Staffs of the Agencies believe that, with respect to determining whether an entity is a covered fund, it would be appropriate that an issuer that will become an excluded foreign public fund be treated during its seeding period the same as an issuer that will become an excluded RIC. http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20131210b1.pdf. Answer:Appendix B of the final rule provides that, based on a review by the CEO of the banking entity, the CEO of the banking entity must, annually, attest in writing to the relevant Agency that the banking entity has in place processes to establish, maintain, enforce, review, test and modify the compliance program established under Appendix B and 44.20 of the final rule in a manner reasonably designed to achieve compliance with section 13 of the BHC Act and the final rule.1. . The staffs of the Agencies believe that banking entities subject to Appendix B as of the end of the conformance period should submit the first CEO attestation required under Appendix B after the end of the conformance period but no later than March 31, 2016. Staffs of the Agencies understand that, unlike in the case of U.S. registered investment companies,5 sponsors of foreign public funds in some foreign jurisdictions select the majority of the fund's directors or trustees, or otherwise control the fund for purposes of the BHC Act by contract or through a controlled corporate director. at 5678 (stating "the Agencies' view that the foreign public fund exclusion is designed to treat foreign public funds consistently with similar U.S. funds and to limit the extraterritorial application of section 13 of the BHC Act, including by permitting U.S. banking entities and their foreign affiliates to carry on traditional asset management businesses outside of the United States"). 3 79 Fed. Exemption 4 of the FOIA protects matters that are trade secrets and commercial or financial information obtained from a person that is privileged or confidential.1 Other exemptions may also apply. May a banking entity's compliance program for market making-related activities include objective factors on which a trading desk may reasonably rely to determine whether a security is issued by a covered fund? 33,949 (June 8, 2012). The Federal Reserve, the central bank of the United States, provides profiles, working papers, and state banking performance FED Publishes Draft Form and Guidance for Reporting Under Volcker Rule An official website of the United States government, OCC Bulletin2020-105 data. 3 Under the interim final rule, a "Qualifying TruPS Collateral is defined by reference to the standards in section 171(b)(4)(C) of the Dodd-Frank Act to mean any trust preferred security or subordinated debt instrument issued prior to May 19, 2010 by a depository institution holding company that, for any reporting period within the 12 months immediately preceding the issuance of such instrument, had total consolidated assets of less than $15,000,000,000 or issued prior to May 19, 2010 by a mutual holding company. conferences and events. Banking entities have argued that additional time is needed to allow them to implement systems and processes in order to ensure overall data integrity and reliability. The 2013 Rule contains various exclusions and exemptions from the scope of prohibited proprietary trading. In the final rule, however, the agencies determined to adopt only those covered fund-related provisions for which specific rule text was proposed (and, in each case, substantially as proposed). However, if the reporting deadline occurs on a Saturday, Sunday, or federal 5536, 5674 n.1717, 5687 n.1861 (January 31, 2014). The proposal requested comment on whether the agencies should exclude from the definition of proprietary trading loan-related swaps between a banking entity and customers that have received loans from the banking entity, which have presented a compliance challenge particularly for smaller non-dealer banking entities that enter into loan-related swaps infrequently. Federal Reserve Board - Frequently Asked Questions Moreover, under the final rule, the CEO has a duty to update the certification if the information in the certification materially changes at any time during the year when he or she becomes aware of the material change. The 2013 Rule exempts from the prohibition on proprietary trading certain risk-mitigating hedging activities that are designed to reduce the specific risks to a banking entity in connection with or related to individual or aggregated positions, contracts, or other holdings. Understanding the 2019 Revisions to the Volcker Rule at 5677. 2 See 79 Fed. See, e.g., 12 CFR 223.3(o)(5). The OCC and other federal agencies published a final rule amending the regulations that implement section 13 of the Bank Holding Company (BHC) Act, commonly known as the Volcker rule. See Board of Governors of the Federal Reserve System, "Order Approving Extension of Conformance Period under Section 13 of the Bank Holding Company Act" (December 18, 2014) (Board's Conformance Period Order), available at http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20141218a1.pdf. The final rule revises this compliance regime by categorizing banking entities based only the banking entitys trading assets and liabilities (without reference to the banking entitys total asset size). Volcker Rule: Compliance Program, Reporting, and Recordkeeping Requirements An official website of the United States government. Moreover, banking entities should not expand activities and make investments during the conformance period with the expectation that additional time to conform those activities or investments will be granted. Services, Sponsorship for Priority Telecommunication Services, Supervision & Oversight of Financial Market The 2013 Rule provides that the prohibition on ownership or sponsorship of a covered fund does not apply to a banking entitys underwriting and market making-related activities involving a covered fund so long as certain requirements are met, including that the banking entity count its ownership interest in such covered fund toward its aggregate fund investment limit and its Tier 1 capital deduction (as well as its per-fund limit if the banking entity acts as sponsor or acquires an interest in the fund pursuant to the asset management or asset-backed security issuer exemptions). Nor would the staffs advise that a foreign public fund be deemed a banking entity under the final rule solely by virtue of its relationship with the sponsoring banking entity where the foreign public fund meets the requirements of section 44.10(c)(1) of the final rule and the sponsoring banking entity's relationship with the foreign public fund meets the requirements of section 44.12(b)(1) of the final rule, including the requirement that the sponsoring banking entity's relationship with the fund is in compliance with applicable limitations in the foreign jurisdiction in which the foreign public fund operates. 5 See, e.g., id. The Volcker Rule prohibits banks from using customer deposits for their own profit. While these frequently asked questions (FAQs) apply to banking entities for which the OCC has jurisdiction under section 13 of the BHC Act, they have been developed by staffs of the agencies and substantively identical versions will appear on the public websites of each agency. http://www.treasurydirect.gov/instit/marketables/strips/strips.htm, https://www.occ.gov/topics/capital-markets/financial-markets/trading/volcker-rule-implementation/volcker-rule-implementation-faqs.html#metrics, https://www.occ.gov/topics/capital-markets/financial-markets/trading/volcker-rule-implementation/volcker-rule-implementation-faqs.html#foreign, https://www.occ.gov/topics/capital-markets/financial-markets/trading/volcker-rule-implementation/volcker-rule-implementation-faqs.html#ceoattestation, http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20141218a1.pdf. Answer: The final rule implementing section 13 of the BHC Act required certain of the largest banking entities to report metrics for July 2014 data beginning in September 2014. Under the proposal, the agencies would have reserved authority to determine, on a case-by-case basis, that any purchase or sale of one or more financial instruments by a banking entity either is or is not for the trading account of the banking entity (including by considering the impact of the activity on the safety and soundness of the banking entity or the financial stability of the United States, the risk characteristics of the particular activity, or any other relevant factor). Similarly, the exclusion would not apply to entities or arrangements that raise money from investors primarily for the purpose of investing in securities for the benefit of one or more investors and sharing the income, gain or losses on securities acquired by that entity. The Volcker Rule requirements for monitoring compliance lend themselves to the "three lines of defense" model. When is a banking entity required to submit the annual CEO certification for prime brokerage transactions required by section 44.14(a)(2)(ii)(B) of the final rule? Appendix A of the final rule provides that certain of the metrics required to be reported by banking entities under the final rule should include the limits set out in 44.4 and 44.5 of the final rule. The market-making exemption only permits risk management activity conducted or directed by a trading desk in connection with the desk's permitted market-making-related activities conducted in conformance with all of the requirements of the market-making exemption set forth in the final rule.5. at 5681 (stating that the limit on the number of co-venturers "allows flexibility in structuring larger business ventures without involving such a large number of partners as to suggest the venture is in reality a hedge fund or private equity fund established for investment purposes" and that "[t]he Agencies will monitor joint venturesand other excluded entitiesto ensure that they are not used by banking entities to evade the provisions of section 13"; also stating that "[t]he final rule's requirement that a joint venture not be an entity or arrangement that raises money from investors primarily for the purpose of investing in securities for resale or other disposition or otherwise trading in securities prevents a banking entity from relying on this exclusion to evade section 13 of the BHC Act by owning or sponsoring what is or will become a covered fund"). No. These community banks therefore meet conditions under the Economic Growth, Regulatory Relief, and Consumer Protection Act that exempt them from the Volcker rule. During the conformance period, a banking entity is expected to engage in good-faith efforts, appropriate for its activities and investments that will result in the conformance of all of its activities and investments to the requirements of section 13 and the final rule no later than the end of the conformance period. The FDIC publishes regular updates on news and activities. The final rule adopts many of the proposed changes to the 2013 rule, with targeted adjustments based on comments received. On November 30, 2020, the Office of the Comptroller of the Currency (OCC) published instructions and technical specifications for preparing and submitting quantitative measurements relating to section 13 of the Bank Holding Act, commonly known as the Volcker rule. 1 In particular, 44.20(d)(3) of the rule provides that, unless the appropriate Agency notifies the banking entity in writing that it must report on a different basis . If a trading desk spans multiple affiliated banking entities, to which Agency(ies) should a banking entity report metrics? Staffs of the Agencies believe that this restriction would apply to any increase in the amount of, extension of the maturity of, or adjustment to the interest rate4 or other material term of, an existing extension of credit.5 In addition, with respect to any existing covered transaction, a banking entity should evaluate whether the transaction guarantees, assumes, or otherwise insures the obligations or performance of the covered fund (or of any covered fund in which such covered fund invests) as prohibited by section 44.11(a)(5) of the final rule.6, The conformance period for legacy investments in and relationships with a covered fund (i.e., investments made and relationships entered into by a banking entity prior to December 31, 2013) currently ends on July 21, 2016.7 Staffs of the Agencies would expect a banking entity to engage in good-faith efforts during the conformance period to ensure that its investments in and relationships with legacy covered funds conform to section 44.14 of the final rule by the end of the applicable conformance period.8. at 5666. What is the purpose of the Volcker Rule? - Investopedia 4 See 79 Fed. In the final rule, the agencies have adopted an exclusion for a customer-driven swap or a customer-driven security-based swap and a matched swap or security-based swap if: (i) the transactions are entered into contemporaneously; (ii) the banking entity retains no more than minimal price risk; and (iii) the banking entity is not a registered dealer, swap dealer, or security-based swap dealer. The final rule, however, does not include this proposed reservation of authority. Section 13 of the BHC Act generally prohibits a banking entity from acquiring or retaining any ownership interest in, or acting as a sponsor to, a hedge fund or private equity fund ("covered fund"),1 subject to a number of exemptions. The Volcker Rule generally restricts banking entities from engaging in proprietary trading and from owning, sponsoring, or having certain relationships with a hedge fund or private equity fund. For a trading desk that spans multiple affiliated banking entities, the quantitative measurements of Appendix A should be calculated at the level of the entire desk; calculations do not need to be performed separately for each subset of positions booked at the various banking entities that compose the trading desk. Finalized Changes to Volcker Rule - The Harvard Law School Forum on Answer: The staffs of the Agencies believe that the marketing restriction applies to the activities of the foreign banking entity that is seeking to rely on the SOTUS covered fund exemption (including its affiliates). Best Sports Cards St Louis, Camdenton Middle School, Washington State Employment Security Department, Bioinformatics Departments, Can Drugs Be Detected In Autopsy, Articles V
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volcker rule reporting requirements

volcker rule reporting requirements

18736 (June 5, 1992). The Volcker Rule is a rule limiting certain financial institutions' ability to own, invest or sponsor hedge funds, private equity or other proprietary trading operations . U.S. banking organizations exceeding $10 billion in trading assets plus trading liabilities will need to report certainquantitative measures to their regulators. The changes involve the extension of time needed by certain entities to conform to the Volcker Rule. The final "Volcker Rule"1 issued December 10, 2013, requires banking entities to demonstrate that prohibited proprietary trading is not taking place at their firms. The final rule also eliminates the condition that no financing for the foreign banking entitys purchase or sale be provided by any branch or affiliate of the banking entity that is located in the United States or organized under the laws of the United States or of any state, and the condition that the purchase or sale not be conducted with or through any U.S. entity. (go back), Posted by Lee Meyerson and Keith Noreika, Simpson Thacher & Bartlett LLP, on, Harvard Law School Forum on Corporate Governance, benefitting from short-term price movements, (iii) realizing short-term arbitrage profits, or (iv) hedging another trading account position covered by the short-term intent prong., Six Pillar Program (Currently applicable to, Between $1 Billion and $20 Billion (Moderate), Simplified (Update existing policies and procedures). In addition, banking entities that are subject to the market risk capital prong will not be subject to the short-term intent prong (although such banking entities may elect to apply the market risk capital rule prong as an alternative to the short-term intent prong under certain conditions). the nation with a safe, flexible, and stable monetary and financial The staffs, consistent with the final rule's parallel treatment of RICs, FPFs, and SEC-regulated BDCs, also would not advise the Agencies to treat an SEC-regulated BDC as a banking entity solely on the basis of the level of ownership of the SEC-regulated BDC by a banking entity during a seeding period. Banks, New Security Issues, State and Local Governments, Senior Credit Officer Opinion Survey on Dealer Financing government site. 2 See 51 Fed. 10 See 12 CFR 44.10(c)(12) and 12 CFR 44.20(e). The effective date for the final rule is January 1, 2020, and the compliance date is January 1, 2021. The OCC's regulation regarding the treatment of confidential commercial information is at 12 CFR 4.16. See also 79 Fed. A banking entity would not be required to make this deduction until the end of the conformance period, which is currently July 21, 2015. Section 13 of the BHC Act generally prohibits any banking entity from engaging in proprietary trading or from acquiring or retaining an ownership interest in, sponsoring, or having certain relationships with a hedge fund or private equity fund (defined in the implementing regulations as covered funds). See 12 CFR 44.10(b)(1). The Volcker Rule also has an important compliance aspect that depends on the size of the bank. The FDIC is proud to be a pre-eminent source of U.S. This webpage includes information on the rulemakings to implement the Volcker rule, as well as related statements and other announcements on the Volcker rule. No, a banking entity is not required to deduct from its tier 1 capital an investment in a Qualifying TruPS CDO retained pursuant to section 44.16(a) of the interim final rule. Similar restrictions on a fund sharing the same name, or variation of the same name, with an insured depository institution or company that controls an insured depository institution or having the word "bank" in its name, have been used previously in order to prevent customer confusion regarding the relationship between such companies and a fund.1In order to comply with 44.11(a)(6) of the final rule and not be considered to share the same name or variation of the same name with a banking entity, the name of a covered fund must be sufficiently distinct from the name of the banking entity that the covered fund's use of the name would not likely lead to customer confusion regarding the relationship between the banking entity and the covered fund. 4 See "Volcker Rule Implementation Frequently Asked Questions: Annual CEO Attestation," https://www.occ.gov/topics/capital-markets/financial-markets/trading/volcker-rule-implementation/volcker-rule-implementation-faqs.html#ceoattestation ("The staffs of the Agencies believe that banking entities subject to Appendix B as of the end of the conformance period should submit the first CEO attestation required under Appendix B after the end of the conformance period but no later than March 31, 2016."). 4 A floating-rate loan does not become a new covered transaction whenever the interest rate changes as a result of an increase or decrease in the index rate. Staffs of the Agencies believe that, with respect to determining whether an entity is a covered fund, it would be appropriate that an issuer that will become an excluded foreign public fund be treated during its seeding period the same as an issuer that will become an excluded RIC. http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20131210b1.pdf. Answer:Appendix B of the final rule provides that, based on a review by the CEO of the banking entity, the CEO of the banking entity must, annually, attest in writing to the relevant Agency that the banking entity has in place processes to establish, maintain, enforce, review, test and modify the compliance program established under Appendix B and 44.20 of the final rule in a manner reasonably designed to achieve compliance with section 13 of the BHC Act and the final rule.1. . The staffs of the Agencies believe that banking entities subject to Appendix B as of the end of the conformance period should submit the first CEO attestation required under Appendix B after the end of the conformance period but no later than March 31, 2016. Staffs of the Agencies understand that, unlike in the case of U.S. registered investment companies,5 sponsors of foreign public funds in some foreign jurisdictions select the majority of the fund's directors or trustees, or otherwise control the fund for purposes of the BHC Act by contract or through a controlled corporate director. at 5678 (stating "the Agencies' view that the foreign public fund exclusion is designed to treat foreign public funds consistently with similar U.S. funds and to limit the extraterritorial application of section 13 of the BHC Act, including by permitting U.S. banking entities and their foreign affiliates to carry on traditional asset management businesses outside of the United States"). 3 79 Fed. Exemption 4 of the FOIA protects matters that are trade secrets and commercial or financial information obtained from a person that is privileged or confidential.1 Other exemptions may also apply. May a banking entity's compliance program for market making-related activities include objective factors on which a trading desk may reasonably rely to determine whether a security is issued by a covered fund? 33,949 (June 8, 2012). The Federal Reserve, the central bank of the United States, provides profiles, working papers, and state banking performance FED Publishes Draft Form and Guidance for Reporting Under Volcker Rule An official website of the United States government, OCC Bulletin2020-105 data. 3 Under the interim final rule, a "Qualifying TruPS Collateral is defined by reference to the standards in section 171(b)(4)(C) of the Dodd-Frank Act to mean any trust preferred security or subordinated debt instrument issued prior to May 19, 2010 by a depository institution holding company that, for any reporting period within the 12 months immediately preceding the issuance of such instrument, had total consolidated assets of less than $15,000,000,000 or issued prior to May 19, 2010 by a mutual holding company. conferences and events. Banking entities have argued that additional time is needed to allow them to implement systems and processes in order to ensure overall data integrity and reliability. The 2013 Rule contains various exclusions and exemptions from the scope of prohibited proprietary trading. In the final rule, however, the agencies determined to adopt only those covered fund-related provisions for which specific rule text was proposed (and, in each case, substantially as proposed). However, if the reporting deadline occurs on a Saturday, Sunday, or federal 5536, 5674 n.1717, 5687 n.1861 (January 31, 2014). The proposal requested comment on whether the agencies should exclude from the definition of proprietary trading loan-related swaps between a banking entity and customers that have received loans from the banking entity, which have presented a compliance challenge particularly for smaller non-dealer banking entities that enter into loan-related swaps infrequently. Federal Reserve Board - Frequently Asked Questions Moreover, under the final rule, the CEO has a duty to update the certification if the information in the certification materially changes at any time during the year when he or she becomes aware of the material change. The 2013 Rule exempts from the prohibition on proprietary trading certain risk-mitigating hedging activities that are designed to reduce the specific risks to a banking entity in connection with or related to individual or aggregated positions, contracts, or other holdings. Understanding the 2019 Revisions to the Volcker Rule at 5677. 2 See 79 Fed. See, e.g., 12 CFR 223.3(o)(5). The OCC and other federal agencies published a final rule amending the regulations that implement section 13 of the Bank Holding Company (BHC) Act, commonly known as the Volcker rule. See Board of Governors of the Federal Reserve System, "Order Approving Extension of Conformance Period under Section 13 of the Bank Holding Company Act" (December 18, 2014) (Board's Conformance Period Order), available at http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20141218a1.pdf. The final rule revises this compliance regime by categorizing banking entities based only the banking entitys trading assets and liabilities (without reference to the banking entitys total asset size). Volcker Rule: Compliance Program, Reporting, and Recordkeeping Requirements An official website of the United States government. Moreover, banking entities should not expand activities and make investments during the conformance period with the expectation that additional time to conform those activities or investments will be granted. Services, Sponsorship for Priority Telecommunication Services, Supervision & Oversight of Financial Market The 2013 Rule provides that the prohibition on ownership or sponsorship of a covered fund does not apply to a banking entitys underwriting and market making-related activities involving a covered fund so long as certain requirements are met, including that the banking entity count its ownership interest in such covered fund toward its aggregate fund investment limit and its Tier 1 capital deduction (as well as its per-fund limit if the banking entity acts as sponsor or acquires an interest in the fund pursuant to the asset management or asset-backed security issuer exemptions). Nor would the staffs advise that a foreign public fund be deemed a banking entity under the final rule solely by virtue of its relationship with the sponsoring banking entity where the foreign public fund meets the requirements of section 44.10(c)(1) of the final rule and the sponsoring banking entity's relationship with the foreign public fund meets the requirements of section 44.12(b)(1) of the final rule, including the requirement that the sponsoring banking entity's relationship with the fund is in compliance with applicable limitations in the foreign jurisdiction in which the foreign public fund operates. 5 See, e.g., id. The Volcker Rule prohibits banks from using customer deposits for their own profit. While these frequently asked questions (FAQs) apply to banking entities for which the OCC has jurisdiction under section 13 of the BHC Act, they have been developed by staffs of the agencies and substantively identical versions will appear on the public websites of each agency. http://www.treasurydirect.gov/instit/marketables/strips/strips.htm, https://www.occ.gov/topics/capital-markets/financial-markets/trading/volcker-rule-implementation/volcker-rule-implementation-faqs.html#metrics, https://www.occ.gov/topics/capital-markets/financial-markets/trading/volcker-rule-implementation/volcker-rule-implementation-faqs.html#foreign, https://www.occ.gov/topics/capital-markets/financial-markets/trading/volcker-rule-implementation/volcker-rule-implementation-faqs.html#ceoattestation, http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20141218a1.pdf. Answer: The final rule implementing section 13 of the BHC Act required certain of the largest banking entities to report metrics for July 2014 data beginning in September 2014. Under the proposal, the agencies would have reserved authority to determine, on a case-by-case basis, that any purchase or sale of one or more financial instruments by a banking entity either is or is not for the trading account of the banking entity (including by considering the impact of the activity on the safety and soundness of the banking entity or the financial stability of the United States, the risk characteristics of the particular activity, or any other relevant factor). Similarly, the exclusion would not apply to entities or arrangements that raise money from investors primarily for the purpose of investing in securities for the benefit of one or more investors and sharing the income, gain or losses on securities acquired by that entity. The Volcker Rule requirements for monitoring compliance lend themselves to the "three lines of defense" model. When is a banking entity required to submit the annual CEO certification for prime brokerage transactions required by section 44.14(a)(2)(ii)(B) of the final rule? Appendix A of the final rule provides that certain of the metrics required to be reported by banking entities under the final rule should include the limits set out in 44.4 and 44.5 of the final rule. The market-making exemption only permits risk management activity conducted or directed by a trading desk in connection with the desk's permitted market-making-related activities conducted in conformance with all of the requirements of the market-making exemption set forth in the final rule.5. at 5681 (stating that the limit on the number of co-venturers "allows flexibility in structuring larger business ventures without involving such a large number of partners as to suggest the venture is in reality a hedge fund or private equity fund established for investment purposes" and that "[t]he Agencies will monitor joint venturesand other excluded entitiesto ensure that they are not used by banking entities to evade the provisions of section 13"; also stating that "[t]he final rule's requirement that a joint venture not be an entity or arrangement that raises money from investors primarily for the purpose of investing in securities for resale or other disposition or otherwise trading in securities prevents a banking entity from relying on this exclusion to evade section 13 of the BHC Act by owning or sponsoring what is or will become a covered fund"). No. These community banks therefore meet conditions under the Economic Growth, Regulatory Relief, and Consumer Protection Act that exempt them from the Volcker rule. During the conformance period, a banking entity is expected to engage in good-faith efforts, appropriate for its activities and investments that will result in the conformance of all of its activities and investments to the requirements of section 13 and the final rule no later than the end of the conformance period. The FDIC publishes regular updates on news and activities. The final rule adopts many of the proposed changes to the 2013 rule, with targeted adjustments based on comments received. On November 30, 2020, the Office of the Comptroller of the Currency (OCC) published instructions and technical specifications for preparing and submitting quantitative measurements relating to section 13 of the Bank Holding Act, commonly known as the Volcker rule. 1 In particular, 44.20(d)(3) of the rule provides that, unless the appropriate Agency notifies the banking entity in writing that it must report on a different basis . If a trading desk spans multiple affiliated banking entities, to which Agency(ies) should a banking entity report metrics? Staffs of the Agencies believe that this restriction would apply to any increase in the amount of, extension of the maturity of, or adjustment to the interest rate4 or other material term of, an existing extension of credit.5 In addition, with respect to any existing covered transaction, a banking entity should evaluate whether the transaction guarantees, assumes, or otherwise insures the obligations or performance of the covered fund (or of any covered fund in which such covered fund invests) as prohibited by section 44.11(a)(5) of the final rule.6, The conformance period for legacy investments in and relationships with a covered fund (i.e., investments made and relationships entered into by a banking entity prior to December 31, 2013) currently ends on July 21, 2016.7 Staffs of the Agencies would expect a banking entity to engage in good-faith efforts during the conformance period to ensure that its investments in and relationships with legacy covered funds conform to section 44.14 of the final rule by the end of the applicable conformance period.8. at 5666. What is the purpose of the Volcker Rule? - Investopedia 4 See 79 Fed. In the final rule, the agencies have adopted an exclusion for a customer-driven swap or a customer-driven security-based swap and a matched swap or security-based swap if: (i) the transactions are entered into contemporaneously; (ii) the banking entity retains no more than minimal price risk; and (iii) the banking entity is not a registered dealer, swap dealer, or security-based swap dealer. The final rule, however, does not include this proposed reservation of authority. Section 13 of the BHC Act generally prohibits a banking entity from acquiring or retaining any ownership interest in, or acting as a sponsor to, a hedge fund or private equity fund ("covered fund"),1 subject to a number of exemptions. The Volcker Rule generally restricts banking entities from engaging in proprietary trading and from owning, sponsoring, or having certain relationships with a hedge fund or private equity fund. For a trading desk that spans multiple affiliated banking entities, the quantitative measurements of Appendix A should be calculated at the level of the entire desk; calculations do not need to be performed separately for each subset of positions booked at the various banking entities that compose the trading desk. Finalized Changes to Volcker Rule - The Harvard Law School Forum on Answer: The staffs of the Agencies believe that the marketing restriction applies to the activities of the foreign banking entity that is seeking to rely on the SOTUS covered fund exemption (including its affiliates).

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