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Volcker Rule Implementation
On December 10, 2013, the Office of the Comptroller of the Currency ("OCC"), the Board of Governors of the Federal Reserve System ("Board"), the Federal Deposit Insurance Corporation, the U.S. Securities and Exchange Commission, and the U.S. Commodity Futures Trading Commission issued final regulations to implement section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, known as the Volcker Rule. The final regulations were published in the Federal Register on January 31, 2014, and became effective on April 1, 2014.
National banks (other than certain limited-purpose trust banks), federal savings associations, and federal branches and agencies of foreign banks (collectively banks) are required to fully conform their activities and investments to the requirements of the final regulations by the end of the conformance period, which the Board has extended to July 21, 2015.
The final rule prohibits banks from engaging in short-term proprietary trading of certain securities, derivatives, commodity futures and options on these instruments, for their own account. The final rule also imposes limits on banks' investments in, and other relationships with, hedge funds or private equity funds. The final rule provides exemptions for certain activities, including market making, underwriting, hedging, trading in government obligations, insurance company activities, and organizing and offering hedge funds or private equity funds. The final rule also clarifies that certain activities are not prohibited, including acting as agent, broker, or custodian.
The OCC is posting below information that may be helpful for banks for purposes of Volcker Rule compliance: