“In Final Rule, Federal Reserve Board Clarifies Conformance Period Under Volcker Rule”
On February 9, 2011, the Federal Reserve Board (the “Board”) adopted a final rule regarding the conformance period banking entities and nonbank financial institutions supervised by the Board will have to come into compliance with Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, known as the Volcker Rule. The Volcker Rule generally prohibits banking entities and certain nonbank financial institutions supervised by the Board from engaging in proprietary trading or investing in, sponsoring, or engaging in certain relationships with a hedge fund or private equity fund.
The final rule is substantially similar to the proposed rule. This Stroock Special Bulletin examines the ways in which the Board modified the proposed rule.