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ARTICLE · 01 DECEMBER 2015

US Regulatory Agencies Issue Two New Volcker Rule FAQs

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The Agencies expect a banking entity to engage in good faith efforts to conform to the "Super 23A" restrictions by the end of the conformance period.

United StatesFinance and Banking
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On November 20, 2015, the US Federal Reserve Board, Office of the Comptroller of the Currency, FDIC, Securities and Exchange Commission and Commodity Futures Trading Commission (collectively, the Agencies) released two new Frequently Asked Questions in respect of the Volcker Rule. FAQ 19 relates to a banking entity's residual market- making positions following termination of its market-making business. FAQ 20 clarifies the applicability of the Volcker Rule's so-called "Super 23A" provisions to covered transactions entered into before and after the Volcker Rule's conformance period. FAQ 19 refers to situations where a banking entity terminates its market-making business and holds residual positions from its prior market-making activities. The FAQ states that the banking entity may hold and dispose of such residual market-making positions, provided that: (i) the banking entity hedges the risks of any such positions in accordance with the requirements of the Volcker

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