The Federal Reserve today extended the Volcker Rule conformance period for legacy covered funds from July 21, 2015 to July 21, 2016, and also granted a further one year extension until July 21, 2017.

At 3 pm today (December 18, 2014), the Board of Governors of the Federal Reserve System (the Board) announced that it had exercised its statutory authority under section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Volcker Rule), to grant banking entities covered by the rule an extension until July 21, 2016 (from July 21, 2015) to conform or divest those investments in and relationships with covered funds and foreign funds that were in place prior to December 31, 2013 (legacy covered funds).

At the same time, the Board also announced its intention to further exercise its statutory authority next year (2015) and grant an additional, final, one-year extension, until July 21, 2017 to bring legacy covered funds into conformance with the Volcker Rule requirements. The rationale behind a two-step announcement is that the Board only has the authority to grant extensions one year at a time (for a maximum of three years). The Board previously granted an industry-wide one-year extension to the conformance period deadline — from July 21, 2014 to July 21, 2015.