A Look At The Proposal To Simplify The Volcker Rule

On May 30, the Federal Reserve issued a proposal (the "Proposed Regulations") to revamp regulations implementing the Volcker Rule, a centerpiece of the Dodd-Frank Act. The 373-page proposal, developed jointly with the other federal banking agencies and the Securities and Exchange Commission ("SEC") and the Commodity Futures Trading Commission ("CFTC") (collectively, the "Agencies"),¹ comes four and a half years after the original regulations were adopted.

The Proposed Regulations attempt to tailor compliance requirements, with more onerous requirements applying to banking entities with significant trading assets and liabilities, and to streamline and simplify how various exemptions and reporting requirements work. Among other things, the proposal would scrap the 60-day rebuttable presumption for when financial instruments are deemed to be for a banking entity's trading account, eliminate the "enhanced" standards for compliance programs, expand the scope of the