Author: David Schwartz J.D. CPA
On December 10, 2013, five federal agencies issued final rules developed jointly to implement section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”). The final Volker Rules prohibit FDIC insured depository institutions and companies affiliated with insured depository institutions from engaging in short-term proprietary trading of certain securities, derivatives, commodity futures and options on these instruments, for their own account. The final rules also impose limits on banking entities’ investments in, and other relationships with, hedge funds or private equity funds. The multi-agency rules provide a multitude of exemptions for certain activities, including market making, underwriting, hedging, trading in government obligations, insurance company activities, and organizing and offering hedge funds or private equity funds. Reactions to these long awaited final rules were mixed, with some worried they are too complex and cumbersome, while others applauded the rules, and still others felt they did not go far enough.