On Friday, October 1, 2010, the Financial Stability Oversight Council (FSOC) held its inaugural meeting at the U.S. Treasury Department in Washington, D.C. The FSOC, established under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), is charged with identifying threats to the financial stability of the United States; promoting market discipline; and responding to emerging risks to the stability of the United States financial system. One of the FSOC’s first steps was to approve and issue a Notice and Request for Information regarding the FSOC’s “Volcker Rule” study and recommendations (NRI Volcker Rule).

Section 619 of the Dodd-Frank Act contains a prohibition against banking entities engaging in proprietary trading and against maintaining certain relationships with hedge funds and private equity funds. This section is commonly known as the Volcker Rule. In addition, Section 619 of the Dodd-Frank Act requires the FSOC to conduct a study and make recommendations on implementing the Volcker Rule; the other federal regulators, in particular the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System (Board), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC), must consider the findings of the FSOC study in developing and adopting regulations to implement the Volcker Rule. The FSOC’s study and recommendations must be completed by January 22, 2011, and submitted to Congress.