Regulatory Scrutiny

Key EU Body

Regulatory Scrutiny Board (RSB)

Impact on M&A

Influences deal viability, strategic planning, and potential for delays or blockages.

Key U.S. Agency

Federal Trade Commission (FTC)

Leadership (FTC)

Lina Khan

Primary Objective

Ensuring compliance with antitrust, consumer protection, and industry-specific laws.

Tools of Scrutiny

Impact assessments, Civil Investigative Demands (CIDs), and fitness checks.

Financial Sector Driver

2008 Global Financial Crisis and subsequent G20 reforms.

Significant M&A Example

Google's potential $34 billion acquisition of HubSpot

2008-01-01

2017-01-01

2018-01-01

2019-01-01

2020-01-01

2022-08-19

2023-01-01

The Regulatory Scrutiny Board is an independent body within the Commission that advises the College of Commissioners. It provides central quality control and support for Commission impact assessments and evaluations at early stages of the legislative process (Figure 1). The Board’s work on impact assessments strengthens subsequent evaluations, and vice versa (Figure 2). [...] 2020 - Networking Event on the Role of Scrutiny in Better Regulation Virtual Networking 2019 - Third Annual Conference on Regulatory Scrutiny in the EU 2018 - Second Annual Conference on Regulatory Scrutiny in the EU 2017 - First Annual Conference on Regulatory Scrutiny in the EU [...] The Board does not review all Commission evaluations: only a number of major evaluations is selected each year, based on relevance and political priorities of the Commission. ‘Fitness checks’ are always scrutinised. All impact assessments and the related opinions of the Board are published online once the Commission has adopted the relevant proposal. Reports of evaluations and fitness checks and the related Board opinions are also published online.

Regulatory scrutiny refers not just to the extent of and exigency of regulation but to the expectations of regulators and the likelihood of supervisory and enforcement action. While regulation has been growing in many jurisdictions over the last few decades, the financial crisis of 2008 provided a worldwide push — leading to a greater level of regulation and supervision of financial institutions. Globally agreed reforms through the G20 strengthened the balance sheets of banks and insurers, [...] Undoubtedly, it will bring greater scrutiny of financial institutions' implementation, requiring clear strategies based on thorough and current risk assessments. [...] toward their mitigation, and even elimination, where possible. What has been the experience from the pandemic?

Regulatory scrutiny and enforcement activities will increase. Examinations and investigations under existing regulations will increase in scope coverage as regulatory “perimeters” expand via established jurisdictional authorities. Divergences and debate on jurisdictional authorities will continue across federal, state, and global regulations and frameworks—exacerbated by social and political divides as well as a heightened value to “regulatory democratization.” [...] 1. Careers 2. Culture View all Careers Download PDF Share # Scrutiny and Divergence: 2023 Regulatory Challenges Insights on increased supervision and enforcement, regulatory democratization and divergence, and the three lines of defense [...] Explore here insights on Scrutiny and Divergence from the KPMG report Ten key regulatory challenges of 2023. 1 ### Increased supervision and enforcement Regulators will continue to apply existing regulations to new products and service areas. This will bring heightened scrutiny to areas of ethics and conduct and consumer and investor protections, and will lead to expanded examinations and increased volumes of regulatory matters tied to business, technology, operations, and risk functions.

Regulatory scrutiny continues to shape the M&A environment. Heightened antitrust scrutiny has already transformed the once-familiar playing field into a maze. Dealmakers must also check whether approvals are needed under foreign investment regimes (which have proliferated and expanded to cover more transactions and industries) and under the EU Foreign Subsidies Regulation (where mandatory notification rules will apply to many transactions where the target generates significant EU turnover, not [...] Careful planning is essential to avoid delays, blocked deals and unforeseen hurdles. It’s risky to wait for red flags from regulators before considering remedies. Concerns need to be identified early in the deal process so that the impact on overall deal success can be evaluated. Working with regulators from multiple jurisdictions can add complexity to and delay approvals, given different perspectives. [...] counsel should play particular attention to vetting materials before they are finalized).