Key takeaways

• On Friday afternoon, the Federal Reserve and other implementing agencies issued an important new response to a Frequently Asked Question on the Volcker Rule that makes it substantially easier for a non-U.S. banking entity to invest directly in private funds organized and sponsored by fund sponsors that are not affiliated with the non-U.S. banking entity, even if those funds are offered to U.S. investors by the unaffiliated fund sponsors.
• This new FAQ addresses many of the Volcker Rule issues faced by unaffiliated fund sponsors and will lead to simplified fund structures with one fund for both U.S. investors and non-U.S. banking entities, remove the concerns regarding transfers to U.S. persons, and generally permit the fund to be organized in either U.S. or non-U.S. jurisdictions.