US financial regulators modify Volcker Rule

Chris Hamblin

16 July 2020

The final rule is broadly similar to a rule proposed in 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 dimension for certain foreign funds; and
permitting banking entities to offer financial services and engage in other activities that do not raise any concerns that the Volcker rule was intended to address.

The rule will be effective on 1 October.