Fed Confirms Two-Year Conformance Period for Volcker Rule
The US Federal Reserve Board (Fed) has confirmed that entities covered by the so-called Volcker Rule will have a two-year conformance period to prepare for compliance.
The announcement, made in conjunction with the Securities Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) ameliorates concerns that firms would be forced to comply by the original enactment date of 21 July 2012.
Earlier in 2012, the regulators were beseiged by thousands of comment letters ahead of the public submission deadline, leading many industry participants to believe that a finalized rule this year is ambitious. The regulators themselves, while saying that banks must make good faith moves towards preparing for compliance, have given themselves the option to extend the deadline until 2017 if necessary, and may phase in reporting requirements earlier.
"The clarification of the Volcker Rule conformance period which was issued today is entirely appropriate and necessary," says Kenneth E Bentsen Jr, EVP for public policy and advocacy at the Securities Industry and Financial Markets Association (SIFMA). "The industry has been concerned throughout this process over what was to be expected on July 21, 2012, and that concern was heightened as it appears likely that regulators may not be able to promulgate a final rule by that date. Today's guidance that firms subject to Volcker will be able to use the full two year conformance period to come into compliance with the rule as provided for by the statute is critically important because it alleviates concerns over potentially having to comply with a rule whose details had not yet been made clear."
Officially section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the regulation is informally known as the Volcker Rule after Paul Volcker, the former Fed chairman and author of the original outline. Among other areas, the rule restricts the level of proprietary trading that banks can engage in, as a safeguard against systemic risks such as the bank collapses seen during the recent financial crisis.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
American Bankers Assoc. asks SEC: Do you know what you’re doing?
The industry group disagrees severely with regulators’ interpretation of the Financial Data Transparency Act, hinting at possible legal action in a recently published comment letter.
DORA will change the buy vs. build debate… maybe
Waters Wrap: With DORA’s deadline looming, trading firms are having to reassess their long-term tech strategies. Anthony wonders if that means more building and less buying.
The SEC needs a hand with artificial intelligence
The SEC wants to take a tough stance on AI, but it has a talent problem… or a marketing problem. Or both…
Off-channel messaging (and regulators) still a massive headache for banks
Waters Wrap: Anthony wonders why US regulators are waging a war using fines, while European regulators have chosen a less draconian path.
Banks fret over vendor contracts as Dora deadline looms
Thousands of vendor contracts will need repapering to comply with EU’s new digital resilience rules
Chevron’s absence leaves questions for elusive AI regulation in US
The US Supreme Court’s decision to overturn the Chevron deference presents unique considerations for potential AI rules.
Aussie asset managers struggle to meet ‘bank-like’ collateral, margin obligations
New margin and collateral requirements imposed by UMR and its regulator, Apra, are forcing buy-side firms to find tools to help.
The costly sanctions risks hiding in your supply chain
In an age of geopolitical instability and rising fines, financial firms need to dig deep into the securities they invest in and the issuing company’s network of suppliers and associates.