The Volcker Rule: Overview and Recent Developments Affecting Banking Entities, Funds and Securitization Vehicles

June 24, 2014

Following years of incubation, in December 2013, five U.S. regulatory agencies approved a final rule implementing the so-called “Volcker Rule” enacted in the Dodd-Frank Act. At a basic level, the Volcker Rule is intended to limit risks to the financial system that Congress believes may be created by: (i) proprietary trading operations of insured depository institutions, foreign banking entities with certain U.S. operations, and the affiliates of the foregoing entities through a set of “proprietary trading restrictions;” and (ii) investments and certain relationships between banking entities and private equity and hedge funds through a set of “covered fund restrictions.”

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