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: https://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
Doing a deal? Prioritize info security early
Engaging information security teams early in licensing deals can deliver better results and catch potential issues. Neglecting them can cause delays and disruption, writes Devexperts’ Heetesh Rawal in this op-ed.
SEC pulls rulemaking proposals in bid for course correction
The regulator withdrew 14 Gensler-era proposals, including the controversial predictive data analytics proposal.
Trading venues seen as easiest targets for Esma supervision
Platforms do not pose systemic risks for member states and are already subject to consistent rules.
The Consolidated Audit Trail faces an uncertain fate—yet again
Waters Wrap: The CAT is up and running, but with a conservative SEC in place and renewed pressure from politicians and exchanges, Anthony says the controversial database faces a death by a thousand cuts.
Exchanges plead with SEC to trim CAT reporting requirements
Letters from Cboe, Nasdaq and NYSE ask that the new Atkins administration reduce the amount of data required for the Consolidated Audit Trail, and scrap options data collection entirely.
EU banks want the cloud closer to home amid tariff wars
Fears over US executive orders have prompted new approaches to critical third-party risk management.
Friendly fire? Nasdaq squeezes MTF competitors with steep fee increase
The stock exchange almost tripled the prices of some datasets for multilateral trading facilities, with sources saying the move is the latest effort by exchanges to offset declining trading revenues.
Europe is counting its vendors—and souring on US tech
Under DORA, every financial company with business in the EU must report use of their critical vendors. Deadlines vary, but the message doesn’t: The EU is taking stock of technology dependencies, especially upon US providers.