As a follow-up to our February 16, 2026 client update regarding the FIPVCC Law, on March 17, 2026, the California Department of Financial Protection and Innovation (DFPI) announced the suspension of implementation and enforcement of the Fair Investment Practices by Venture Capital Companies Law (FIPVCC) pending the completion of a formal rulemaking process.
As background, the FIPVCC Law was enacted to address concerns about underinvestment in diverse founder teams by the venture capital industry by requiring venture capital companies with a California nexus to file annual reports regarding the diversity of their investments. The FIPVCC Law has a very wide nexus definition which could apply to many venture capital funds operating in Israel.
In response to stakeholder feedback, the DFPI has determined that it will develop statewide regulations before the law takes full effect. As a result, covered entities are not required to submit registrations or file reports by the previously scheduled April 1, 2026 deadline.
The DFPI plans to begin the rulemaking process later this year, with formal rulemaking required to be completed within one year of initiation. Before launching formal rulemaking, the DFPI intends to solicit input from venture capital companies, industry associations, founders, investors, and other stakeholders over the coming months.
For clients who had been preparing for the April 1 deadline, immediate compliance obligations are now on hold. However, we recommend continuing to monitor communications from the DFPI and staying informed as the rulemaking process unfolds. Please reach out to us if you have questions about how the suspension may affect your specific circumstances or if you would like assistance tracking developments in this area.
The content in this update is provided for informational purposes only and is not intended to be comprehensive. It does not serve to replace professional legal advice required on a case by case basis.
