Volcker Rule FAQs
On June 10, 2014, each of the Securities and Exchange Commission (SEC), the FRB, the OCC and the FDIC (collectively, the "Agencies") issued Frequently Asked Questions regarding implementation of Section 13 of the Bank Holding Company Act (the "Volcker Rule"). The Volcker Rule generally prohibits banking entities from engaging in proprietary trading or from acquiring or retaining an ownership interest in, or sponsoring, a hedge fund or private equity fund, subject to certain exemptions. The Agencies and the Commodity Futures Trading Commission issued regulations implementing the Volcker Rule on December 10, 2013 .The FAGs address :
- When banking entities subject to the requirement to report certain quantitative measure ments must begin reporting data.
- The definition of trading desk and conclude that , in some circumstances , a trading desk may span more than one legal entity.
- The conformance period (confirming that a banking entity is not required to deduct its permitted investment in covered funds fro m its Tier 1 capital until the end of the conformance period, which is currently July 21, 2015 ).
- Loan securitization servicing assets (clarifying that servicing assets may be any type of asset but that any servicing asset that is a security must be a permitted type of security, including cash equivalents ).
- Seeding period for foreign public fund (confirming that an entity that is for med and operated pursuant to a written plan to become a foreign public fund will not be treated as a covered fund during its seeding period).
- The name sharing restrictions applicable to covered funds organized and offered by a banking entity as part of a trust, fiduciary, investment or commodity trading advisory business.
OCC Interim Volcker Rule Examination Procedures
On June 12. 2014, the OCC issued interim examination procedures applicable to national banks, federal savings associations , and federal branches and agencies of foreign banks with respect to activities subject to the Volcker Rule. The interim procedures are designed to help examiners understand and focus on the Volcker Rule's key components and to work with banks during the conformance period to measure progress toward achieving compliance by the July 21, 2015 , deadline.