Volcker Rule Restrictions on Proprietary Trading and Relationships with Hedge Funds and Private Equity Funds

Section 619 of the Dodd-Frank Act added a new section 13 to the Bank Holding Company (“BHC”) Act (codified at 12 U.S.C. § 1851) that, subject to certain exemptions, generally prohibits any banking entity from engaging in proprietary trading or from investing in, sponsoring, or having certain relationships with a hedge fund or private equity fund (“covered fund”) (the “Volcker Rule”). The BHC Act also provides for certain nonbank financial companies that engage in such activities or have such investments or relationships to be subject to additional capital requirements, quantitative limits, or other restrictions. The agencies are revising to the Volcker Rule to provide banking entities with a greater certainty about what activities are prohibited and to improve supervision and implementation of section 13 of the BHC Act, while reducing the overall complexity and burden associated with the prior rule.

The latest form for Volcker Rule Restrictions on Proprietary Trading and Relationships with Hedge Funds and Private Equity Funds expires 2023-07-31 and can be found here.

351.11(a)(2) - Initial Setup

Federal Enterprise Architecture: Economic Development - Financial Sector Oversight