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We help clients achieve their strategic goals globally by tapping into business opportunities in India.

Your business operates in a global marketplace. Your lawyers should too. That’s why Investment banks, Indian entities, and foreign companies investing in India turn to Dorsey for a variety of international matters. We connect clients to opportunities through foreign financiers, M&A buyers and sellers, and business contacts and provide commercially focused advice on transactions involving the Indian sub-continent and globally.

Our India practice is supported by a network of Dorsey lawyers in Hong Kong, London, and North America. We help clients with:

  • Public and private offerings of securities, both in India and overseas
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We were among the first international firms to recognize the opportunities and possibilities afforded by the India capital markets boom, and we have become a key player in the Indian market. We work with major global and local investment banks and Indian companies on a range of international securities offerings, and we collaborate closely with leading Indian law firms to ensure that our clients receive appropriate legal advice in their international dealings.

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Client Alert

What do Indian Entities Need to Know about MiFID II?

April 6, 2020

The Markets in Financial Instruments Directive (“MiFID II”), which came into effect on 3 January 2018, is a European legislation, consisting of two parts, the MiFID II directive (2014/65/EU) and the MiFIR regulation (2014/600EU) that has certain far reaching implications on the Asia Pacific Region including India. The 2008 financial crisis highlighted the need for greater investor protection and robust regulatory framework and thus the first iteration, MiFID I, came into effect which subsequently expanded through MiFID II. The aim of this regulatory framework was to provide more transparency to investors (“Objective”) which in-turn laid the foundation for more robust global markets and cast additional compliance obligations on underwriting entities that came within the purview of MiFID II and were engaged in an international bond offering by an Indian entity (“International Bond Offering”). This alert (Alert) discusses the top five common queries that are often raised in relation to Indian entities, which could fall within the impact of MiFID II and are engaged in International Bond Offerings either as an underwriter or as an issuer. We hope you find the issues raised in this Alert useful and reach out to the Dorsey team members in case of any questions. MiFID II - Response to Top Five Questions 1. What is an In-scope Entity for purposes of MiFID II? Even though MiFID II is a European regulation, in the context of an International Bond Offering, MiFID II still has potential implications for underwriting entities that interact with European Economic Area (“EEA”) or have branches or subsidiaries in the European Union (“EU”). To be precise, MiFID II may be applicable to entities that: have authorized branches or subsidiaries in the EU; trade or service EU clients/markets and deal with EU counterparties; distribute products in the EEA; arrange back-to-back trades via an EEA entity; distribute EEA manufactured products in India; trade on EEA venues/EEA underlying’s on non-EEA venues; and/or provide execution and research to EEA managers. Any of the above would come within the purview of MiFID II. Therefore underwriting entities that are generally engaged in an International Bond Offerings will all likely fall within the scope of MiFID II (“In-scope Entities”). 2. Who is a “distributor” or a “manufacturer”? MiFID II sought to achieve its Objective by introducing a new classification based on the two broad types of responsibilities usually handled by underwriters mainly those who limit their responsibilities to (i) marketing, offering and placing of the relevant securities in the European Economic Area (EEA), and others (ii) that are involved in the actual underwriting and allocation process. The underwriters engaged in the former activity would be classified as “distributors” and the latter as “manufacturers”. Therefore, where an underwriting entity that is a settlement bank, arranger, a joint global coordinator or a joint lead manager, it would be called a “manufacturer”.  In all other situations, an underwriter entity would be a “distributor” unless such an entity is playing a very inactive role on the transaction (for example where such underwriter has lent its name to the transaction for a certain fee mainly for inclusion of its name for league table purposes etc.) in which case such an entity would not even be a “distributor”. However, for an underwriter to be classified as a “distributor” or “manufacturer” under MiFID II, the entity must first be an In-scope Entity. 3. What are the obligations of an In-scope Entity underwriter that acts as a “distributor” and a “manufacturer” in the context of an International Bond Offering? At the onboarding stage, In-scope Entities should appropriately classify clients and identify the suitability and appropriateness of the relevant product that such In-scope Entities are planning to trade with or introduce to such clients, based on the clients’ knowledge, skill and experience. Therefore the focus at this stage is on the right research so that In-scope Entities are able to offer and recommend products and services as per the needs and characteristics of the target market. In brief, the manufacturer’s obligation is to determine the target market and to keep it current.  The distributer’s obligation is to feed information back to the manufacturer.  If there is no manufacturer or if the distributer hasn’t received any information from the manufacturer, the distributer must then determine the target market on its own. Also, the manufacturers are under a duty to disclose the broad regulatory framework governing the International Bond Offering and the allocation policy by which the securities are sought to be allotted to the prospective Indian issuer. However where the lead bank is a non-MiFID II entity then the responsibility would fall on the In-Scope Entities that are “distributors” to share such information with the prospective Indian issuer. Needless to say, in compliance with the basic objective of MiFID II, In-scope Entities (both manufactures and distributors) would need to demonstrate that they have mechanisms and processes in place to ensure transparency and ensure best practices for their interactions with EU counterparties or at their authorized branches or subsidiaries in the EU and the EEA.  It may also be worth mentioning here that MiFID II requires In-scope Entities to forecast transaction costs that the client would have to pay and to that extent make such disclosure to the client. This obligation to disclose costs would be applicable on all EU firms that are involved in any kind of non-EU entity trades and by that extent would be applicable to all In-scope Entities that may have to help EU entities with appropriate disclosure under MiFID II requirements. 4. What are the obligations of an In-scope Entity that acts as an issuer or a research provider in the context of an International Bond Offering? All Indian entities including prospective issuers, that wish to trade with EU licenses traders must get a legal entity identifier number often referred to as the LEI number. LEI number is a 20 digit character, alpha-numeric unique identification number that identifies legal entities or structures and MiFID II mandates that clients be identified by way of their LEI numbers. A point to note here is that MiFID II also impacts In-scope Entities providing research facilities to EU clients. This is so because while in the past research services were provided as a free add on-incentive and costs of such research was often bundled together with other services to be provided by an entity to its new clientele, MiFID II mandates that EU firms receiving such service unbundle research cost from the execution cost. Thus, there is a possibility that In-scope Entities providing research facilities to EU clients may be affected under various fee or commission sharing agreements or research-sharing work-scope. Further, at the post-trading stage, relevant Indian entities acting as issuers may be required to provide detailed sales information to the “manufacturer” to help the “manufacturer” meet the manufacturer’s own obligation under MiFID II. For example, for dual listed securities, EU counterparties may request post-trade and transaction reporting from the relevant Indian entity and to that extent Indian entities would need to identify the dual-listed instruments it trades in to determine MiFID II’s impact on trading activity of such instruments. It is therefore important for Indian In-scope Entities acting as prospective issuers to identify all EU counterparties involved in the transaction, at the pre-execution stage itself and understand the information and obligation that such Indian entities would have to comply with in order to facilitate compliance of various obligations by their different EU counterparties’ under MiFID II.  Similarly, as MiFID II requires that financial instruments be traded on an EEA venue or an equivalent third country venue, Indian In-scope Entities who wish to list or facilitate listing on two or more exchanges need to make sure that the additional local markets (other than the EEA exchange) to which listing is sought must be equivalent to that of the EEA venue. Thus in the above background, Indian In-scope Entities acting as issuers, may have to put in place new systems and controls to monitor and manage their compliances under MiFID II as well as implement strict measures to monitor exchange of data with any EU or EEA entity or EU or EEA regulator. Further, though record-keeping is not expressly mentioned for non-EU entities, given that certain Indian In-scope Entities acting as prospective issuers, may be a member of an EU exchange, the obligation of record keeping may extend to such Indian entities to the extent that the EU venue would need relevant information from all such Indian entities listed on its exchange for purposes of complying with the Exchange’s own obligations under MiFID II. 5. What post-closing steps must In-scope Entities acting as underwriting undertake for showing compliance towards MiFID II? Below are some of the steps that an underwriter may take as proof of compliance towards MiFID II. Maintain records of the instruction content and timing received from clients. Maintain allocation records that would provide a complete audit trail between the movements registered in clients’ accounts and the instructions received. Maintain records of discussions and instructions or preferences provided by the issuer client, other members of the syndicate, on the allocation process, including any allocation requests received from investment clients. Maintain records of final allocation and justifications of such allocation made to each investment client. Conclusion While it is evident that MiFID II does not expressly set out its extra-territorial reach like that of the Market Abuse Regulation and clearly states that it is only applicable to EU investment firms, one cannot ignore the extra-territorial effect of MiFID II. Even though the primary obligation of compliance under MiFID II is on EU/EEA entities, as most trades today involve non-EU entities (like that of Indian corporates and underwriters), the net of MiFID II compliance is cast much wider and such non-EU entities therefore also become bound by MiFID II regulations by virtue of being the sub-entities that facilitate the ultimate compliance of the EU entities with their MiFID II obligations. Further, as it is not always clear from a reading of MiFID II regulations as to what are the specific compliances that In-scope Entities would need to comply with, given that such compliance requirements vary from situation to situation. Therefore it is imperative that In-scope Entities understand and receive the right advice on their compliance obligation under MiFID II so that they continue to transact with EU entities with ease. At Dorsey, our India desk co-chaired by David Cameron and Kenneth Kwok and supported by Senior Associate Debolina Saha is well-versed with the peculiar challenges that In-scope Entities routinely face. Coupled with our London in-house team, which is also able to assist with queries in relation to MiFID II, Dorsey is uniquely placed to answer any queries that Indian entities may have on MiFID II and MiFID II’s extra-territorial effects. Please contact our team below with any questions or for further assistance. Debolina Saha Senior Associate Dorsey & Whitney LLP One Pacific Place, Suite 3008 88 Queensway Hong Kong Phone: (852) 2105-0289 Fax: (852) 2524-3000  

Articles

The India Opportunity

November 8, 2019

Firm Highlights

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Energy Law: Month in Review - September 2026

Welcome to Dorsey’s Energy Law: Month in Review. We provide this update to our clients to identify significant developments in the previous month. Please reach out to any of the authors, listed above, to discuss these issues. Regulatory Developments Massachusetts Ratchets Up State and Local Regulation of AI Data Centers In early September, Governor Maura Healey of Massachusetts signed an executive order requiring that artificial intelligence data centers secure the approval of local communities as a precondition to proceeding with a given project. According to the terms of the order, data center developers will need to secure a “community benefits agreement” as a precondition to receiving permits from numerous state agencies, including the Department of Environmental Protection, the Energy Facilities Siting Board, and the Massachusetts Environmental Policy Act Office. Beyond requiring community benefits agreements, the order also mandates that developers mitigate utility costs to consumers, prohibits the use of nondisclosure agreements, and requires various state agencies to develop measures to limit data center impacts on the environment. North Carolina Regulators Decline Approval of Duke Energy Gas Turbine On September 18, 2026, North Carolina Utilities Commission (NCUC) denied Duke Energy’s application for a certificate of public convenience and necessity required to construct a gas-fueled combustion turbine at its Smith Energy Complex in North Carolina. The NCUC objected strongly to the $584 million price tag and noted that Duke appeared to be constructing the facility “based on anticipated data center customer additions.” The NCUC rejected that anticipated growth as “insufficiently reliable for the Commission to act at this point.” In rejecting Duke’s application, the NCUC also noted that Duke had signed the White House Ratepayer Protection Pledge, in which it represented that it would not shift data center costs to consumers. The NCUC observed that the record did not demonstrate how Duke “intends to adhere to its commitments under the Ratepayer Protection Pledge with regard to the Proposed Facility.” Notably, commission staff had actually supported the construction of the turbine, citing concerns about Duke’s reserve margins. The NCUC noted that it “understands the Public Staff’s expressed concerns,” but those concerns were outweighed by the NCUC’s reservations, including questions of demand. Department of Energy Approves Funds for Grid Improvement The U.S. Department of Energy (DOE) recently announced that it would fund 31 grid-improvement projects in 26 states. The funding initiative is part of the DOE’s “SPARK” initiative. The funding will include $1.9 billion in federal funding from DOE and $3.35 billion in recipient cost-sharing funding. The funds will go to projects designed to improve grid reliability and lower electricity costs. Recipients plan to reconductor over 1,500 miles of transmission lines and will deploy grid-enhancing technologies across approximately 21,000 miles. DOE stated that this initiative will make available over 23 additional gigawatts of electricity. Texas Moderates Rules Governing Data Center Interconnection The Texas Public Utility Commission adopted new regulations governing large-load interconnections. The rules impose a flat study fee of $100,000 for all proposed interconnections, which departs from the initial proposal to impose study fees using a tiered system based on project size. Additionally, the final rule eliminates the PUC’s previous proposal to impose a non-refundable interconnection fee of $50,000 per MW of contracted peak demand. The final rule also moderates the initially proposed regulations governing Electric Reliability Council of Texas (ERCOT) notifications for large-load customers’ non-utilized capacity. The proposed rules would have required notifying ERCOT within 30 days of missing a scheduled energization milestone by six months. The final rules, however, do not require informing ERCOT unless a scheduled energization milestone is missed by 24 months. FERC Denies TransAlta 202(c) Cost-Recovery Plan The Federal Energy Regulatory Commission (FERC) recently rejected TransAlta’s plan to recover $19.9 million in expenses stemming from a DOE order in which DOE prohibited TransAlta from retiring its coal-powered Centralia power plant. TransAlta had previously intended to retire the facility at the end of 2025. TransAlta’s cost recovery plan proposed spending an additional $23 million on repairs to continue operating the unit. FERC’s main objection had to do with geographic scope. TransAlta’s recovery plan called for recovering costs from California Independent System Operator (CAISO) and the Southwest Power Pool (SPP), but the DOE’s order requiring operation of the plant was designed to ensure reliability in the Northwest assessment area (Montana, Oregon, Washington, and parts of northern California and northern Idaho). Accordingly, FERC was unwilling to allow cost recovery from CAISO and SPP when the order that precipitated the additional costs only related to the Northwest assessment area. FERC informed TransAlta that it would only approve cost recovery from load-serving entities in the Northwest assessment area. FERC’s decision comes amid a rush of DOE emergency orders requiring the continued operation of coal-fired generating units. Litigation Appeals Court Upholds Washington Hydropower Plant With Caveats In a September 21, 2026, opinion, the Washington Court of Appeals largely upheld a Clean Water Act water quality certification by the Washington Department of Ecology for the Goldendale Energy Storage Project, a proposed pumped-water storage hydropower system adjacent to, but off-stream from, the Columbia River. A nonprofit (Columbia Riverkeeper) and the Confederated Tribes and Bands of the Yakama Nation appealed the certification, contending that it failed to impose necessary conditions and monitoring requirements to protect the water quality of the Columbia River. Most saliently, the plaintiffs argued that the project had the potential to leak 100 acre-feet of water per year into tributaries of the Columbia River. The Court of Appeals broadly rejected plaintiffs’ challenge to the state’s conclusion that “the project was designed not to leak.” That said, the Court of Appeals did reverse on one narrow issue. Specifically, the court determined that the state’s conclusion that “leakage from the project’s tunnels would be monitored and reported” was not supported by the evidence because the certification “does not explicitly require monitoring and reporting to determine whether there is any leakage.” Accordingly, the court remanded the matter to the state to impose monitoring and reporting requirements but otherwise affirmed the certification. Legislative Developments California Legislates Restrictions on Data Center Energy Use and Grid Costs On September 21, 2026, California Governor Gavin Newsom signed seven bills broadly regulating data centers in the state. SB 1168 directed the California Public Utilities Commission to assess the energy used by data centers. It also requires the PUC to pass costs of transmission and distribution upgrades and load increases on to data centers, rather than customers. SB 886 and SB 887 compel data centers to pay for infrastructure upgrade and generation costs, and wildfire mitigation costs, in addition to imposing environmental review. The statutes additionally increase local oversight of data centers. AB 1577 imposes a monthly reporting requirement that requires data centers to supply energy consumption and efficiency data to the California Energy Commission. AB 2383 contains incentives for data centers to use onsite clean energy generation. Finally, AB 2469 and AB 2619 require data center developments to assess water supply and develop a water scarcity plan. The statutes also mandate statewide water reporting as a precondition to obtaining and renewing business licenses.

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SEC Proposes Expansion of Investment Adviser Performance-Based Compensation Rule

On September 30, 2026, the Securities and Exchange Commission (the “SEC”) proposed amendments to Rule 205-3 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), which provides an exemption from the general prohibition under Section 205(a)(1) of the Advisers Act on registered investment advisers receiving performance-based compensation (the “Proposal”) so long as performance-based compensation is limited to “qualified clients”.1 Most notably for private fund sponsors, the Proposal would expand the definition of “qualified client” to include any investors that satisfy the “accredited investor” definition under Regulation D. The Proposal may also have implications for private fund managers that rely on exemptions from investment adviser registration under state law because certain state-level investment adviser registration exemptions incorporate or otherwise reference the federal qualified client definition. Expansion of the Qualified Client Definition Under the current Rule 205-3, an investor generally may qualify as a qualified client if, among other alternatives, the investor has at least $1.4 million under management with the adviser or has a net worth exceeding $2.7 million. These thresholds are higher than the financial thresholds applicable to many accredited investors under Regulation D. As a result, an investor may currently qualify as an accredited investor for purposes of investing in a private offering without qualifying as a qualified client for purposes of paying performance-based compensation. The Proposal would expand the qualified client definition to include any natural person or legal entity investor that satisfies the accredited investor definition under Regulation D. The Proposal would also remove the assets under management and net worth thresholds under the current Rule 205-3 qualified client test. For private funds relying on Section 3(c)(1) of the Investment Company Act of 1940, this change could reduce the need to apply a separate qualified client standard to investors that already qualify as accredited investors. Dorsey Observations and Next Steps If adopted as proposed, the expanded qualified client definition could be particularly significant for private fund managers. Most private fund offerings are already limited to accredited investors under Regulation D. However, the Proposal could expand the pool of prospective investors available to emerging private fund managers while reducing the regulatory burden associated with complying with Rule 205-3. The Proposal could also benefit advisers operating below the SEC registration threshold that rely on a state private fund adviser exemption. A number of states have adopted exemptions modeled on the North American Securities Administrators Association (“NASAA”) private fund adviser exemption, which may condition relief for advisers to certain funds relying on Section 3(c)(1) on each beneficial owner satisfying the federal qualified client definition. However, state requirements vary, and any effect of the Proposal would depend on the text of the applicable state exemption and how it incorporates Rule 205-3. Many emerging private fund managers may have a larger network of accredited investor relationships than qualified client relationships during the early stages of their investment advisory business. Currently, under Rule 205-3, private fund managers may receive performance-based compensation from investors who do not satisfy the qualified client definition if those investors were admitted to their private funds prior to registration with the SEC. Following registration with the SEC, however, managers may continue to permit investors that are not qualified clients to invest in future private funds but may not receive performance-based compensation from those investors with respect to such investments. In addition, because the net worth and assets under management thresholds for qualified client status are adjusted for inflation every five years, the pool of qualified client investors may diminish over time as previously eligible investors no longer satisfy the applicable thresholds. The Proposal could provide the dual benefit of greater flexibility for private fund managers to establish and maintain relationships with accredited investors as their businesses scale and they become registered with the SEC, and greater flexibility for certain accredited investors to participate in investment strategies that historically have been restricted to much larger institutional investors. Unless and until the Proposal is adopted, investment advisers should continue to comply with the existing qualified client requirements. If the Proposal is adopted, private fund sponsors should consider whether corresponding changes are appropriate for their subscription documents, investor questionnaires, and other offering materials. Advisers that are state-registered or rely on a state-level exemption should also consult the laws and regulations of each relevant jurisdiction before changing investor eligibility standards or performance-based compensation practices, because adoption of the federal amendments may not automatically modify state requirements. Comments on the Proposal will be due 60 days after publication in the Federal Register. 1 Investment Adviser Performance-Based Compensation Modernization, Investment Advisers Act Release No. IA-7022 (Sept. 30, 2026), available at https://www.sec.gov/rules-regulations/2026/09/s7-2026-28#33-11443proposed.

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The Supreme Court Update - October 8, 2026

On September 29, 2026, the Supreme Court granted certiorari in one case: Department of Homeland Security v. D.V.D., No. 26-426: This case concerns the Trump Administration’s “third-country removal” procedures, where immigrants are deported to countries not listed in the removal orders. In granting certiorari, the Court granted the Government’s application to stay a lower court decision halting the practice, which will allow third-country removals to continue pending resolution of the case. The issues presented are: (1) Whether the district court had jurisdiction over respondents’ claims; (2) whether the district court had authority to enter class-wide declaratory relief and APA vacatur under 8 U.S.C. § 1252(f)(1); (3) whether the Government’s guidance on third-country removals is unlawful under 8 U.S.C. § 1231(b), the due process clause, or FARRA/CAT and its implementing regulations; and (4) such other questions that the Government determines are appropriate for the proper disposition of the case. On October 1, 2026, the Court granted certiorari in three additional cases: Rhoney v. Barbosa da Cunha, No. 26-104: Immigration officials detained Ricardo Aparecido Barbosa da Cunha—a Brazilian citizen who had lived in the United States for approximately twenty years after entering without inspection—and denied him a bond hearing under 8 U.S.C. § 1225(b)(2)(A). The Second Circuit held that his detention was instead governed by § 1226(a), which permits release on bond, because § 1225(b)(2)(A)’s mandatory-detention requirement applies only to noncitizens apprehended while entering the country or shortly thereafter. The question presented is: Whether 8 U.S.C. § 1225(b)(2)(A) mandates the detention pending removal proceedings of aliens who, like Barbosa da Cunha, are present in the United States without having been admitted. Missionaries of St. John the Baptist, Inc. v. Frederic, No. 25-113: A Catholic religious organization sought to build a shrine to the Virgin Mary on land the organization owned adjacent to its church in Park Hills, Kentucky. Local zoning restrictions prohibited the proposed construction. The question presented is: Whether a land-use regulation that prohibits a religious institution from building a religious structure on its own property constitutes a “substantial burden” on religious exercise under the Substantial Burden Provision of the Religious Land Use and Institutionalized Persons Act, 42 U.S.C. § 2000cc(a). Marschner v. Marschner, No. 25-1349: Under the Uniformed Services Former Spouses’ Protection Act (“USFSPA”), a veteran’s longevity-based retirement pay can be divided in a divorce, but retirement pay based on disability and retirement pay that was waived to receive disability pay are indivisible. The question presented is: Does the USFSPA require state courts to refuse enforcement of indemnification provisions in a divorce settlement agreement?

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EPA Limits Title V Re-Litigation of NSR Permits

Overview On September 25, 2026, the U.S. Environmental Protection Agency (“EPA”) published a final rule that significantly limits the ability of third parties to use the Clean Air Act (“CAA”) Title V permitting process to revisit New Source Review (“NSR”) permitting decisions years after those decisions were made. The rule establishes that NSR permitting determinations generally must be challenged during the original permitting proceeding, thereby providing regulated sources with greater permitting certainty and finality for major capital projects. Published in the Federal Register titled Clarifying the Scope of “Applicable Requirements” Under State Operating Permit Programs and the Federal Operating Permit Program (Docket ID No. EPA-HQ-OAR-2023-0401), the rule amends 40 C.F.R. Parts 70 and 71 to codify EPA’s interpretation regarding when requirements established under other CAA programs may be reviewed, modified, or implemented through the Title V operating permit program. The rule becomes effective 30 days after publication. The rule addresses two principal issues: (1) the relationship between NSR preconstruction permitting and Title V operating permits, and (2) the treatment of the General Duty Clause under CAA section 112(r)(1). Most significantly, the rule provides greater certainty for sources navigating the NSR permitting process. EPA’s amendments are intended to ensure that NSR permitting decisions made through an approved public process are generally not revisited later through Title V permit proceedings. The rule responds to a circuit split between the U.S. Courts of Appeals for the Fifth and Tenth Circuits. In Environmental Integrity Project v. EPA, 969 F.3d 529 (5th Cir. 2020), the Fifth Circuit upheld EPA’s interpretation, concluding that it was consistent with the text, structure, and purpose of Title V. In contrast, the Tenth Circuit reached the opposite conclusion in Sierra Club v. EPA, 964 F.3d 882 (10th Cir. 2020), finding that the then-existing regulatory definition of “applicable requirement” did not support EPA’s position. By amending the regulatory language on which the Tenth Circuit relied and codifying the interpretation approved by the Fifth Circuit, EPA has established a nationwide framework governing the interaction between NSR and Title V. NSR and Title V: EPA Establishes a Uniform Nationwide Framework At the core of the rule is EPA’s effort to define the respective roles of NSR and Title V. The rule codifies the approach EPA has applied since 2017: once a source obtains an NSR permit under an EPA-approved permitting program, and that permit was issued following public notice with an opportunity for comment and judicial review, the permit establishes the NSR-related “applicable requirements” of the State Implementation Plan (“SIP”) or Federal Implementation Plan (“FIP”) for Title V purposes. Under this framework, Title V is not a vehicle for re-examining underlying NSR permitting decisions. EPA does not intend to use the Title V process to revisit applicability determinations, emissions calculations, control technology determinations, permit conditions, or other issues resolved through the NSR permitting process. This principle applies regardless of the stage of the Title V proceeding; whether the NSR permit was issued pursuant to a SIP or FIP; the type of NSR issue involved; or whether the NSR permit is incorporated into Title V sequentially or concurrently. Limited Exceptions EPA recognizes several circumstances in which NSR issues may still be reviewed through the Title V program: No NSR permit was issued at all; The permit was issued without public notice and an opportunity for comment and judicial review; or The issue involves substantive overlap between Title V and NSR requirements, such as the adequacy of monitoring provisions. As a result, the rule does not insulate unpermitted projects or foreclose review of matters that independently arise under Title V. Key Regulatory Amendments The rule revises the definition of “applicable requirement” in 40 C.F.R. §§ 70.2 and 71.2. Paragraph (1): Where an NSR permit is issued with public notice and an opportunity for comment and judicial review, the permit establishes and defines the applicable SIP or FIP requirements for Title V purposes. Paragraph (2): All NSR permit terms, including terms contained in minor NSR permits, constitute applicable requirements that must be incorporated into Title V permits. Paragraph (4): CAA section 112(r)(1) (the General Duty Clause) is expressly excluded from the definition of “applicable requirement,” while section 112(r)(7) Risk Management Program requirements remain included. EPA also amended 40 C.F.R. §§ 70.8 and 70.12 to clarify that alleged defects in requirements established outside the Title V process generally do not provide a basis for EPA objection to a Title V permit or for a Title V citizen petition. General Duty Clause Exclusion The rule also codifies EPA’s longstanding position that the General Duty Clause in CAA section 112(r)(1) is not an “applicable requirement” for Title V purposes. EPA points to several considerations supporting that conclusion, including the distinction between the General Duty Clause and Title V permit terms, the provision’s origins in the Occupational Safety and Health Act’s general duty clause, and the different enforcement structures applicable to the General Duty Clause and Title V permit requirements. Importantly, excluding section 112(r)(1) from the definition of “applicable requirement” does not eliminate EPA’s authority to enforce the General Duty Clause independently of the Title V program. The final rule instead clarifies that the General Duty Clause need not—and should not—be incorporated into Title V permits as an applicable requirement. Practical Implications for Regulated Sources Greater Finality for NSR Permits  For projects requiring PSD, nonattainment NSR, or minor NSR permits, the permitting process becomes the primary forum for resolving disputes regarding applicability determinations, emissions calculations, control technology requirements, offsets, and permit conditions. Once an NSR permit is issued through a qualifying public process, regulated sources should face substantially reduced risk that those same issues will be challenged years later through Title V permit proceedings. Reduced Risk of Collateral Permit Challenges Stakeholders have sometimes sought to use Title V permit issuance, renewal, revision, or citizen-petition proceedings to challenge underlying NSR determinations. The final rule makes clear that Title V is not the appropriate vehicle for challenging whether an applicable requirement was correctly established in the first instance. This should reduce the risk of permit delays and uncertainty associated with collateral challenges to previously issued NSR permits. The rule does not, however, eliminate all Title V challenges relating to an NSR permit. Challenges concerning the Title V permit itself—including whether it appropriately incorporates applicable requirements or contains adequate compliance provisions—remain possible. Increased Importance of the Initial NSR Proceeding Because Title V generally will not provide a second opportunity to challenge the substantive validity of an NSR determination, the administrative record developed during the NSR process becomes increasingly important. Permit applicants should ensure that applicability analyses, emissions calculations, control technology evaluations, modeling demonstrations, and supporting technical documentation are thoroughly developed during the original permitting proceeding. For significant projects, applicants may therefore have an additional incentive to identify and resolve potential permitting issues before the NSR permit is issued rather than assuming that unresolved issues can be addressed during a subsequent Title V proceeding. Potential Incentive for Broader Public Participation EPA also notes that permitting authorities may choose to provide public notice and an opportunity for comment for a broader range of NSR permits because permits issued through a qualifying public process receive the benefit of the finality framework established by the rule. Some permitting authorities may conclude that greater public participation at the NSR stage is preferable to uncertainty during subsequent Title V proceedings. Conclusion The final rule is principally a permitting-certainty measure. For sources that obtain NSR permits through a public process, EPA has substantially limited the ability of third parties to revisit underlying NSR determinations through the Title V program. As a result, regulated entities should benefit from greater finality regarding key permitting decisions, reduced risk of collateral permit challenges, and increased certainty when planning and implementing capital projects.