US Agencies (CFTC, FDIC, FED, OCC, and SEC) adopted a final rule to exclude community banks from the Volcker Rule, in line with amendments to certain sections of the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act. The final rule, which is unchanged from the proposal, excludes, from the Volcker Rule, community banks with USD 10 billion or less in total consolidated assets and total trading assets and liabilities of 5% or less of total consolidated assets. The rule will become effective on July 22, 2019.
The final rule also permits a hedge fund or private equity fund, under certain circumstances, to share the same name or a variation of the same name with an investment adviser as long as the adviser is not an insured depository institution, a company that controls an insured depository institution, or a bank holding company. Volcker Rule generally restricts banking entities from engaging in proprietary trading and from owning, sponsoring, or having certain relationships with hedge funds or private equity funds.
The agencies reviewed and determined that the final rule would not change the current reporting, recordkeeping, or third-party disclosure requirements associated with section 13 of the Bank Holding Company Act of 1956 under the Paperwork Reduction Act. However, the final rule would reduce the number of respondents for FED (including OCC-, FDIC-, SEC-, and CFTC-supervised institutions under a holding company), FDIC (with respect to supervised institutions not under a holding company), and OCC (supervised institutions not under a holding company), which will be addressed as a non-material change to OMB.
Effective Date: July 22, 2019
Keywords: Americas, US, Banking, Securities, EGRRCP Act, Community Banks, Volcker Rule, BHC Act, Proprietary Trading, FED
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