The Volcker Rule and Private Funds: Final Regulations Are Out
More than three years after the enactment of the Dodd-Frank Act, regulators have reached an important milestone: the implementation of the so-called “Volcker Rule,” arguably one of the most controversial features of the financial overhaul law. On December 10, five U.S. financial regulators, including the Federal Reserve and the SEC, approved final rules to prohibit banking entities from engaging in proprietary trading and from investing in or sponsoring private equity funds and hedge funds. In conjunction with the release of the final rules, the Federal Reserve issued an order providing a blanket one-year extension to the deadline to comply with the Volcker Rule. As a result, banking entities have until July 21, 2015 to conform their activities to the Volcker Rule.
This memorandum focuses on the portion of the final rules relating to banking entities’ activities with private funds.