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Volcker Rule Adjustments Ahead

The Federal Reserve has announced that it will be making changes to the Volcker Rule, and the Fed along with the Commodity Futures Trading Commission. The Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission is seeking public comment on the changes proposed to the regulations implementing section 13 of the Bank Holding Company Act (BHC Act).

Changes proposed include simplifying and clarifying the operation and compliance requirements of the rule, permitting banking entities to engage in additional fund-related activities, as well as improving and clarifying the treatment of foreign funds.

“I am encouraged that the agencies have proposed a rule to improve, streamline, and clarify the ‘covered funds’ portion of the Volcker Rule,” said Sen. Mike Crapo, Chairman of the U.S. Senate Committee on Banking, Housing and Urban Affairs. “These changes are necessary to improve market liquidity and preserve access to diverse sources of capital for businesses.”

“As I have said before, the intent behind the Volcker rule is the right one—banks should not use deposits that are insured by taxpayers to make risky proprietary trades or investments in hedge funds and private equity funds,” said Federal Reserve Chair Jerome H. Powell. “We now have considerable supervisory experience putting that common sense prohibition into practice, and we have learned that a simpler, clearer approach to implementing the rule makes it easier for both banks and regulators to carry out the intent of the rule. We have already taken several steps in that direction and the proposal before us continues that work.”

The agencies will be accepting comments through April 1. Comments can be submitted through the Federal eRulemaking Portal or e-mail, using the title “ProposedRevisions to Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships with, Hedge Funds and Private Equity Funds”

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.

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