Five federal financial regulatory agencies on Thursday invited public comment on a proposal to modify regulations implementing the Volcker rule's general prohibition on banking entities investing in or sponsoring hedge funds or private equity funds-known as 'covered funds.'
Since the regulations implementing the Volcker rule were finalized in 2013, the rule has created compliance uncertainty and imposed limits on certain banking services and activities that the Volcker rule was not intended to restrict. To address these concerns, the agencies simplified requirements for the proprietary trading restrictions in November 2019. Today's proposal would modify the restrictions for banking entities investing in, sponsoring, or having certain relationships with covered funds.
In particular, the joint agency proposal would improve and streamline the covered funds portion of the rule, address the treatment of certain foreign funds, and permit banking entities to offer financial services and engage in other permissible activities that do not raise concerns that the Volcker rule was intended to address.
The proposed changes were jointly developed by the Federal Reserve Board, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission.
Comments will be accepted until April 1, 2020.
Federal Register notice (PDF)
Opening Statement by Chair Jerome H. Powell
Statement by Vice Chair for Supervision Randal K. Quarles
Statement by Governor Lael Brainard
Open Board Meeting on January 30, 2020
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Board of Governors of the Federal Reserve System published this content on 30 January 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 January 2020 19:19:02 UTC
