The Volcker Rule: Compliance Considerations - January 2012

Every banking organization will have compliance obligations under the Volcker Rule¹ published in November (the "Proposed Rule") by four of the federal financial regulatory agencies and, in January, by the Commodity Futures Trading Commission (collectively, the "Agencies").² The Volcker Rule broadly prohibits a banking entity from engaging in proprietary trading and from acquiring or retaining any kind of ownership interest in or sponsoring a hedge fund or private equity fund. The Rule permits certain kinds of trading or fund activity, however, and the Proposed Rule addresses the parameters of and possible conditions on these activities. Compliance with the requirements in the Proposed Rule and some suggestions for a more streamlined approach are the focus of this paper.³