Dec 10, 2013
Author: Ellen Marshall
As widely anticipated in the press, federal regulators have issued final rules implementing Section 619 of the Dodd-Frank Act, commonly called the Volcker Rule. This is the portion of the Dodd-Frank Act that limits proprietary investment and trading activity on the part of banking entities that benefit from federal deposit insurance. All five of the pertinent agencies–the Federal Reserve, OCC, FDIC, SEC and CFTC–adopted substantively identical rules. Further review of the rules and the promulgating preambles will no doubt reveal interesting nuances. Below are the key aspects that are evident on initial examination. We will cover specific topics of interest in future newsletters.
Key elements of interest in the final rules:
As in the proposed regulation, these limitations apply to banking entities, broadly defined. This includes bank holding companies and other entities that are affiliates or subsidiaries of a bank or other insured depository institution, or of an entity that controls an insured depository institution.
Although the effective date of the regulation is April 1, 2014, there are several delayed compliance periods. The Federal Reserve has extended the conformance period until July 21, 2015. Also, banking entities of different sizes will have until as late as December 31, 2016, to commence reporting regarding compliance. Larger banks must comply sooner, with the earliest required reporting date–for banking entities of $50 billion or more in consolidated trading assets and liabilities–coming on June 30, 2014.
Craig D. MillerPartner
Barbara S. PolskyPartner
Harold P. ReichwaldPartner
Charles E. Washburn, Jr.Partner
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