The “Volcker Rule,” enacted into law on July 21, 2010 as Section 619 of the Dodd- Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), subject to certain exceptions, prohibits a “Banking Entity” from engaging in proprietary trading activities or acquiring or retaining any equity, partnership, or other ownership interest in, or sponsoring an issuer that would be, an investment company under the Investment Company Act of 1940 (the “Company Act”), but for Section 3(c)(1) or 3(c)(7) thereof,2 or such similar funds as determined by the appropriate regulatory agency.

By its terms, the Volcker Rule will become effective on July 21, 2012 (the “Effective Date”). However, it is now acknowledged that the regulators will not be able to provide advance guidance, as required by the law, regarding the myriad interpretative issues raised. This note provides an overview of the regulatory scheme and offers some practical considerations for Banking Entities struggling to adapt.