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
EBA issued a revised list of validation rules with respect to the implementing technical standards on supervisory reporting.
EBA published its response to the call for advice of EC on ways to strengthen the EU legal framework on anti-money laundering and countering the financing of terrorism (AML/CFT).
NGFS published a paper on the overview of environmental risk analysis by financial institutions and an occasional paper on the case studies on environmental risk analysis methodologies.
MAS published the guidelines on individual accountability and conduct at financial institutions.
APRA published final versions of the prudential standard APS 220 on credit quality and the reporting standard ARS 923.2 on repayment deferrals.
SRB published two articles, with one article discussing the framework in place to safeguard financial stability amid crisis and the other article outlining the path to a harmonized and predictable liquidation regime.
FSB hosted a virtual workshop as part of the consultation process for its evaluation of the too-big-to-fail reforms.
ECB updated the list of supervised entities in EU, with the number of significant supervised entities being 115.
OSFI published the key findings of a study on third-party risk management.
FSB is extending the implementation timeline, by one year, for the minimum haircut standards for non-centrally cleared securities financing transactions or SFTs.