General Information & Client Services
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
July 21, 2017

Five US Agencies (CFTC, FDIC, FED, OCC, and SEC) announced that they are coordinating their respective reviews of the treatment of certain foreign funds under the Volcker Rule (section 619 of the Dodd-Frank Act), along with the agencies' implementing regulations. These foreign funds are investment funds organized and offered outside of the United States that are excluded from the definition of "covered fund" under the agencies' implementing regulations. FDIC, FED, and OCC have also issued a statement on the treatment of certain foreign funds under the rules implementing Section 13 of the Bank Holding Company Act.

Section 619, and the implementing regulations, generally do not apply to investments in, or sponsorship of, these foreign excluded funds by a foreign banking entity. However, complexities in the statute and the implementing regulations may result in certain foreign excluded funds becoming subject to regulation under section 619 because of governance arrangements with or investments by a foreign bank. Therefore, a number of foreign banking entities, foreign government officials, and other market participants have expressed concern about possible unintended consequences and extraterritorial impact. The staff of the agencies are considering ways in which the implementing regulations may be amended, or other appropriate action may be taken. Congressional action might be necessary to fully address the issue. To aid full consideration, the federal banking regulators, which generally oversee foreign banks, announced that they would not take action under section 619 for qualifying foreign excluded funds, subject to certain conditions, for a period of one year.

 

Section 619 generally prohibits insured depository institutions and any company affiliated with an insured depository institution from engaging in proprietary trading and from acquiring or retaining ownership interests in, sponsoring, or having certain relationships with a covered fund. These prohibitions are subject to a number of statutory exemptions, restrictions, and definitions. Final regulations implementing section 619 were issued by these five agencies. This announcement does not otherwise modify the rules implementing section 619 and is limited to certain foreign excluded funds that may be subject to the Volcker Rule and implementing regulations due to their relationships with or investments by foreign banking entities.

 

Related Links

Press Release

Statement on Treatment of Foreign Funds (PDF)

Keywords: Americas, United States of America, US Agencies, Dodd Frank Act, Volcker Rule, Foreign Funds, Banking, Securities

Related Insights

IMF Reports on 2017 Article IV Consultation with China

August 15, 2017 WebPage Regulatory News

EBA Updates Data Used for the Identification of G-SIIs

August 11, 2017 WebPage Regulatory News

Basel III Monitoring Updates for August 2017

August 10, 2017 WebPage Regulatory News

ESMA Published Opinions on Position Limits Under MiFID II

August 10, 2017 WebPage Regulatory News

FED Updates Reporting Form FR Y-14Q in August 2017

August 08, 2017 WebPage Regulatory News

MAS Consults on Revisions to the Deposit Insurance Scheme

August 04, 2017 WebPage Regulatory News

EBA Single Rulebook Q&A: First Update for August 2017

August 04, 2017 WebPage Regulatory News

EBA Consults on Its Approach to Financial Technology

August 04, 2017 WebPage Regulatory News

OCC Seeks Comments on Revising the Volcker Rule

August 02, 2017 WebPage Regulatory News

PRA Update on BEEDS Portal UAT for Capital+ Reporting

July 31, 2017 WebPage Regulatory News

IAIS Consults on Revisions to ICP 24

July 31, 2017 WebPage Regulatory News

EBA Single Rulebook: Final Q&A Updates in July 2017

July 28, 2017 WebPage Regulatory News

ESRB Publishes Its Annual Report for 2016

July 28, 2017 WebPage Regulatory News

EIOPA Consults on Information Requests on IORPs

July 26, 2017 WebPage Regulatory News

Bundesbank Updates Structured Q&A on AnaCredit

July 25, 2017 WebPage Regulatory News

EIOPA Q&A on Regulations for July 2017

July 24, 2017 WebPage Regulatory News

BOM Updates Guidelines and Guidance Notes in July 2017

July 21, 2017 WebPage Regulatory News

OSFI Revises Implementation Timeline for the FRTB Rules

July 20, 2017 WebPage Regulatory News

FSB Report on the Peer Review of France

July 20, 2017 WebPage Regulatory News

IMF Report on the Use of Supervisory Standards in FSAP

July 20, 2017 WebPage Regulatory News

APRA Announces Stronger Capital Benchmarks for Banks

July 19, 2017 WebPage Regulatory News

IAIS Newsletter for July 2017

July 18, 2017 WebPage Regulatory News

ESMA Updates Q&A on UCITS and AIFMD

July 11, 2017 WebPage Regulatory News

ESRB Report on Resolving Non-Performing Loans in Europe

July 11, 2017 WebPage Regulatory News

SRB Publishes the 2016 Annual Report

July 11, 2017 WebPage Regulatory News

ESMA Updated Q&A on MiFID II/MiFIR Investor Protection

July 10, 2017 WebPage Regulatory News

EC Consults on Development of Secondary Market for NPLs

July 10, 2017 WebPage Regulatory News

ESMA Updates Q&A on Implementation of MiFID II

July 07, 2017 WebPage Regulatory News

ESMA Consults on Simplifications for Prospectuses

July 06, 2017 WebPage Regulatory News

ESMA Updated Q&A on Market Abuse Regulation

July 06, 2017 WebPage Regulatory News

FSB Progress Report on Financial Regulatory Reforms

July 03, 2017 WebPage Regulatory News

FED Reporting Updates for July 2017

July 03, 2017 WebPage Regulatory News

EBA Single Rulebook: Final Q&A Updates in June 2017

June 30, 2017 WebPage Regulatory News

FSB Reports on Reforms to OTC Derivatives Markets

June 29, 2017 WebPage Regulatory News

FED Reporting Updates for June 2017

June 28, 2017 WebPage Regulatory News

DNB Issued Banking Newsletter for June 2017

June 28, 2017 WebPage Regulatory News

EBA Publishes Annual Consumer Trends Report for 2017

June 28, 2017 WebPage Regulatory News

DNB Issues Insurance Newsletter for June 2017

June 28, 2017 WebPage Regulatory News

FPC Publishes Financial Stability Report in June 2017

June 27, 2017 WebPage Regulatory News

ECB Recommends Amendment to Article 22 of its Statute

June 23, 2017 WebPage Regulatory News

HKMA Circular on AML/CFT Amendment Bill 2017

June 23, 2017 WebPage Regulatory News

JFSA Consults on BCBS Pillar 3 Disclosure Requirements

June 23, 2017 WebPage Regulatory News

PRA Updates SS35/15 on Guidelines for Completing MLAR

June 23, 2017 WebPage Regulatory News

HKMA Consultation on Implementation of IRRBB Standards

June 22, 2017 WebPage Regulatory News

IAIS Newsletter for June 2017

June 22, 2017 WebPage Regulatory News

FCA Update on Regulatory Sandbox Under Project Innovate

June 22, 2017 WebPage Regulatory News

EBA Launched 2016 CVA Risk Monitoring Exercise

June 21, 2017 WebPage Regulatory News

PRA Published Consultation Paper on Recovery Planning

June 21, 2017 WebPage Regulatory News

EBA Responds to the EC Consultation on Fintech

June 15, 2017 WebPage Regulatory News

ESAs Published Annual Reports for 2016

June 15, 2017 WebPage Regulatory News

EIOPA Q&A on Regulations for June 2017

June 15, 2017 WebPage Regulatory News

RBI Accredits Another Credit Rating Agency INFOMERICS

June 13, 2017 WebPage Regulatory News

PRA Published CP6/17 on Regulatory Reporting

June 12, 2017 WebPage Regulatory News

Bundesbank Updates on AnaCredit Project for June 2017

June 12, 2017 WebPage Regulatory News

EC Approved Resolution of Banco Popular

June 07, 2017 WebPage Regulatory News

ESMA Chair Says Preparation for MiFID II is on Track

June 07, 2017 WebPage Regulatory News

Response of ESMA to EC Consultation on Fintech

June 07, 2017 WebPage Regulatory News

EC Report on Information Barriers in SME Funding Market

June 06, 2017 WebPage Regulatory News