In this publication: Highlights; Covered Banking Entities; Compliance Programs; Some Concluding Observations; and more.
Every banking organization will have compliance obligations under the Volcker Rule published in November (the “Proposed Rule”) by four of the federal financial regulatory agencies and, in January, by the Commodity Futures Trading Commission (collectively, the “Agencies”). The Volcker Rule broadly prohibits a banking entity from engaging in proprietary trading and from acquiring or retaining any kind of ownership interest in or sponsoring a hedge fund or private equity fund. The Rule permits certain kinds of trading or fund activity, however, and the Proposed Rule addresses the parameters of and possible conditions on these activities. Compliance with the requirements in the Proposed Rule and some suggestions for a more streamlined approach are the focus of this paper.
This paper focuses on the compliance duties that the Proposed Rule creates for all banking organizations, even those not engaged in Volcker Rule activities. While the Proposed Rule is, of course, only a proposal, the time for compliance is running short. Volcker takes effect on July 21, 2012, for all banking entities, whether or not there is a final regulation. The Agencies specifically would require that, by July 21, 2012, the largest organizations begin keeping daily records and making monthly reports of their trading activities and have full compliance programs in place. There is a nominal twoyear conformance period, but the Agencies plan to use that time to fine-tune many of the requirements—underscoring the obligation of banking organizations to have compliance programs up and running in short order. Given this timeframe, the Proposed Rule is the only blueprint for compliance.
The deadline for comments on the Proposed Rule is February 13, 2012. The Agencies have faced a daunting task in developing a regulation that implements the complex Volcker provisions in Dodd-Frank without imposing unnecessary burdens. The Proposed Rule nevertheless would impose some significant burdens not required by Dodd-Frank. As we explain below, various requirements could be streamlined without undermining the statutory purpose.
Please see full publication below for more information.
Firefox recommends the PDF Plugin for Mac OS X for viewing PDF documents in your browser.
We can also show you Legal Updates using the Google Viewer; however, you will need to be logged into Google Docs to view them.
Please choose one of the above to proceed!
LOADING PDF: If there are any problems, click here to download the file.
Administrative Law Updates, Finance & Banking 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.
© Morrison & Foerster LLP | Attorney Advertising