On May 30, 2018, the Board of Governors of the Federal Reserve System (“Federal Reserve”) issued a proposal (the “Proposed Rule”) to amend the rules implementing Section 13 of the Bank Holding Company Act of 1956 (the “Volcker Rule”). Shortly thereafter, the other four federal agencies responsible for implementing the Volcker Rule (together with the Federal Reserve, the “Agencies”) followed suit.

The Volcker Rule generally prohibits banking entities from engaging in proprietary trading and from investing in, sponsoring, or having certain relationships with covered funds. In 2013, the Agencies adopted regulations to implement the Volcker Rule (the “Current Rule”). Banking entities have found the Current Rule’s restrictions unduly complex and compliance burdensome. In the preamble to the Proposed Rule, the Agencies acknowledge that certain components of the Current Rule have been difficult to implement in practice and so they have identified opportunities for improvement that are consistent with the statute.