Volcker Agencies Finalize Covered Fund Amendments

On June 25, the five regulatory agencies responsible for implementing the Volcker Rule approved a Final Rule that makes significant revisions to the "covered funds" provisions of the current implementing regulations. The amendments in the Final Rule represent a significant narrowing of the covered funds prohibitions to better focus on the risks the Volcker Rule was intended to address, and should provide new flexibility for banking entities to engage in both fund investment and customer-driven asset management activities inside and outside the United States. Key elements include:

• New exclusions for credit funds, venture capital funds, family wealth management vehicles, and client facilitation vehicles, and an expanded scope for the public welfare fund exclusion.