Foreign Investment Funds
At the end of last week, the Fed and the other banking agencies
issued an interpretation that applied to investments in certain
foreign funds by foreign banking organizations that are subject to
the Volcker rule. Such banks may control what is known as an
excluded foreign fund until July 21, 2018, without having the
investments made by such fund being subject to the Volcker rule.
Under the Fed's interpretation of the Volcker rule, certain
investment funds sold exclusively outside the U.S. would be deemed
subject to the Volcker rule if these funds were controlled by a
foreign bank that was itself subject to the Volcker rule.
This issue arises in circumstances where a foreign bank may be
deemed to "control" the foreign fund through ownership
interests, ability to manage or otherwise direct the business of
the foreign fund. In such a case, the fund could be an affiliate of
the foreign bank and be subject to the Volcker rule's
restrictions on
