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.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
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. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
Verafin launches genAI copilot for fincrime investigators
Features include document summarization and improved research tools.
Waters Wrap: Open source and storm clouds on the horizon
Regulators and politicians in America and Europe are increasingly concerned about AI—and, by extension, open-source development. Anthony says there are real reasons for concern.
DSB says industry is ready to meet UPI mandate ahead of deadline
The Unique Product Identifier will be required for certain OTC derivatives in the EU at the end of April, following US adoption in January.
‘Very careful thought’: T+1 will introduce costs, complexities for ETF traders
When the US moves to T+1 at the end of May 2024, firms trading ETFs will need to automate their workflows as much as possible to avoid "settlement misalignment" and additional costs.
Court case probes open-source licenses as movement stands at crossroads
The Software Freedom Conservancy’s lawsuit against TV-maker Vizio begins trial in California, raising questions about open-source licenses and the risks posed by adhering to them.
Waters Wavelength Podcast: Countdown to T+1
DTCC’s Val Wotton joins the podcast this week to discuss the impending move to T+1 in the US.
Consolidated tape hopefuls gear up for uncertain tender process
The bond tapes in the UK and EU are on track to be authorized in 2025. Prospective bidders for the role of provider must choose where to focus their efforts in anticipation of more regulatory clarity on the tender process.
Fighting FAIRR: Inside the bill aiming to keep AI and algos honest
The Financial Artificial Intelligence Risk Reduction Act seeks to fix a market abuse loophole by declaring that AI algorithms do not have brains.
Most read
- Chris Edmonds takes the reins at ICE Fixed Income and Data Services
- Deutsche Börse democratizes data with Marketplace offering
- Nasdaq reshuffles tech divisions post-Adenza