US Agencies (CFTC, FDIC, FED, OCC, and SEC) are proposing to amend the regulations implementing the Bank Holding Company (BHC) Act’s prohibitions and restrictions on proprietary trading and certain interests in, and relationships with, hedge funds and private equity funds. The proposal is to amend the regulations in a manner consistent with the statutory amendments made pursuant to certain sections of the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act. Comments will be accepted for 30 days after publication in the Federal Register.
These statutory amendments modified Section 13 of the BHC Act, also known as the Volcker Rule, to exclude certain community banks from the Volcker Rule and to permit banking entities subject to the Volcker Rule to share a name with a hedge fund or private equity fund that it organizes and offers under certain circumstances. Specifically, the statutory amendments exclude, from these restrictions, certain firms that have consolidated assets equal to USD 10 billion or less and total trading assets and liabilities equal to 5% or less of total consolidated assets; they also amend the restrictions applicable to the naming of a hedge fund or private equity fund to permit an investment adviser that is a banking entity to share a name with the fund under certain circumstances.
EGRRCP Act, which was enacted on May 24, 2018, amended the Volcker Rule by modifying the definition of banking entity to exclude certain small firms from restrictions and by permitting a banking entity to share a name with a hedge fund or private equity fund that it organizes and offers under certain circumstances. The US Agencies are proposing to amend the regulations implementing Section 13 of the BHC Act in a manner consistent with the statutory amendments made by the EGRRCP Act. Volcker Rule generally prohibits any banking entity from engaging in proprietary trading or from acquiring or retaining an ownership interest in, sponsoring, or having certain relationships with a hedge fund or private equity fund, subject to certain exemptions. Under the statute, the authority for developing and adopting regulations to implement the prohibitions and restrictions under Section 13 of the BHC Act is shared among the US Agencies.
Comment Due Date: FR + 30 days
Keywords: Americas, US, Banking, Securities, Volcker Rule, BHC Act, EGRRCP Act, US Agencies
Previous ArticleUS Treasury Grants Exemptions for QFC Recordkeeping Related to OLA
FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).
EBA published a statement on resolution planning in light of the COVID-19 pandemic.
BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework
PRA published a statement to insurers that clarifies the approach to application of the matching adjustment during COVID-19 crisis.
EBA published a report on the implementation of selected COVID-19 policies within the prudential framework for banking sector.
EC launched a consultation to revise the network and information systems (NIS) Directive (2016/1148), which was adopted in July 2016 and is the first horizontal internal market instrument aimed at improving the resilience of the EU against cybersecurity risks.
PRA published a statement that outlines its view on the implications of LIBOR transition for contracts in scope of the “Contractual Recognition of Bail-In” and “Stay in Resolution” parts of the PRA Rulebook.
PRA published the policy statement PS15/20 to reflect additional resilience associated with higher macro-prudential buffers in a standard risk environment with a reduction in Pillar 2A capital requirements.
BCBS published the eighteenth progress report on implementation of the Basel III regulatory framework in member jurisdictions.
FCA announced proposals that would provide continued support for certain consumer credit products to users, who are facing a financial impact because of the exceptional circumstances arising from the COVID-19 pandemic.