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ARTICLE · 09 OCTOBER 2015

Agencies Issue Two New Volcker Rule FAQs

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Accordingly, banking entities that engage in prime brokerage transactions with legacy covered funds must submit their first certification by March 31, 2017.

United StatesFinance and Banking
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On September 25, 2015, the US Federal Reserve Board, the OCC, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, and the Commodity Futures Trading Commission (the "Agencies") released two new frequently asked questions on the Volcker Rule. FAQ 17 clarifies compliance requirements for market making and the identification of covered funds. FAQ 18 relates to CEO certification for prime brokerage transactions.

FAQ 17

The Volcker Rule allows for an exemption for market making-related activity under the condition that a banking entity establishes, implements, maintains and enforces a reasonably designed compliance program for a trading desk engaged in market making-related activity. In FAQ 17, the Agencies establish that for purposes of satisfying the Volcker Rule's exemption for market making, a reasonably designed compliance program may include reasonable reliance on objective factors to determine whether a security is issued by a

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