• “Interim Final” Volcker Rule Approved
  • January 31, 2014 | Author: Benjamin B. Coulter
  • Law Firm: Burr & Forman LLP - Birmingham Office
  • On December 10, 2013, the Board of Governors of the Federal Reserve System, Commodity Futures Trading Commission, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and Securities Exchange Commission announced the “final rules” implementing § 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Volcker Rule, which some call the centerpiece of the Dodd-Frank Act, prohibits banks from engaging in most proprietary trading (“engaging as principal for the trading account of the banking entity in any purchase or sale of one or more financial instruments”), while allowing for certain underwriting activities, market making activities, and trading in certain domestic government obligations and foreign government obligations, limits hedging by requiring that hedging be against “specific, identifiable risks to the banking entity,” and limits ownership of hedge funds and private equity firms. The rule was designed to limit excessive risk-taking and to end a “too big to fail” mentality.