gen.).

[27] Exec. Order. No. 13233, 66 Fed. Reg. 56025 (Nov. 5, 2001) (discussing the scope of the executive privilege, including “the deliberative processes of the President or his advisors”).

[28] Assertion of Executive Privilege with Respect to Clemency Decision, 23 Op. O.L.C. 1 (1999).

[29] Comm. on Oversight & Gov’t Reform v. Lynch, 156 F. Supp. 3d 101, 109 (D.D.C. 2016).

[30] NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 150–51 (1975).

[31] Lynch, 156 F. Supp. 3d at 112–13.

[32] Trump v. Mazars USA, LLP, 591 U.S. 848, 863 (2020).

[33] See Assertion of Executive Privilege Over Deliberative Materials Generated in Response to Congressional Investigation Into Operation Fast and Furious, 36 Op. O.L.C. 1, 2–3 (2012) (Holder, Att’y Gen.).

[34] Attempted Exclusion of Agency Counsel from Congressional Depositions of Agency Employees, 43 Op. O.L.C. 131, 139 n.2 (2019); Congressional Oversight of the White House, 45 Op. O.L.C. __, at *30–33 (Jan. 8, 2021).

[35] Lynch, 156 F. Supp. 3d at 104.

[36] In re Sealed Case, 121 F.3d 729, 745 (D.C. Cir. 1997).

[37] Id. at 745.

The following Gibson Dunn lawyers prepared this update: Michael Bopp, Barry Berke, Stuart Delery, Thomas Hungar, Matt Owen, Susan Pelletier, Kareem Ramadan, and David Offit.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any of the following members of the firm’s Congressional Investigations or Public Policy practice groups:

Michael D. Bopp – Chair, Congressional Investigations Practice,
(+1 202.955.8256, mbopp@gibsondunn.com)

Barry H. Berke – Co-Chair, Litigation Practice,
(+1 212.351.3860, bberke@gibsondunn.com)

Stuart F. Delery – Co-Chair, Administrative Law & Regulatory Practice,
(+1 202.955.8515, sdelery@gibsondunn.com)

Thomas G. Hungar – Partner, Appellate & Constitutional Law Practice,
(+1 202-887-3784, thungar@gibsondunn.com)

Matthew S. Owen – Partner, Congressional Investigations Practice,
(+1 202.955.8616, mowen@gibsondunn.com)

Susan M. Pelletier – Of Counsel, Public Policy Practice,
(+1 202.887.3541, spelletier@gibsondunn.com)

Jillian N. Katterhagen – Associate, Congressional Investigations Practice,
(+1.202.955.8283, jkatterhagen@gibsondunn.com)

Alexandria Murphy – Associate, Congressional Investigations Practice,
(+1 202.777.9406, amurphy@gibsondunn.com)

David Offit – Associate, Congressional Investigations Practice,
(+1 202.887.3581, doffit@gibsondunn.com)

Kareem W. Ramadan – Associate, Congressional Investigations Practice,
(+1.202.887.3542, kramadan@gibsondunn.com)

Kelly M. Yahner – Associate, Congressional Investigations Practice,
(+1.202.777.9581, kyahner@gibsondunn.com)

From the Derivatives Practice Group: This week, the CFTC published a Notice of Proposed Rulemaking seeking public comments on proposed amendments to remove the order book requirement for swap execution facilities.

New Developments

Chairman Selig Announces Agenda for August 20 Innovation Advisory Committee Meeting in Washington. On August 13, CFTC Chairman Michael Selig, sponsor of the Innovation Advisory Committee (IAC), released the agenda for the IAC’s inaugural meeting on Thursday, August 20. Attendees will discuss topics related to the regulation of crypto assets, artificial intelligence, and prediction markets. View the full agenda here.

CFTC Releases Advisory on Self-Certification of Incentive Programs for Prediction Markets. On August 12, the CFTC’s Division of Market Oversight issued an advisory reminding designated contract markets of their regulatory obligations when submitting self-certifications for market-maker, liquidity, trading, or incentive programs under CFTC Regulations 40.5 and 40.6. This advisory addresses concerns regarding an increasing number of incentive‑program rule filings submitted under CFTC Regulation 40.6(a)—particularly those relating to event contract products—that contain procedural or substantive deficiencies.

New Developments Outside the U.S.

New Industry-Led Developments

ISDA, AFME Respond to EBA on Taxonomy Disclosures Delegated Act. On August 12, ISDA and the Association for Financial Markets in Europe (AFME) responded to the European Banking Authority’s discussion paper on certain taxonomy key performance indicators (KPIs) and other aspects of the Disclosures Delegated Act under Article 8 of the Taxonomy Regulation. The associations stated that they support the European Commission’s ongoing efforts to simplify the EU Taxonomy reporting framework and caution against the introduction of additional KPIs in the absence of clear use cases or demonstrated investor demand.

ISDA Responds to JSCC Consultation on Clearing Fund Consolidation. On August 12, ISDA responded to the Japan Securities Clearing Corporation’s (JSCC) consultation on its proposal to consolidate clearing fund consumption, calculation and deposit segmentation across six clearing qualifications under the Financial Instruments and Exchange Act. ISDA members broadly support the JSCC’s objective to achieve greater capital efficiency, diversification benefit, and operational simplicity consistent with default fund frameworks at other major central counterparties.

The following Gibson Dunn attorneys assisted in preparing this update: Jeffrey Steiner, Adam Lapidus, Hayden McGovern, Karin Thrasher, and Alice Wang.

Jeffrey L. Steiner, Washington, D.C. (202.887.3632, jsteiner@gibsondunn.com)

Michael D. Bopp, Washington, D.C. (202.955.8256, mbopp@gibsondunn.com)

Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)

Darius Mehraban, New York (212.351.2428, dmehraban@gibsondunn.com)

Jason J. Cabral, New York (212.351.6267, jcabral@gibsondunn.com)

Adam Lapidus, New York (212.351.3869, alapidus@gibsondunn.com )

Stephanie L. Brooker, Washington, D.C. (202.887.3502, sbrooker@gibsondunn.com)

William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com )

David P. Burns, Washington, D.C. (202.887.3786, dburns@gibsondunn.com)

Marc Aaron Takagaki, New York (212.351.4028, mtakagaki@gibsondunn.com)

Hayden K. McGovern, Dallas (202.887.3569, hmcgovern@gibsondunn.com)

Karin Thrasher, Washington, D.C. (202.887.3712, kthrasher@gibsondunn.com)

Alice Yiqian Wang, Washington, D.C. (202.777.9587, awang@gibsondunn.com)