“U.S. Regulatory Agencies Propose Regulations to Implement Volcker Rule”
On October 11, 2011, in connection with Title VI of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Securities and Exchange Commission (the “Agencies”) proposed regulations to implement section 619 of the Dodd-Frank Act (the “Proposed Rule”), known popularly as the “Volcker Rule”. Section 619 of the Dodd-Frank Act adds a new section 13 to the Bank Holding Company Act of 1956, which prohibits any banking entity from engaging in proprietary trading or from acquiring or retaining an ownership interest in, sponsoring or having certain relationships with a hedge fund or private equity fund, subject to numerous exemptions.
This Stroock Special Bulletin summarizes key provisions of the Proposed Rule, which is complex and contains almost 400 requests by the Agencies for comments to a variety of topics covered by the Proposed Rule. The large number of questions left unanswered suggests that the views of the Agencies on many provisions remain unsettled, and that some of the proposed provisions could undergo significant modification before the rule is released in its final form. The comment period on the Proposed Rule ends on January 13, 2012.