On Dec. 10, 2013, the Commodity Futures Trading Commission (“CFTC”), Federal Deposit Insurance Corporation (“FDIC”), Federal Reserve Board (the “Board”), Office of the Comptroller of the Currency and Securities and Exchange Commission (“SEC”) (collectively, the “Agencies”) issued a final rule (the “Final Rule”) implementing Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), which is commonly referred to as the “Volcker Rule.” The Volcker Rule restricts the proprietary trading and private investment fund activities (“covered activities”) of U.S. banks and their affiliates, as well as non-U.S. banks with a branch or agency office in the United States and their affiliates (collectively, “banking entities”).
The text of the Final Rule is more than 70 pages long, while the supplemental guidance issued with it numbers nearly 900 pages and contains more than 2,800 footnotes. While the Final Rule is largely similar to the Notice of Proposed Rulemaking issued by the Agencies in 2011 (the “Proposed Rule”), it does contain numerous important modifications from the Proposed Rule. As discussed herein, banking entities generally have until July 21, 2015 to comply with the Final Rule’s restrictions. However, banking entities with $50 billion or more in trading assets and liabilities, as discussed below, must comply with certain reporting obligations by June 30, 2014.
Click here for an overview of the compliance program requirements imposed by the Final Rule.