Month: October 2026

On October 2, 2026, Brazil’s National Data Protection Authority (ANPD) and Portugal’s National Data Protection Commission (CNPD) signed a memorandum of understanding at the CNPD’s headquarters in Lisbon. The agreement was signed by Waldemar Gonçalves, president of the ANPD, and Paula Meira Lourenço, president of the CNPD.

The memorandum creates a framework for technical cooperation, staff training, and the exchange of knowledge and experience, with the goal of strengthening the effective application of Brazil’s General Data Protection Law (LGPD) and the European Union’s General Data Protection Regulation (GDPR). The authorities plan to jointly prepare and publish guides, tools, and guidance materials to support the practical application of both laws, make compliance easier for organizations that process personal data, and improve their supervisory and regulatory activities through integrated training programs.

The signing followed the ANPD’s participation in the second High-Level Policy Dialogue on Data Governance, held in Madrid on September 29 and 30, 2026, under the European Union, Latin America and Caribbean Digital Alliance, where cross-border data transfers and the impact of artificial intelligence on data protection were among the topics discussed. The memorandum does not itself authorize new international data transfers, but it signals closer alignment between the two regulators, which is relevant for companies operating in both Brazil and Portugal.

On October 6, 2026, the Delaware Supreme Court affirmed a decision of the Court of Chancery allowing ATG Capital Management’s four board nominees to stand for election at the annual meeting of Empery Digital Inc. (Nasdaq: EMPD), scheduled for October 14, 2026. The Supreme Court ruled one day after oral argument and less than a week before the meeting.

In its August 28, 2026 decision, the Court of Chancery found that ATG Capital’s nomination notice was valid and that Empery Digital’s board breached its fiduciary duties by rejecting it. On appeal, the company’s directors argued that ATG had failed to disclose an alleged voting arrangement with another stockholder. The Supreme Court left the Chancery judgment in place.

ATG Capital and its affiliates own about 4.5 million shares, roughly 16% of the company, making it the largest non-affiliated stockholder. Under the SEC’s universal proxy rules, its nominees will appear alongside the company’s candidates on both proxy cards, and the three leading proxy advisory firms, ISS, Glass Lewis, and Egan-Jones, have recommended that stockholders use ATG’s card. The ruling reinforces Delaware’s protection of the stockholder franchise and is a reminder to boards that nomination requirements must be applied consistently with their fiduciary duties, so that stockholders keep a real choice in contested elections.

On October 6, 2026, the Internal Revenue Service issued Revenue Procedure 2026-20, which clarifies, modifies, and supersedes Revenue Procedure 2025-31, the safe harbor for investment trusts and grantor trusts that stake digital assets. The central concern for these vehicles is that staking could be treated as a power to “vary the investment” of certificate holders, which could cost the trust its classification as an investment trust and lead to its reclassification as a business entity for tax purposes.

The new guidance responds to questions raised by practitioners after the 2025 safe harbor was issued. It confirms that a trust’s digital assets may be held by one or more custodians. It requires that the trust be indemnified against slashing penalties arising from events reasonably within the staking provider’s control. It also permits contingent liquidity arrangements, such as a lending facility or an agreement to buy or sell digital assets, to help the trust meet redemption requests, although an arrangement the trust treats as a borrowing for federal income tax purposes does not qualify.

Staking rewards must consist of additional units of the same digital asset the trust already holds and, after expenses, must be distributed to holders in kind or in cash no later than 60 days after the end of the calendar quarter in which the trust gains control over them. Trusts have six months from October 6, 2026 to amend their trust agreements and procedures, and trusts that complied with the 2025 safe harbor may continue to rely on it during that period only. The revenue procedure applies to tax years ending on or after October 6, 2026.

On October 1, 2026, the U.S. Securities and Exchange Commission issued a proposal titled “Adviser and Regulated Fund Custody Rules; Crypto Custody Rules.” The package addresses, for the first time in a dedicated framework, how registered investment advisers may hold client crypto assets and how regulated investment companies may custody crypto securities and similar investments.

Under the proposal, advisers and regulated funds could self-custody crypto assets in specified circumstances, or hold them through state-chartered trust companies, subject to conditions. The SEC also proposes to modernize the existing custody rules to reflect current industry practice and market feedback, update related reporting and recordkeeping requirements, and redesignate the custody rule under the Investment Advisers Act.

The measures are proposals only and do not yet change current obligations. Public comments are due by December 7, 2026, under File No. S7-2026-35. Advisers, fund sponsors, and custodians active in digital assets should review the proposal and consider participating in the comment process, since the final rule is likely to shape custody arrangements and service-provider contracts going forward.

On September 30, 2026, U.S. District Judge Araceli Martínez-Olguín approved Paramount’s settlement with 12 states challenging its acquisition of Warner Bros. Discovery. The Associated Press report values the transaction at approximately $81 billion, or $111 billion including debt, and identifies October 6 as the expected closing date rather than stating that closing has already occurred.

Over five years, the settlement requires at least $1.5 billion in additional U.S. film production and $47.5 million for displaced workers’ training and career development. It also requires distribution of at least 30 theatrical films annually for two years and 32 annually for the following three years, with at least half produced or jointly produced by the combined company. Reported consequences for failure to meet the film commitments include Miramax divestiture and a $30 million payment per missed film to designated industry benefit funds.

Other provisions require separate negotiations for Paramount’s and Warner’s basic cable channels for five years and establishment of a CBS/CNN editorial board within 180 days after closing. The editorial board must comprise five active or retired journalists with at least 10 years of experience, appointed by and reporting to the combined company’s board for three-year terms. Colorado and Washington declined to approve the editorial-board terms. The settlement illustrates the significance of detailed post-closing commitments, continuing compliance, and potential structural consequences in negotiated merger remedies.

Source: Associated Press via ABC News

On September 28, 2026, the IRS issued Revenue Ruling 2026-20, while Treasury and the IRS issued Notice 2026-62 addressing investment-fund tax strategies. The ruling concerns an investor’s contribution of appreciated securities to a newly formed ETF, followed under the same plan by distribution of some or all of those securities to an authorized participant redeeming ETF shares.

Although designed to obtain nonrecognition treatment under Sections 351 and 852(b)(6), the specified arrangement is treated as a taxable exchange under Section 1001 through substance-over-form and step-transaction principles. This conclusion concerns the particular prearranged transaction described, not every ETF contribution or in-kind redemption.

The notice requests information on related partnership structures, ETF record-date strategies, box-spread ETFs, use of redemption rules to circumvent the regulated investment company qualifying-income test, and certain arrangements generating capital gains alongside ordinary losses. According to KPMG’s analysis, further guidance could apply retroactively, and the IRS may challenge these strategies under existing law. For family offices, investment managers, and advisers handling concentrated appreciated portfolios, the development underscores the importance of reviewing the substance and sequencing of transactions rather than relying only on their formal steps.

Source: KPMG TaxNewsFlash

On September 24, 2026, the Federal Reserve requested public comment on two proposals implementing its responsibilities under the GENIUS Act for Board-supervised payment stablecoin activity. The first would require issuers to fully back stablecoins with permissible reserve assets, including short-term Treasury bills and other specified high-quality liquid assets, and would establish capital requirements addressing certain credit and operational risks, together with risk-management standards.

The proposal would also address safekeeping of reserve assets and clarify the permissibility of stablecoin-related activities for Board-supervised banks. The second proposal establishes application procedures for Board-supervised insured depository institutions seeking approval for a subsidiary to issue payment stablecoins. Applications would include business plans, financial information, and other documentation, with procedures for appeals, hearings, and final determinations.

Both measures remain proposals, and comments are due 60 days after publication in the Federal Register. The announcement does not identify a calendar deadline, detailed capital ratios, or approval of any particular issuer. For banks, fintech sponsors, and cross-border payment businesses, the proposals provide a framework to assess prospective reserve, custody, capital, and authorization requirements, without treating those requirements as final.

Source: Federal Reserve Board

On September 30, 2026, the Securities and Exchange Commission proposed measures intended to broaden access to private equity, private credit, real estate, and venture-capital investments. The initiative includes five separate notices concerning potential accredited-investor eligibility for accountants, chartered financial analysts, certified financial planners, investment-banking license holders, and licensed research analysts.

A separate proposal would expand the circumstances in which investment advisers may charge performance fees linked to clients’ capital gains, moving beyond the existing qualified-client limitations described in the report. Another proposal would permit monthly redemptions and additional share classes for closed-end funds. Industry supporters welcomed broader investment opportunities, while critics raised concerns about investor protection, valuation, and incentives for advisers to take greater risks.

The measures remain proposals subject to public comment, not permissions already in force. For wealth managers, fund sponsors, and families evaluating private-market allocations, the central issue is how broader access would interact with liquidity limitations, valuation practices, and conflicts arising from performance-based compensation.

Source: Reuters