Featured Product

    US Agencies to Review Treatment of Foreign Funds Under Volcker Rule

    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 Articles
    News

    APRA Updates Lists of Validation and Derivation Rules in December 2019

    APRA updated the lists of the Direct to APRA (D2A) validation and derivation rules for authorized deposit-taking institutions, insurers, and superannuation entities.

    December 13, 2019 WebPage Regulatory News
    News

    APRA Finalizes Prudential Standard for Credit Risk Management of Banks

    APRA updated the prudential standard on credit risk management requirements (APS 220) for authorized deposit-taking institutions, post a public consultation.

    December 12, 2019 WebPage Regulatory News
    News

    EIOPA Consults on Guidelines on ICT Security and Governance

    EIOPA issued a consultation on guidelines on the Information and Communication Technology (ICT) security and governance by insurers.

    December 12, 2019 WebPage Regulatory News
    News

    BCBS Consults on Design of Prudential Treatment for Crypto-Assets

    BCBS published a discussion paper on the design of prudential treatment for crypto-asset exposures of banks.

    December 12, 2019 WebPage Regulatory News
    News

    NCUA Approves Delay of Risk-Based Capital Rules Until January 2022

    The NCUA Board held its eleventh open meeting of 2019 and approved a final rule to delay the effective date of the risk-based capital rules for credit unions to January 01, 2022.

    December 12, 2019 WebPage Regulatory News
    News

    APRA Issues Operational Risk Rules, Consults on Reporting Requirements

    APRA published an updated prudential standard APS 115 that sets out operational risk requirements for authorized deposit-taking institutions in Australia.

    December 11, 2019 WebPage Regulatory News
    News

    ESMA Updates Q&A on European Benchmarks Regulation in December 2019

    ESMA updated the question and answers (Q&A) document on the European Benchmarks Regulation.

    December 11, 2019 WebPage Regulatory News
    News

    APRA Decides to Keep Countercyclical Capital Buffer for Banks at 0%

    APRA announced its decision to keep the countercyclical capital buffer (CCyB) for authorized deposit-taking institutions on hold at zero percent.

    December 11, 2019 WebPage Regulatory News
    News

    ESMA on Draft Amendments to Indices and Recognized Exchanges Under CRR

    ESMA issued the final report on draft amendments to the Implementing Regulation (EU) 2016/1646, which specifies the main indices and recognized exchanges, under the Capital Requirements Regulation (CRR), that are relevant to credit institutions and investment firms subject to prudential requirements and trading venues.

    December 11, 2019 WebPage Regulatory News
    News

    FED Extends Consultation Period for Capital Requirements for Insurers

    FED is extending comment period for the proposed rule establishing risk-based capital requirements for depository institution holding companies that are significantly engaged in insurance activities.

    December 10, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 4316