Agencies issue final rules implementing Volcker Rule
13 December 2013 Washington DC
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Five federal agencies have issued final rules developed jointly to implement Section 619 of the US Dodd-Frank Act, also known as the Volcker Rule.
The final rules prohibit insured depository institutions and companies affiliated with banking entities from engaging in short-term proprietary trading of certain securities, derivatives, commodity futures and options on these instruments, for their own accounts.
The final rules also impose limits on banking entities’ investments in, and other relationships with, hedge funds and private equity funds, as well as clarifying that certain activities are not prohibited, including acting as agent, broker, or custodian.
The compliance requirements under the final rules vary based on the size of the banking entity and the scope of activities conducted.
Banking entities with significant trading operations will be required to establish a detailed compliance programme and their CEOs will be required to attest that the programme is reasonably designed to achieve compliance with the final rule.
Independent testing and analysis of an institution’s compliance program,e will also be required.
Banking organisations covered by Section 619 will be required to fully conform their activities and investments by 21 July 2015.
The final rules prohibit insured depository institutions and companies affiliated with banking entities from engaging in short-term proprietary trading of certain securities, derivatives, commodity futures and options on these instruments, for their own accounts.
The final rules also impose limits on banking entities’ investments in, and other relationships with, hedge funds and private equity funds, as well as clarifying that certain activities are not prohibited, including acting as agent, broker, or custodian.
The compliance requirements under the final rules vary based on the size of the banking entity and the scope of activities conducted.
Banking entities with significant trading operations will be required to establish a detailed compliance programme and their CEOs will be required to attest that the programme is reasonably designed to achieve compliance with the final rule.
Independent testing and analysis of an institution’s compliance program,e will also be required.
Banking organisations covered by Section 619 will be required to fully conform their activities and investments by 21 July 2015.
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