Comment letters that Democrat and Republican legislators submitted with respect to the initial concept release reflect the divergent economic philosophies of the political parties. Senator Sherrod Brown that the proposed rule changes would allow companies to pay their workers in stock when they are most in need of "a steady paycheck." By contrast, Patrick McHenry, the Republican Ranking Member of the House Financial Services Committee, for the benefits of allowing equity compensation for…

Although the guidance is purportedly directed to Chinese issuers, the real target is likely to be U.S. financial intermediaries (i.e., broker-dealers and advisers). It puts these firms on notice that there are additional risks in distributing, trading, or investing in Chinese issuers. In the event the price of one of these issuers plummets, a plaintiff will be able to point to the SEC's guidance and complain that a financial intermediary, who owed it some duty of care or prudence, failed to…

Commissioner Berkovitz' statement raises an issue as to whether there will be a second CFTC study after a change in administrations, with the possibility that such a study may lead to additional rulemaking.

In the securities markets, the SEC has the ability to require FINRA and the exchanges to adopt and enforce rules and generally to serve as an agent of the government. As a result, securities firms generally view FINRA as being closer to a policing agency than a representative of broker-dealer views. NFA is not as far down that road, though gradual movement in the perception of the SRO from membership organization to agent of the government would not come as a surprise. It is reasonable to…