Joint Release

Board of Governors of the Federal Reserve System
Commodity Futures Trading Commission
Federal Deposit Insurance Corporation
Office of Comptroller of the Currency
Securities and Exchange Commission
 

Financial Regulators Modify Volcker Rule

Washington, D.C. — Five federal regulatory agencies today finalized a rule modifying regulations implementing the Volcker Rule’s prohibition on banking entities investing in or sponsoring hedge funds or private equity funds — known as covered funds. The final rule is broadly similar to the proposed rule from January. 

The Volcker Rule generally prohibits banking entities from engaging in proprietary trading and from acquiring or retaining ownership interests in, sponsoring, or having certain relationships with a hedge fund or private equity fund.

Like the proposal, the final rule modifies three areas of the rule by:

• Streamlining the covered funds portion of the rule;
• Addressing the extraterritorial treatment of certain foreign funds; and
• Permitting banking entities to offer financial services and engage in other permissible activities that do not raise concerns that the Volcker Rule was intended to address.

The final rule will be effective on October 1, 2020.

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Media Contacts:

Federal Reserve Board                                  Eric Kollig                    (202) 452-2955
CFTC                                                              Public Affairs               (202) 418-5080
FDIC                                                               Brian Sullivan              (202) 898-6534
OCC                                                               Bryan Hubbard            (202) 649-6870
SEC                                                                Public Affairs               (202) 551-4120