June 25, 2020

Financial regulators modify Volcker rule

  • Board of Governors of the Federal Reserve System
  • Commodity Futures Trading Commission
  • Federal Deposit Insurance Corporation
  • Office of the Comptroller of the Currency
  • Securities and Exchange Commission

For release at 12:00 p.m. EDT

Five federal regulatory agencies today finalized a rule modifying the Volcker rule's prohibition on banking entities investing in or sponsoring hedge funds or private equity funds—known as covered funds. The final rule is broadly similar to the proposed rule from January.

The Volcker rule generally prohibits banking entities from engaging in proprietary trading and from acquiring or retaining ownership interests in, sponsoring, or having certain relationships with a hedge fund or private equity fund.

Like the proposal, the final rule modifies three areas of the rule by:

  • Streamlining the covered funds portion of rule;
  • Addressing the extraterritorial treatment of certain foreign funds; and
  • Permitting banking entities to offer financial services and engage in other activities that do not raise concerns that the Volcker rule was intended to address.

The rule will be effective on October 1.

Media Contacts:
Federal Reserve Board
Eric Kollig
202-452-2955
CFTC
Public Affairs
202-418-5080
FDIC
Brian Sullivan
202-898-6534
OCC
Bryan Hubbard
202-649-6870
SEC
Public Affairs
202-551-4120
Last Update: July 31, 2020