Agencies Publish Rule Excluding Community Banks from Volcker Rule

Orrick - Finance 20/20
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On July 9, the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board, the Commodity Futures Trading Commission (CFTC), the Office of the Comptroller of the Currency (OCC) and the Securities and Exchange Commission (SEC) adopted a final rule that excludes community banks from the Volcker Rule, which restricts banking entities from engaging in proprietary trading and from owning, sponsoring or having certain relationships with hedge funds or private equity funds. Under the final rule that was adopted, community banks with $10 billion or less in total consolidated assets, and which have total trading assets and liabilities that are 5% or less than such community bank’s total consolidated assets, will be excluded from the Volcker Rule.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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