We issued a client memorandum on December 9 listing the major topics to look for when the five financial regulatory agencies agreed to finalize the Volcker Rule, which generally prohibits banking organizations from engaging in proprietary trading and investing in or sponsoring private investment funds, subject to a host of exceptions and details. The agencies issued the final version of the Rule yesterday, but clearly its requirements will take years to unfold.

In the meantime, following are our preliminary responses to the questions that we posed:

- The definition of market-making. The scope of permissible market-making is generally broader than in the original proposal. The final Rule will rely to a greater extent than expected on a program designed by each banking organization to limit, monitor and measure its market-making activities in such a way as to show that it is not engaged in impermissible proprietary trading. Thus, while restrictions remain, and monitoring and reporting systems will be required (see below), banks will have somewhat more control over their design.