U.S. Volcker Rule Passed By Regulators

Yesterday, the U.S. SEC, CFTC, FDIC, Federal Reserve, and Office of the Comptroller of the Currency approved the final rules implementing the provision of the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act commonly referred to as the Volcker Rule. The Volcker Rule is ultimately designed to restrict the finance industry in the wake of the 2008-09 financial crisis and generally limit risk-taking by banks with federally insured deposits.

Named after former Federal Reserve chairman Paul Volcker, the long awaited final rules generally prohibit banking entities (defined to include insured depository institutions, companies controlling insured depository institutions, companies treated as bank holding companies for the purpose of the U.S. International Banking Act of 1978, and their respective affiliates and subsidiaries) from (i) engaging in short-term proprietary trading of securities, derivatives, commodity futures and options on these instruments for