On October 8th, five federal agencies, including the SEC, finalized revisions that simplify compliance requirements with the "Volcker Rule". This rule general prohibits banking entities from engaging in proprietary trading or investing in or sponsoring hedge funds or private equity funds. Under the revision, firms without significant trading activity will have simplified and streamlined compliance. Conversely, firms with significant trading activity will have to comply with more stringent rules. By statute, community banks generally are exempt from the Volcker Rule.
The revisions continue to prohibit proprietary trading while enhancing the clarity and certainty of the activities allowed by law. The universe of activity generally considered proprietary trading by the agencies should remain relatively the same as under the 2013 rule. The changes were jointly made by the Federal Reserve Board, the Commodity Futures Trading Commission (CFTC), the Federal Deposit Insurance Commission (FDIC), the Office of the Comptroller of the Currency (OCC), and the SEC. Their contacts are listed below:
| Federal Reserve |
Eric Kollig |
202-452-2955 |
| CFTC |
Office of Public Affairs |
202-418-5080 |
| FDIC |
Julianne Breitbeil |
202-898-6895 |
| OCC |
Bryan Hubbard |
202-649-6870 |
| SEC |
Office of Public Affairs |
202-551-4120 |
The changes go into effect on January 1, 2020, with a compliance date a year later on January 1, 2021.
Sources:
Agencies Finalize Changes to Simplify Volcker Rule (www.sec.gov)
