Federal Banking Agencies And SEC Issue Proposed Volcker Rule Regulations
Mondaq Business Briefing › United States Law Articles in English (2011)
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Federal Banking Agencies And SEC Issue Proposed Volcker Rule Regulations
The FRB, OCC, FDIC and SEC (the "Agencies", and each an "Agency") have requested comment on a proposed rule (the "Proposed Rule") to implement restrictions and limitations required by the Dodd-Frank Act on proprietary trading and certain relationships with hedge funds and private equity funds. The Agencies adopted a common text of the Proposed Rule, although each Agency plans to separately issue a rule incorporating the final version of the common text that will apply to entities for which the Agency is the primary financial regulatory agency. This summary provides a high level overview of the Proposed Rule.
Scope and Coverage of the Proposed Rule The Proposed Rule implements Section 619 of the Dodd-Frank Act, commonly known as the "Volcker Rule" and described in detail in the July 28, 2010 Special Edition of the Financial Services Alert. The Volcker Rule amends the Bank Holding Company Act (the "BHC Act") by prohibiting a "banking entity" from engaging in proprietary trading and investing in, or having certain relationships with, any fund that would be an investment company but for Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act of 1940 (the "Investment Company Act"), and other such similar funds designated by the Agencies, subject to certain exceptions. The Volcker Rule applies to any "banking entity", which it defines broadly to include (1) any insured depository institution, as defined in Section 3 of the Federal Deposit Insurance Act (other than certain limited purpose trust institutions); (2) any company that controls an insured depository institution; (3) any company treated as a bank holding company for purposes of Section 8 of the International Banking Act of 1978, as amended; and (4) any affili...See the full content of this document
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