The Volcker Rule Provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act
On June 30, 2010, the U.S. House of Representatives passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which is widely expected to be passed by the U.S. Senate and signed into law by President Obama. Among the most consequential features of the legislation is the so-called “Volcker Rule”. Named after Paul Volcker, the former chairman of the Federal Reserve, the Volcker Rule will, subject to limited exceptions, ban banking organizations from engaging in proprietary trading and sponsoring or investing in hedge funds and private equity funds. Our July 6, 2010 memorandum, “U.S. Congress Nears Completion of Landmark Financial Services Reform Legislation”, provided an overview of the legislation. This memorandum provides additional detail on the Volcker Rule.