The Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission (the “SEC”) issued a final rule, and the Commodity Futures Trading Commission (the “CFTC” and, collectively with the other regulatory agencies listed above, the “Agencies”) issued a parallel final rule (together, the “Final Rule”) on December 10, 2013, to implement the restrictions contained in Section 619 of the Dodd-Frank Act, commonly known as the “Volcker rule.” The Volcker rule generally prohibits banking entities from engaging in proprietary trading and from sponsoring and/or investing in certain types of private funds (i.e., covered funds).
In this summary, we provide answers to certain frequently asked questions related to the proprietary trading aspects of the Volcker rule based upon the statutory language, the Final Rule, the regulatory history and the explanatory preamble that accompanied the issuance of the Final Rule (the “Preamble”). Goodwin Procter previously released a summary that addressed FAQs relating to the covered funds aspects of the Volcker rule.
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Topics: Banking Reform Bill, Compliance, Covered Banking Entity, Dodd-Frank, Final Rules, Financial Instruments, Foreign Investment, Hedging, Market Making, Proprietary Trading, Reporting Requirements, Risk Mitigation, Underwriting, Volcker Rule
Published In: General Business Updates, Finance & Banking Updates, International Trade Updates, Securities Updates
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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