• Volcker Rule: Proposed Regulations - Proprietary Trading Provisions
  • October 14, 2011
  • Law Firm: Covington Burling LLP - Washington Office
  • On October 11, 2011, the Federal Reserve Board, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation issued proposed regulations implementing section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly referred to as the “Volcker Rule.” The Volcker Rule consists of two key restrictions. First, banking entities are prohibited from engaging in proprietary trading (“Proprietary Trading Provisions”). Second, banking entities are prohibited from sponsoring or investing in private equity or hedge funds, or extending credit to or engaging in other covered transactions with affiliated private equity or hedge funds (“Covered Fund Provisions”). The Proprietary Trading Provisions are covered in Subpart B of the proposed regulations, and the Covered Fund Provisions are covered in Subpart C of the proposed regulations. This client alert outlines the Proprietary Trading Provisions.