Banking Regulators Clarify Volcker Rule Compliance Timeline, Senators Push for Final Rule

Dodd-Frank Federal Reserve

Recently, the Federal Reserve Board approved a statement clarifying that an entity covered by the “Volcker Rule,” section 619 of the Dodd-Frank Act, has until July 21, 2014 to comply unless the Board extends the conformance period. The clarified compliance date reflects the full two-year period provided by the statute for covered institutions to fully conform activities and investments. Generally, the Volcker Rule imposes certain prohibitions and requirements on banking entities and nonbank financial companies supervised by the Board that engage in proprietary trading and have certain interests in, or relationships with, a hedge fund or private equity fund. The Federal Reserve Board and other federal banking regulators continue their efforts to adopt regulations implementing the statutory restrictions. In October 2011, the Federal Reserve Board sought comment on a proposed rulemaking, as did the Commodities Futures Trading Commission in January 2012, but no final rules have emerged. On April 26, 22 Senators sent a letter to the regulators urging that they adopt a strong clear rule this summer.