Financial Regulators Modify Volcker Rule

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Monday, June 29. 2020

Financial Regulators Modify Volcker Rule

On June 25th, five federal agencies including the SEC finalized changes related to the Volcker rule’s prohibition on banking entities investing in or sponsoring hedge funds or private equity funds. These funds are typically known as covered funds. Generally the Volcker rule prohibits banking entities from engaging in proprietary trading and from acquiring or retaining ownership interests in, sponsoring, or having certain relationships with covered funds.

The new rule modifies three areas of the Volcker rule as follows:

Streamlining the covered funds portion of rule
Addressing the extraterritorial treatment of certain foreign funds
Permitting banking entities to offer financial services and engage in other activities that do not raise concerns that the Volcker rule was intended to address

The final rule is broadly similar to the proposed rule from January and will go into effect October 1st. For more information, interested parties can contact the agencies as listed below:

Commodities Futures Trading Commission	Office of Public Affairs	(202) 418-5080
Federal Reserve	Eric Kollig	(202) 452-2955
Federal Deposit Insurance Corporation	Brian Sullivan	(202) 898-6992
Office of the Comptroller of Currency	Bryan Hubbard	(202) 649-6870
Securities and Exchange Commission	Office of Public Affairs	(202) 551-4120