Volcker Rule: Federal Agencies Propose Amendments to Covered Funds Provisions

Sullivan & Cromwell LLP - January 31, 2020

On January 30, 2020, the Federal Reserve, OCC, FDIC, SEC and CFTC approved a notice of proposed rulemaking to amend the regulations implementing the so-called “Volcker Rule” provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The NPR proposes a number of targeted amendments to the Volcker Rule regulations, principally focused on the restrictions on banking entities’ investments in and other relationships with “covered funds.” Many of these amendments directly address aspects of the existing regulations that have proven in practice to be complex and burdensome or to have unintended consequences. The NPR aligns with the Agencies’ ongoing commitment to tailor and streamline regulation and to ensure that both the benefits and costs of activities restrictions are carefully weighed. The NPR also incorporates and proposes to codify certain interpretive guidance and policy statements previously issued by the Agencies. Comments on the NPR will be due on April 1, 2020.