The FRB, FDIC and OCC (the “Federal Banking Agencies”) each released and requested public comment on a proposed regulation that would implement the “Volcker Rule” requirements of Section 619 of the Dodd-Frank Act. In general, the Volcker Rule prohibits insured depository institutions, bank holding companies and their subsidiaries or affiliates (1) from engaging in certain “proprietary trading” for their own account, and (2) from owning, sponsoring or having specified relationships with a hedge fund or private equity fund. The Federal Banking Agencies developed the proposed regulation jointly with the SEC and consulted with the CFTC. The SEC and CFTC are expected to issue comparable releases regarding the proposed regulation shortly. Comments to the Federal Banking Agencies on the proposed regulation are due by January 13, 2012. The Alert will provide detailed coverage of the proposed regulation in a future issue.
Alert October 11, 2011