Observations On The Volcker Funds Proposal

On January 30, the five regulatory agencies responsible for implementing the Volcker Rule approved a notice of proposed rulemaking that would make significant revisions to the "covered funds" provisions of the rule (the "Proposal"). The Proposal aims to revise aspects of the rule that have constrained banking activities that the rule was not intended to restrict, including certain activities outside the United States. The Proposal would also codify a number of interpretive clarifications. Key elements include:

• New covered fund exclusions for credit funds, venture capital funds, family wealth management vehicles and client facilitation vehicles, but no change to the baseline definition of covered fund.