October 12, 2011
Volcker Rule Proposed by the SEC
More than a year after the passage of Dodd-Frank, the S.E.C. voted today to propose a rule to implement section 619 of the Dodd-Frank Act, commonly known as the "Volcker" rule. The Volcker Rule under Dodd-Frank generally prohibits federally-insured banks and their affiliates from engaging in derivative trading for the bank's own account. Dodd-Frank also prohibits banks from owning or having a substantial relationship with a hedge fund or private equity fund. The SEC proposed rules seek to fulfill this mandate by requiring institutions trading in derivatives to report quantitative measurements to the SEC while also allowing for a broad range of exemptions to the registration and reporting requirements under the rule. (SEC Press Release; Commissioner Shapiro's comments on the Volcker Rule). The SEC, which is acting in concert with the FDIC, Federal Reserve, and the OCC, will be taking comments on the proposed rule until January 13, 2012-- both the text of the proposed rule and the comment process are available here.
SSRN has a laundry list of articles dissecting Dodd-Frank, but here are a few that are focused on the Volcker Rule:
- Charles Whitehead (Cornell), The Volcker Rule & Emerging FInancial Markets
- Andrew Tuch (a Harvard SJD candidate), Conflicted Gatekeepers
- Hrishikesh Vinod (Fordham Econ Dept.), Financial Reform, Innovative Hedging and the Volcker Rule