On January 30, 2020, the Federal Reserve Board, FDIC, OCC, SEC, and CFTC issued a notice of proposed rulemaking to amend the
definition of "covered funds" under the Volcker Rule. The
proposal is intended to "improve and streamline" the
Volcker Rule’s treatment of covered funds, and to permit
banking entities to offer products and services that do not present
the sorts of regulatory concerns intended to be addressed by the
Volcker Rule. The agencies’ proposal is similar to their 2018
efforts to clarify the portions of the Volcker Rule governing
prohibitions on proprietary trading activities, which became
effective in January 2020.
The proposed rule represents a significant opportunity for banks
and their affiliates to shape and define new exclusions and
exemptions from the Volcker Rule’s prohibitions. Similarly,
certain funds, such as venture capital funds or SBICs, which may
seek investment from banking entities should also see this as an
opportunity to expand their
