And the Financial Times gives us a peek. However, there does not seem to be much to this story.  The Treasury apparently is simply reaffirming its preexisting policy that its threshold for determining whether it review a transaction is not based on a hard number--generally, it has been thought that CFIUS, which reviews sovereigns welath fund transactions, would not undertake a formal review if the SWF's stake amounted to less than 10% of a company.  However, practitioners (and their SWF clients) have understood that CFIUS takes a look at whether a transaction implicates control, which is not dependent on any set percentage of investment.  Certainly, it is usually the case that an investment of 10% will not implicate control, but in practice CFIUS takes a look at whether even investments at less than 10% could be considered control transactions (which would then fall under their jurisidiction and require a formal review).  There is so much at stake politically in these determinations, and it does not seem to me that CFIUS takes them lightly even at a less than 10% investment level.  The new regulations will simply clarify this position, and I do not think that they will change the nature of CFIUS's practice.

The FT suggests that the new rules are problematic because they indicate that CFIUS is overly sensitive to Congressional complaints (Barney Frank, among others, has been suspicious of SWFs).  In an article on SWFs that I am trying to finish up, I also argue that Congressional meddling in the CFIUS process is a concern.  Again, though, the reports about the content of the rules only suggest a affirmation of existing practice, not a significant regulatory shift as a result of Congressional pressure.

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