The US federal banking and functional regulators are finalizing revisions to the proprietary trading and compliance program provisions of the Volcker Rule, which implement some, though not all, of the changes that had been proposed by the agencies in a May 2018 notice of proposed rulemaking. The revisions being finalized (i) substantially revise the definition of “proprietary trading” and reject the inclusion of a proposed accounting prong; (ii) add and expand exclusions to that definition, including a new exclusion for matched derivatives trading; (iii) modify several of the exemptions, including making a major liberalization to the exemption for trading that occurs solely outside of the United States; and (iv) substantially reduce compliance program obligations for all but the largest US trading banks, including through the addition of a presumption of compliance for the vast majority of banking entities subject to Volcker Rule. While the amendments include a few minor adjustments to the covered fund rules, more substantial revisions to the covered fund provisions of the Volcker Rule are expected to be proposed for public comment at a later date.

Please join Mayer Brown lawyers David Sahr, Donald Waack and Matthew Bisanz for a 30-minute discussion of the revisions to the Volcker Rule.

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.

Listen to The Volcker Rule: Revisions for Proprietary Trading and Compliance Programs.