Client Alert

Federal Banking Agencies Announce No-action Position on Certain Foreign Excluded Funds Under the Volcker Rule

24 Jul 2017

Section 13 of the Bank Holding Company Act of 1956, as amended, and its implementing regulations (the "Volcker Rule") generally prohibit a "banking entity" from engaging in proprietary trading and from investing in, sponsoring, or having certain relationships with "covered funds." On July 21, 2017, the Board of Governors of the Federal Reserve System (the "Board"), the Office of the Comptroller of the Currency (the "OCC"), and the Federal Deposit Insurance Corporation (the "FDIC" and, together with the Board and the OCC, the "Banking Agencies") jointly released a Statement regarding Treatment of Certain Foreign Funds under the Rules Implementing Section 13 of the Bank Holding Company Act. In short, the Banking Agencies will not enforce the prohibitions and restrictions of the Volcker Rule with respect to the activities of certain "qualifying foreign excluded funds" controlled by "foreign banking entities" for a one-year period through July 21, 2018.

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