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In response to stakeholder feedback, California Department of Financial Protection and Innovation (DFPI) has announced its intention to initiate a rulemaking process to develop statewide regulations under California's Fair Investment Practices by Venture Capital Companies Law (FIPVCC). Pending completion of that process and the adoption of final regulations, the DFPI has confirmed that it will suspend enforcement of the law and will not require covered entities to comply with the April 1, 2026 registration and reporting deadline.
The DFPI has indicated that formal rulemaking will begin later this year. Before initiating the formal process, the agency intends to conduct informal outreach to venture capital companies, industry associations, founders, investors and other stakeholders. The DFPI has stated that it will notify registrants and subscribers when formal rulemaking commences. Once formal rulemaking begins, it must be completed within one year.
While this announcement provides near-term relief for covered entities, the FIPVCC remains on the books, and covered entities should anticipate renewed compliance obligations once final regulations are adopted. In the meantime, affected parties may wish to engage with the DFPI's informal outreach efforts to help shape the final regulations.
Foley Hoag will continue to monitor communications from the DFPI for updates on timing and opportunities to submit comments.
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