Federal Reserve Issues Proposed Transition Rules for “Volcker Rule” Compliance
On November 17, 2010, the Federal Reserve released proposed transition rules for banking entities and certain other companies that will be subject to the “Volcker Rule” restrictions on proprietary trading and on investments in and sponsorship of private equity funds and hedge funds. The proposed transition rules, which are subject to a 45-day public comment period, implement provisions of the Volcker Rule that provide banking entities and certain other companies a defined period of time to conform their activities and investments to the Volcker Rule. This memorandum provides a summary of the Federal Reserve’s proposed transition rules.