Volcker Rule: A “Best First Effort” Paving the Way for More

17 July 2018
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Key takeaways:
  • On Tuesday, June 5, 2018, the Federal Reserve Board, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission jointly released proposed revisions (the “Proposal”) to the regulations implementing section 13 of the Bank Holding Company Act (commonly known as the “Volcker Rule”). The Proposal (available here) was published in the Federal Register today, with a comment period that closes on September 17, 2018.
  • The Proposal is an important step forward but appears to be a “best first effort.” That is, although the Proposal puts forward a number of specific revisions to the Volcker Rule, on many important topics, the Proposal defers on specific changes and, instead, requests comment.
  • In addition, in some of the areas where the agencies propose specific changes, such as the scope of the proprietary trading provisions and the exemption for market making-related activities, the Proposal is either somewhat modest or introduces new complexities that need to be addressed. As a result, we believe the public comment process will be critical to provide the agencies with the information and detail needed to improve their implementation of the Volcker Rule.