March 05, 2020

US Agencies Propose Revisions to Volcker Rule Covered Funds Provisions



The federal banking regulators, SEC, and CFTC have jointly proposed revisions to the Volcker Rule that address the prohibitions and restrictions regarding covered fund activities in the same way that the agencies’ August 2019 rulemaking primarily focused on the Volcker Rule’s restrictions on proprietary trading. The agencies intend for the proposed revisions to clarify, streamline, and ease the compliance burden of the covered funds provisions of the Volcker Rule by:

  • Codifying foreign excluded fund relief for non-US banking entities;
  • Incorporating some Section 23A exemptions into the “Super 23A” restrictions;
  • Easing the compliance burden for loan securitizations, foreign public funds, and small business investment companies;
  • Creating four new exclusions for banking entities to invest in or sponsor credit funds, venture capital funds, customer facilitation funds, and family wealth management vehicles;
  • Narrowing the scope of the definition of ownership interest; and
  • Clarifying the treatment of parallel direct investments by a banking entity in the same underlying investments as a sponsored covered fund.

Please join Mayer Brown lawyers Thomas Delaney, Jeffrey Taft, Carol Hitselberger, and Matthew Bisanz for a discussion of the proposed revisions to the Volcker Rule and the significant issues contained in those revisions that may form the basis of industry comment letters.

Mayer Brown’s Global Financial Markets Initiative helps clients deal with the legal and business challenges resulting from the ongoing turbulence in worldwide financial markets. By mobilizing the firm’s global resources from multiple practices and offices, the initiative provides clients with knowledgeable and timely counsel on a broad spectrum of their legal needs.

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