FINANCIAL SERVICES FLASH REPORT

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "FINANCIAL SERVICES FLASH REPORT"

Transcription

1 FINANCIAL SERVICES FLASH REPORT The Volcker Rule: The End of Proprietary Trading? October 13, 2011 This week in the United States, the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Securities and Exchange Commission coordinated the release of proposed regulations implementing the Volcker Rule as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Commodity Futures Trading Commission is in the process of releasing similar regulations. If enacted as written, these regulations, in addition to restricting bank investments in hedge and private equity funds, will likely achieve the primary goal of forcing insured depository institutions, bank holding companies, as well as their subsidiaries and affiliates ( banking entities ) to exit the proprietary trading business. In addition to the loss of potential profitability from proprietary trading, these banking entities will also incur additional compliance costs associated with their utilization of proprietary trading instruments to manage risk and to support customer transactions. While the Volcker Rule is focused on banking entities, systematically important nonbank financial companies engaged in proprietary trading may still be subject to additional capital requirements and quantitative limits. Rules Regarding Proprietary Trading Proprietary trading is defined by the proposed regulations as the act of engaging as the principal for a trading account of a banking entity in any security, derivative or certain other financial instruments, collectively referred to in this document as proprietary trading instruments. This definition includes transactions in commodities that will be physically settled. There are several provisions that allow the banking entity to act solely as agent, broker or custodian for an unaffiliated party. These are viewed in the press as wide loopholes that will permit business as usual. We do not believe that to be the case and we anticipate that the compliance burden related to these activities will be significant. The most significant components of the regulations that will impact the ability of a banking entity to conduct proprietary trading are embodied in two specific requirements. The market making activities must be designed to generate revenues primarily from fees, commissions, bid/ask spreads or other income not attributable to the appreciation in value of the covered financial positions it holds in trading accounts or the hedging of covered financial positions it holds in trading accounts. The compensation arrangements of persons performing the market making, underwriting or hedging related activities must be designed not to reward proprietary risk-taking.

2 The entire purpose of proprietary trading is to take positions in a market in order to profit from anticipated price movements. These activities are not driven by fees or commissions and only under a tortured definition of the bid\ask spread could anyone argue that gains and losses derived from proprietary trading are generated through changes in the bid/ask spread over time. Further, limiting the compensation arrangements of traders will more than likely drive these personnel to organizations that are not classified as banking entities in a rapid manner. This is the intent and core objective of Congress. Compliance Requirements Associated with the Use of Proprietary Trading Instruments Banking entities will not escape the utilization of proprietary trading instruments. Customers will still seek to execute such transactions through banking entities. Additionally, banking entities will create risks within their own operations that need to be mitigated through the utilization of proprietary trading instruments. In order to ensure that these activities do not constitute proprietary trading, the compliance requirements will be necessarily onerous. The proposed regulations require banking entities to demonstrate affirmatively that the utilization of proprietary trading instruments falls within the approved guidelines. In other words, institutions must be able to prove their innocence. The proposed regulations do allow the utilization of proprietary trading instruments for underwriting activities, customer market making activities or for risk management requirements. According to the proposal, compliance requirements will include evidencing and demonstrating the following: Existence of an internal compliance program that is designed to ensure the banking entity s compliance with the requirements of Trading Account definitions, including reasonably designed policies and procedures, internal controls and independent testing. The purchase or sale of a proprietary trading instrument is affected solely in connection with a distribution of securities for which the banking entity is acting as underwriter. The trading desk regularly holds itself out to conduct transactions in the market and that it regularly executes such transactions. Underwriting or market making activities are designed not to exceed the reasonably expected near-term demands of clients, customers or counterparties. Underwriting, market making or risk management activities are designed to generate revenues primarily from fees, commissions, or normal underwriting or bid/ask spreads. Underwriting, market making or risk management-related activities of the trading desk are consistent with the regulations and commentary regarding identification of permitted nonproprietary trading related activities. Proprietary trading instruments are utilized for specific risk management purposes, including market risk, counterparty or other credit risk, currency or foreign exchange risk, interest rate risk, basis risk, or similar risks that did not evolve from proprietary trading activities. For proprietary trading instruments utilized for risk management, there is reasonable correlation between the underlying risk and the hedging position, as well as the liquidity of those positions. Protiviti 2

3 At the time of purchase or sale of a proprietary trading instrument acquired for a riskmitigating purpose, the transaction is designed to reduce risk and that the hedge relationship is documented. Compliance with multiple regulatory quantitative measurements and ratios designed to detect the existence of proprietary trading. Compensation arrangements of persons performing underwriting, market making or risk management activities are designed not to reward proprietary risk-taking. The banking entity is a dealer registered with the SEC or CFTC or exempt from registration within the United States, but subject to substantive regulation of such business in the jurisdiction where the business is located. Trading activities are subject to continuing review, monitoring and management by the banking entity. Broadly, the regulations provide that the banking entities develop and implement compliance programs that can evidence and demonstrate the above, including the following: Internal written policies and procedures reasonably designed to document, describe and monitor trading activities A system of internal controls reasonably designed to monitor and identify potential areas of noncompliance A management framework that clearly delineates responsibility and accountability for compliance Independent testing for the effectiveness of the compliance programs conducted by qualified personnel of the banking entity or by a qualified outside party Training for trading personnel and managers, as well as other appropriate personnel, to effectively implement and enforce the compliance program, Making and keeping records sufficient to demonstrate compliance As these proposed regulations imply, the compliance requirements associated with the utilization of proprietary trading instruments will be significant in order to demonstrate that the banking entity is not involved in proprietary trading. Documentation requirements will be required from the outset of executing such transactions. This will require enhancements to existing processes, procedures and systems to track, measure and manage proprietary trading instruments and the underlying risks, as well as changes in controls and processes regarding how such activities are documented and managed. This will occur under the backdrop of changing business strategies as a result of the termination of proprietary trading strategies. Ramifications for Non-Financial Institutions For companies that are not classified as banking entities, the final adoption of the Volcker Rule is expected to have real ramifications in the markets. Over the last decade, banking entities have often taken the lead in market making within commodities, currency and interest rate markets. These same institutions have also generally used their lending facilities to drive business to their trading desks. This has generally been viewed as efficient from an execution and credit perspective. The prohibition of proprietary trading within banking entities will likely Protiviti 3

4 have important ramifications. For example, it may lead to a decrease in liquidity within certain markets and/ or a decrease in the ability of a banking entity to transact in such markets on a rapid basis. As a result, non-financial institutions will need to look carefully at their requirements as they consider the entities through which to execute their own risk management needs. Ensuring the Prohibition on Proprietary Trading In order to ensure that banking entities are not involved in proprietary trading, the Volcker Rule also prohibits investments of greater than 3 percent in hedge funds, investment funds or other similar investment vehicles that may be engaged in proprietary trading. Additional Exceptions The most significant exception to this legislation is that it does not restrict foreign banks operating within the United States as banking entities from engaging in proprietary trading so long as the transaction occurs completely outside the United States. It will be interesting to observe the ramifications of this exception within the market. Further, there are additional exceptions to the Volcker Rule related to transacting in governmental and municipal securities. Comment Period and Proposed Implementation Timeline The proposed regulations are open for comment for a 90-day period that will end on January 13, The entities impacted by this legislation will have two years (July 2014) within which to implement the required compliance requirements. Certain extensions can be requested to extend the compliance deadline to July 2017 and to July 2022 for certain illiquid assets. The length of this implementation timeline represents the most significant loophole remaining for changing political will. Protiviti 4

5 About Protiviti Protiviti ( is a global consulting firm that helps companies solve problems in finance, technology, operations, governance, risk and internal audit. Through our network of more than 70 offices in over 20 countries, we have served more than 35 percent of FORTUNE 1000 and Global 500 companies. We also work with smaller, growing companies, including those looking to go public, as well as with government agencies. Protiviti is a wholly owned subsidiary of Robert Half International Inc. (NYSE: RHI). Founded in 1948, Robert Half International is a member of the S&P 500 index. Contacts Carol Beaumier Executive Vice President Global Industry Programs Global Leader Financial Services Practice Cory Gunderson Managing Director U.S. Financial Services Practice Leader Global Leader Risk & Compliance Solutions David Johnson Managing Director Market Risk & Commodity Trading Solutions Protiviti Inc. An Equal Opportunity Employer. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services.

Client Alert The Volcker Rule Proprietary Trading Prohibition:

Client Alert The Volcker Rule Proprietary Trading Prohibition: North America Banking & Finance Client Alert The Volcker Rule Proprietary Trading Prohibition: January 2014 A Primer for Nonfinancial Company CFOs and Treasurers Prepared by: Daniel L. Goelzer + 1 202

More information

Agencies Adopt Final Rules Implementing The Volcker Rule; Federal Reserve Board Extends Conformance Period

Agencies Adopt Final Rules Implementing The Volcker Rule; Federal Reserve Board Extends Conformance Period CLIENT MEMORANDUM Agencies Adopt Final Rules Implementing The Volcker Rule; Federal Reserve Board Extends December 18, 2013 AUTHORS David S. Katz Jack I. Habert Laura P. Gavenman On December 10, 2013,

More information

STATEMENT OF MARTIN J. GRUENBERG CHAIRMAN FEDERAL DEPOSIT INSURANCE CORPORATION VOLCKER RULE IMPLEMENTATION. before the

STATEMENT OF MARTIN J. GRUENBERG CHAIRMAN FEDERAL DEPOSIT INSURANCE CORPORATION VOLCKER RULE IMPLEMENTATION. before the STATEMENT OF MARTIN J. GRUENBERG CHAIRMAN FEDERAL DEPOSIT INSURANCE CORPORATION on VOLCKER RULE IMPLEMENTATION before the COMMITTEE ON FINANCIAL SERVICES UNITED STATES HOUSE OF REPRESENTATIVES February

More information

PART 75 PROPRIETARY TRADING AND CERTAIN INTERESTS IN AND RELATIONSHIPS WITH COVERED FUNDS.

PART 75 PROPRIETARY TRADING AND CERTAIN INTERESTS IN AND RELATIONSHIPS WITH COVERED FUNDS. PART 75 PROPRIETARY TRADING AND CERTAIN INTERESTS IN AND RELATIONSHIPS WITH COVERED FUNDS. SUBPART A Section 1 Section 2 SUBPART B Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 Section 9

More information

Regulatory Practice Letter December 2013 RPL 13-21

Regulatory Practice Letter December 2013 RPL 13-21 Regulatory Practice Letter December 2013 RPL 13-21 Prohibitions and Restrictions on Proprietary Trading and Relationships with Hedge Funds and Private Equity Funds (Volcker Rule) - Final Rule Executive

More information

Title VII: Derivatives (Wall Street Transparency and Accountability Act of 2010)

Title VII: Derivatives (Wall Street Transparency and Accountability Act of 2010) Title VII: Derivatives (Wall Street Transparency and Accountability Act of 2010) Summary: Regulates the previously unregulated, over-the-counter (OTC) derivatives market Requires registration of swap dealers,

More information

Supporting Statement for the. (Proprietary Trading and Certain Interests in and Relationships with Covered Funds) (Reg VV; OMB No.

Supporting Statement for the. (Proprietary Trading and Certain Interests in and Relationships with Covered Funds) (Reg VV; OMB No. Supporting Statement for the Reporting, Recordkeeping, and Disclosure Requirements Associated with Regulation VV (Proprietary Trading and Certain Interests in and Relationships with Covered Funds) (Reg

More information

FINANCIAL SERVICES FLASH REPORT

FINANCIAL SERVICES FLASH REPORT FINANCIAL SERVICES FLASH REPORT Federal Deposit Insurance Corporation Approves Two Living Will Rules September 27, 2011 On September 13, 2011, the Federal Deposit Insurance Corporation (FDIC) approved

More information

STROOCK SPECIAL BULLETIN

STROOCK SPECIAL BULLETIN STROOCK & STROOCK & LAVAN LLP STROOCK SPECIAL BULLETIN Final Regulations Implementing the Volcker Rule: Proprietary Trading March 21, 2014 I. Introduction On December 10, 2013, in connection with Title

More information

Hedge Fund and Private Equity Fund Sponsorship and Investments Under the Proposed Regulations

Hedge Fund and Private Equity Fund Sponsorship and Investments Under the Proposed Regulations The Volcker Rule 1 Hedge Fund and Private Equity Fund Sponsorship and Investments Under the Proposed Regulations The Volcker Rule prohibits a banking entity from sponsoring or investing in a hedge fund

More information

The Volcker Rule. Financial Institutions

The Volcker Rule. Financial Institutions Financial Institutions 1 The Volcker Rule The Volcker Rule 1 prohibits an insured depository institution and its affiliates from: engaging in proprietary trading ; acquiring or retaining any equity, partnership,

More information

Dodd-Frank Act Changes Affecting Private Fund Managers and Other Investment Advisers By Adam Gale and Garrett Lynam

Dodd-Frank Act Changes Affecting Private Fund Managers and Other Investment Advisers By Adam Gale and Garrett Lynam Dodd-Frank Act Changes Affecting Private Fund Managers and Other Investment Advisers By Adam Gale and Garrett Lynam I. Introduction The Dodd-Frank Wall Street Reform and Consumer Protection Act ( Dodd-Frank

More information

Is Your Company Vulnerable to a Rogue Trader?

Is Your Company Vulnerable to a Rogue Trader? Is Your Company Vulnerable to a Rogue Trader? Financial instruments are powerful tools utilized by traders to manage market risk. However, things can easily go wrong when transactions are managed inappropriately,

More information

The Volcker Rule Seeking to Shield Banks Customers

The Volcker Rule Seeking to Shield Banks Customers The Volcker Rule Seeking to Shield Banks Customers Today, Wall Street faces a 4.3 billion dollar challenge as it will be forced to implement the Volcker rule, which imposes curbs to prevent a financial

More information

Ropes & Gray Attorneys Discuss the Impact on Private Fund Managers of Final Regulations Under the Volcker Rule

Ropes & Gray Attorneys Discuss the Impact on Private Fund Managers of Final Regulations Under the Volcker Rule Vol. 7, No. 10 March 13, 2014 VOLCKER RULE Ropes & Gray Attorneys Discuss the Impact on Private Fund Managers of Final Regulations Under the Volcker Rule By Vincent Pitaro On December 10, 2013, federal

More information

The Volcker Rule: Overview and Compliance Requirements

The Volcker Rule: Overview and Compliance Requirements The Volcker Rule: Overview and Compliance Requirements Updated - January 2014 AUTHORS Andrew Olmem Partner Financial Services; Legislative and Government Affairs 202.344.4717 Scott Gluck Counsel Legislative

More information

Final Regulation Implementing the Volcker Rule

Final Regulation Implementing the Volcker Rule Legal Report Final Regulation Implementing the Volcker Rule The US federal financial regulators recently approved the much-anticipated joint final regulation implementing the Volcker Rule, a key element

More information

CONTENTS OF COMPLIANCE PROGRAM MINIMUM REQUIREMENTS Written polices and procedures reasonably designed to document, describe, monitor, and limit all

CONTENTS OF COMPLIANCE PROGRAM MINIMUM REQUIREMENTS Written polices and procedures reasonably designed to document, describe, monitor, and limit all PROGRAM REQUIREMENT Each banking entity must develop and provide for the continued administration of a compliance program reasonably designed to ensure and monitor compliance with the prohibitions and

More information

The Volcker Rule Prohibition on Proprietary Trading: Considerations for Broker-Dealer Affiliates of Foreign Banking Organizations

The Volcker Rule Prohibition on Proprietary Trading: Considerations for Broker-Dealer Affiliates of Foreign Banking Organizations Client Alert January 9, 2014 The Volcker Rule Prohibition on Proprietary Trading: Considerations for Broker-Dealer Affiliates of Foreign Banking Organizations The Volcker Rule imposes significant restrictions

More information

TESTIMONY OF MARK P. WETJEN ACTING CHAIRMAN, COMMODITY FUTURES TRADING COMMISSION BEFORE THE U.S. HOUSE COMMITTEE ON FINANCIAL SERVICES WASHINGTON, DC

TESTIMONY OF MARK P. WETJEN ACTING CHAIRMAN, COMMODITY FUTURES TRADING COMMISSION BEFORE THE U.S. HOUSE COMMITTEE ON FINANCIAL SERVICES WASHINGTON, DC TESTIMONY OF MARK P. WETJEN ACTING CHAIRMAN, COMMODITY FUTURES TRADING COMMISSION BEFORE THE U.S. HOUSE COMMITTEE ON FINANCIAL SERVICES WASHINGTON, DC February 5, 2014 Good morning Chairman Hensarling,

More information

Regulatory Practice Letter

Regulatory Practice Letter Financial Services Regulatory Practice Regulatory Practice Letter RPL Number 10-13 ADVISORY Dodd-Frank Act: Regulation of Over-the-Counter Derivatives (Title VII) Executive Summary On July 21, 2010, the

More information

Order Approving Extension of Conformance Period Under Section 13 of the Bank Holding Company Act

Order Approving Extension of Conformance Period Under Section 13 of the Bank Holding Company Act Order Approving Extension of Conformance Period Under Section 13 of the Bank Holding Company Act Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act added a new section 13 to the

More information

Views on Regulatory Reform from the Financial Services Industry

Views on Regulatory Reform from the Financial Services Industry Views on Regulatory Reform from the Financial Services Industry Survey highlights concerns of U.K. and U.S. executives over costs and benefits of regulatory reform initiatives In the third quarter of 2010,

More information

Insights Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates

Insights Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates Insights Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates 1.16.14 If you have any questions regarding the matters discussed in this memorandum, please contact one of the attorneys listed on Page 24

More information

Private Fund Investment Advisers

Private Fund Investment Advisers Financial Institutions 1 Private Fund Investment Advisers Title IV of the Dodd-Frank Act provides for a number of changes to the regulatory regime governing investment advisers and private funds. Among

More information

FINANCIAL SERVICES FLASH REPORT

FINANCIAL SERVICES FLASH REPORT FINANCIAL SERVICES FLASH REPORT OCC Finalizes Its Heightened Standards for Large Financial Institutions September 15, 2014 Transforming Heightened Expectations to Minimum Standards On September 2, 2014,

More information

THE VOLCKER RULE BAN ON PROP TRADING: A STEP CLOSER TO REALITY

THE VOLCKER RULE BAN ON PROP TRADING: A STEP CLOSER TO REALITY Financial Services POINT OF VIEW OCTOBER 2011 THE VOLCKER RULE BAN ON PROP TRADING: A STEP CLOSER TO REALITY AUTHORS John Lester, Partner Dylan Walsh, Senior Engagement Manager INTRODUCTION The Volcker

More information

Metropolitan Life Insurance Company 10 Park Avenue, Morristown, NJ 07962. February 8, 2012. By electronic submission

Metropolitan Life Insurance Company 10 Park Avenue, Morristown, NJ 07962. February 8, 2012. By electronic submission Metropolitan Life Insurance Company 10 Park Avenue, Morristown, NJ 07962 By electronic submission Board of Governors of the Federal Reserve 20th Street & Constitution Avenue, N.W. Washington, DC 20551

More information

Commodity Futures Trading Commission Office of Public Affairs Three Lafayette Centre 1155 21st Street, NW Washington, DC 20581 www.cftc.

Commodity Futures Trading Commission Office of Public Affairs Three Lafayette Centre 1155 21st Street, NW Washington, DC 20581 www.cftc. Commodity Futures Trading Commission Office of Public Affairs Three Lafayette Centre 1155 21st Street, NW Washington, DC 20581 www.cftc.gov Final Rules Regarding Further Defining Swap Dealer, Major Swap

More information

The Dodd-Frank Wall Street Reform and Consumer Protection Act: Impact, Issues and Concerns in Implementing the Volcker Rule

The Dodd-Frank Wall Street Reform and Consumer Protection Act: Impact, Issues and Concerns in Implementing the Volcker Rule July 2010 The Dodd-Frank Wall Street Reform and Consumer Protection Act: Impact, Issues and Concerns in Implementing the Volcker Rule BY KEVIN L. PETRASIC Introduction The Dodd-Frank Wall Street Reform

More information

The Bank Holding Company Act is amended by adding the following new sections:

The Bank Holding Company Act is amended by adding the following new sections: 1 1 1 1 1 1 1 1 0 1 0 1 0 The Bank Holding Company Act is amended by adding the following new sections: SEC. 1. PROHIBITIONS ON PROPRIETARY TRADING AND CERTAIN RELATIONSHIPS WITH HEDGE FUNDS AND PRIVATE

More information

Derivatives. Capital Markets

Derivatives. Capital Markets Capital Markets 1 Derivatives (This is a summary of this topic. For more in-depth information, see Regulation of Over-the-Counter Derivatives Under the Dodd-Frank Wall Street Reform and Consumer Protection

More information

Dodd-Frank Act Is it really significant?

Dodd-Frank Act Is it really significant? FINANCIAL SERvICES Dodd-Frank Act Is it really significant? Impact of US Regulation on Foreign Investment Managers and Funds May 2011 kpmg.com With as many as 11 federal regulatory agencies required to

More information

STUDY & RECOMMENDATIONS ON PROHIBITIONS ON PROPRIETARY TRADING & CERTAIN RELATIONSHIPS WITH HEDGE FUNDS & PRIVATE EQUITY FUNDS

STUDY & RECOMMENDATIONS ON PROHIBITIONS ON PROPRIETARY TRADING & CERTAIN RELATIONSHIPS WITH HEDGE FUNDS & PRIVATE EQUITY FUNDS STUDY & RECOMMENDATIONS ON PROHIBITIONS ON PROPRIETARY TRADING & CERTAIN RELATIONSHIPS WITH HEDGE FUNDS & PRIVATE EQUITY FUNDS FINANCIAL STABILITY OVERSIGHT COUNCIL Completed pursuant to section 619 of

More information

Volcker Rule Interim Examination Procedures

Volcker Rule Interim Examination Procedures Office of the Comptroller of the Currency June 2014 Contents Volcker Rule Interim Examination Procedures...1 Background... 1 General Procedures... 2 Proprietary Trading... 7 Covered Funds... 14 Conclusions...

More information

Dodd-Frank Wall Street Reform and Consumer Protection Act: Implications for Derivatives

Dodd-Frank Wall Street Reform and Consumer Protection Act: Implications for Derivatives DERIVATIVES AND ASSET MANAGEMENT CLIENT PUBLICATION July 2010... Dodd-Frank Wall Street Reform and Consumer Protection Act: Implications for Derivatives... Introduction The Dodd-Frank Wall Street Reform

More information

Understanding the Volcker Rule: Covered Funds and Proprietary Trading Prohibitions. Chadbourne & Parke LLP agale@chadbourne.com

Understanding the Volcker Rule: Covered Funds and Proprietary Trading Prohibitions. Chadbourne & Parke LLP agale@chadbourne.com Understanding the Volcker Rule: Covered Funds and Proprietary Trading Prohibitions Adam Gale Chadbourne & Parke LLP agale@chadbourne.com (212) 408 5196 1 Presenter Adam Gale Adam Gale, Counsel lin the

More information

15 February 2012. Elizabeth M. Murphy Secretary Securities and Exchange Commission 100 F Street, NE Washington, DC 20549-1090

15 February 2012. Elizabeth M. Murphy Secretary Securities and Exchange Commission 100 F Street, NE Washington, DC 20549-1090 Elizabeth M. Murphy Secretary Securities and Exchange Commission 100 F Street, NE Washington, DC 20549-1090 Re: Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships

More information

GAO PROPRIETARY TRADING. Regulators Will Need More Comprehensive Information to Fully Monitor Compliance with New Restrictions When Implemented

GAO PROPRIETARY TRADING. Regulators Will Need More Comprehensive Information to Fully Monitor Compliance with New Restrictions When Implemented GAO United States Government Accountability Office Report to Congressional Committees July 2011 PROPRIETARY TRADING Regulators Will Need More Comprehensive Information to Fully Monitor Compliance with

More information

A User s Guide to The Volcker Rule February 2014

A User s Guide to The Volcker Rule February 2014 2014 Morrison & Foerster LLP All Rights Reserved mofo.com Last updated Feb. 18, 2014 A User s Guide to The Volcker Rule February 2014 Table of Contents Summary...3 SUBPART B Proprietary Trading...5 SUBPART

More information

U.S. COMMODITY FUTURES TRADING COMMISSION

U.S. COMMODITY FUTURES TRADING COMMISSION U.S. COMMODITY FUTURES TRADING COMMISSION Three Lafayette Centre 1155 21st Street, NW, Washington, DC 20581 Telephone: (202) 418-5000 Facsimile: (202) 418-5521 www.cftc.gov Division of Swap Dealer and

More information

The Volcker Rule compliance monitoring program

The Volcker Rule compliance monitoring program The Volcker Rule compliance monitoring program Contents Introduction 1 Three types of compliance programs 2 Standard vs. enhanced compliance programs 3 Timing considerations 5 Roles and responsibilities

More information

The Volcker Rule s Market Making Exemption

The Volcker Rule s Market Making Exemption 556 REVIEW OF BANKING & FINANCIAL LAW Vol. 31 VIII. The Volcker Rule s Market Making Exemption A. Introduction The stated objectives of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( Dodd-Frank

More information

The Volcker Rule and Private Funds: Final Regulations Are Out

The Volcker Rule and Private Funds: Final Regulations Are Out The Volcker Rule and Private Funds: Final Regulations Are Out December 16, 2013 On December 10, the five federal agencies responsible for writing regulations implementing the Volcker Rule (the Agencies

More information

Client Alert July 21, 2010

Client Alert July 21, 2010 Corporate & Securities North America Client Alert July 21, 2010 For additional information, please see our Dodd-Frank Wall Street Reform And Consumer Protection Act website at http://www.bakermckenzie.com/fin

More information

BANCODeMEXICO. Ref. ACC/2012C-011 February 14, 2012

BANCODeMEXICO. Ref. ACC/2012C-011 February 14, 2012 BANCODeMEXICO GOBERNADOR Ben Bernanke Chairman of the Federal Reserve Board of Governors of the Federal Reserve System 20 th Street and Constitution Avenue, NW Washington, D.C. 20551 The United States

More information

Regulatory Compliance for Energy and Commodity Companies

Regulatory Compliance for Energy and Commodity Companies TRIPLE POINT SOLUTION BRIEF Regulatory Compliance for Energy and Commodity Companies COMMODITY XL MEET REQUIREMENTS FOR DODD-FRANK AND EUROPEAN UNION LEGISLATION TRIPLE POINT TECHNOLOGY TPT.COM MARKET

More information

Guidance for companies, trusts and partnerships on completing a self-certification form

Guidance for companies, trusts and partnerships on completing a self-certification form Guidance for companies, trusts and partnerships on completing a self-certification form In order to combat tax evasion by both individuals and businesses, the UK and many other countries have entered into

More information

Re: Interpretation of Section 2(h)(7)(C)(iii) of the Commodity Exchange Act Captive Finance Companies

Re: Interpretation of Section 2(h)(7)(C)(iii) of the Commodity Exchange Act Captive Finance Companies U.S. COMMODITY FUTURES TRADING COMMISSION Three Lafayette Centre 1155 21st Street, NW, Washington, DC 20581 Telephone: (202) 418-5000 Facsimile: (202) 418-5521 www.cftc.gov Division of Clearing and Risk

More information

STATE STREET GLOBAL ADVISORS.

STATE STREET GLOBAL ADVISORS. STATE STREET GLOBAL ADVISORS. State Street Financial Center One Lincoln Street Boston, MA 02111-2900. www.ssga.com, November 9, 2012. Ms. Elizabeth M. Murphy Securities and Exchange Commission 100 F Street,

More information

Market Linked Certificates of Deposit

Market Linked Certificates of Deposit Market Linked Certificates of Deposit This material was prepared by Wells Fargo Securities, LLC, a registered brokerdealer and separate non-bank affiliate of Wells Fargo & Company. This material is not

More information

1. De Minimis Exemption from the Definition of Swap Dealer

1. De Minimis Exemption from the Definition of Swap Dealer David A. Stawick Secretary Commodity Futures Trading Commission Three Lafayette Center 1155 21st Street, NW Washington, DC 20581 Elizabeth M. Murphy Secretary Securities and Exchange Commission 100 F Street,

More information

Comments on the U.S. Volcker Rule Proposed by Commodity Futures Trading Commission

Comments on the U.S. Volcker Rule Proposed by Commodity Futures Trading Commission March 22, 2012 Comments on the U.S. Volcker Rule Proposed by Commodity Futures Trading Commission Japanese Bankers Association The Japanese Bankers Association (JBA) is an industry association of 142 Japanese

More information

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Date: April 19, 2016 To: Board of Governors From: Staff 1 Subject: Re-proposed joint rules implementing the incentive compensation requirements of the Dodd-Frank

More information

The Volcker Rule: Prohibition on Sponsorship and Investment in Covered Funds

The Volcker Rule: Prohibition on Sponsorship and Investment in Covered Funds 2014 Morrison & Foerster LLP All Rights Reserved mofo.com The Volcker Rule: Prohibition on Sponsorship and Investment in Covered Funds Jay G. Baris JBaris@mofo.com Henry M. Fields HFields@mofo.com February

More information

Most registered investment advisers have now been

Most registered investment advisers have now been By Nabil Sabki and Nadia Sager Private funds are issuers that rely on the Section 3(c)(1) or 3(c)(7) exemptions from registration as investment companies under the Investment Company Act of 1940. Private

More information

TITLE VIII PAYMENT, CLEARING AND SETTLEMENT SUPERVISION

TITLE VIII PAYMENT, CLEARING AND SETTLEMENT SUPERVISION 1 0 1 TITLE VIII PAYMENT, CLEARING AND SETTLEMENT SUPERVISION SEC. 01. SHORT TITLE. This title may be cited as the Payment, Clearing, and Settlement Supervision Act of 00. SEC. 0. FINDINGS AND PURPOSES.

More information

Application for Corporate Membership CME Rule 106.H. Trading Member Firm Agreement for Membership

Application for Corporate Membership CME Rule 106.H. Trading Member Firm Agreement for Membership Application for Corporate Membership Agreement for Membership 1. Applicant 2. Indicate the Division of membership which will be used for the applicant s membership privileges. CME Division IMM Division

More information

PROTIVITI FLASH REPORT

PROTIVITI FLASH REPORT PROTIVITI FLASH REPORT HHS Announces Plans to Reconsider Implementation Timeline for U.S. Healthcare Industry s Transition to ICD-10 February 17, 2012 On Wednesday, February 15, the Department of Health

More information

Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates Dodd-Frank Rulemaking: Volcker Rule and SIFI Proposals

Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates Dodd-Frank Rulemaking: Volcker Rule and SIFI Proposals Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates Dodd-Frank Rulemaking: Volcker Rule and SIFI Proposals Commentary and Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates This collection of commentaries

More information

Managing Regulatory Compliance and AML Risk in a Virtual Currency World

Managing Regulatory Compliance and AML Risk in a Virtual Currency World Managing Regulatory Compliance and AML Risk in a Virtual Currency World Issue When you first think of virtual currency (also known as digital currency), the video gaming industry may be what first comes

More information

The Final Volcker Rule and Its Extraterritorial Consequences for Non-U.S. Banks

The Final Volcker Rule and Its Extraterritorial Consequences for Non-U.S. Banks December 20, 2013 The Final Volcker Rule and Its Extraterritorial Consequences for Non-U.S. Banks Introduction Last week, the Board of Governors of the Federal Reserve System (the Fed ) and four other

More information

from the Crisis Regulators Address Continuing Uncertainty Lessons Learned

from the Crisis Regulators Address Continuing Uncertainty Lessons Learned REGULATORY ISSUES Regulators Address Continuing Uncertainty and Lessons Learned from the Crisis Continuing uncertainty and lessons learned from the recent crisis were addressed by senior financial regulators

More information

The Volcker Rule: Implementation and Impact. Charles K. Whitehead Professor of Law

The Volcker Rule: Implementation and Impact. Charles K. Whitehead Professor of Law The Volcker Rule: Implementation and Impact Charles K. Whitehead Professor of Law The Volcker Rule Prohibits a banking entity from engaging in (short-term) proprietary trading, or Holding an ownership

More information

MARATHON OIL CORPORATION POLICY STATEMENT Section: Executive

MARATHON OIL CORPORATION POLICY STATEMENT Section: Executive GENERAL PURPOSE To establish the procedures for pre-approval of all audit, audit-related, tax and permissible non-audit services provided by Marathon Oil Corporation's (the "Corporation") independent auditor.

More information

OTC Clearing, Volcker Rule and Transaction Strategy:

OTC Clearing, Volcker Rule and Transaction Strategy: OTC Clearing, Volcker Rule and Transaction Strategy: Changing market dynamics & liquidity for Corporate Treasurers Presented by Larry Tabb (Founder & CEO) PRMIA Global Risk Conference New York, NY May

More information

Volcker Rule: Compliance Program, Reporting and Recordkeeping Requirements

Volcker Rule: Compliance Program, Reporting and Recordkeeping Requirements Volcker Rule: Compliance Program, Reporting and Recordkeeping Requirements Jan. 23, 2014 1 Volcker Rule: Compliance Program, Reporting and Recordkeeping Requirements On December 10, 2013, the U.S. federal

More information

J.P. Morgan Securities LLC CFTC Supplemental Disclosures

J.P. Morgan Securities LLC CFTC Supplemental Disclosures CFTC Supplemental Disclosures February 2015 Assets and Capital Allocation as of February 28, 2015 Asset Allocation Capital Employed Financing (Resales, Borrows) 50.9% 2.0% Inventory by Business Line Public

More information

SWAP DEALER AND SECURITY-BASED SWAP DEALER DEFINED

SWAP DEALER AND SECURITY-BASED SWAP DEALER DEFINED CLIENT MEMORANDUM SWAP DEALER AND SECURITY-BASED SWAP DEALER DEFINED The Securities and Exchange Commission and Commodity Futures Trading Commission jointly adopted final rules 1 under Title VII of the

More information

Re: Notice and Request for Comments - Determinations of Foreign Exchange Swaps and Forwards (75 Fed. Reg. 66829)

Re: Notice and Request for Comments - Determinations of Foreign Exchange Swaps and Forwards (75 Fed. Reg. 66829) ISDA International Swaps and Derivatives Association, Inc. 360 Madison Avenue, 16th Floor New York, NY 10017 United States of America Telephone: 1 (212) 901-6000 Facsimile: 1 (212) 901-6001 email: isda@isda.org

More information

ADVISORY Dodd-Frank Act

ADVISORY Dodd-Frank Act ADVISORY Dodd-Frank Act July 21, 2010 ADVISERS TO PRIVATE INVESTMENT FUNDS On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act). The

More information

SHAY FINANCIAL SERVICES, INC. Miami, Florida (S.E.C. I.D. No. 8-043981)

SHAY FINANCIAL SERVICES, INC. Miami, Florida (S.E.C. I.D. No. 8-043981) Miami, Florida (S.E.C. I.D. No. 8-043981) STATEMENT OF FINANCIAL CONDITION and INDEPENDENT AUDITOR S REPORT Miami, Florida STATEMENT OF FINANCIAL CONDITION CONTENTS INDEPENDENT AUDITORS REPORT... 1 STATEMENT

More information

U.S. Agencies Approve Final Volcker Rule, Detailing Prohibitions and Compliance Regimes Applicable to Banking Entities Worldwide

U.S. Agencies Approve Final Volcker Rule, Detailing Prohibitions and Compliance Regimes Applicable to Banking Entities Worldwide U.S. Agencies Approve Final, Detailing Prohibitions and Compliance Regimes Applicable to Banking Entities Worldwide EXECUTIVE SUMMARY On December 10, 2013, the Board of Governors of the Federal Reserve

More information

Registration of Municipal Advisors [Release No. 34-63576; File No. S7-45-10]

Registration of Municipal Advisors [Release No. 34-63576; File No. S7-45-10] 1001 PENNSYLVANIA AVE., NW SUITE 500 SOUTH WASHINGTON, DC 20004 TEL 202-289-4322 FAX 202-628-2507 E-Mail rich@fsround.org www.fsround.org February 22, 2011 RICHARD M. WHITING EXECUTIVE DIRECTOR AND GENERAL

More information

Part 2A of Form ADV: Firm Brochure

Part 2A of Form ADV: Firm Brochure Part 2A of Form ADV: Firm Brochure Item 1 Cover Page A. VL Capital Management LLC 55 West Church Street Orlando, FL 32801 Mailing Address: P.O. Box 1493 Orlando, FL 32802 Phone: (407) 412-6298 Effective

More information

Interactive Brokers Group Strength and Security

Interactive Brokers Group Strength and Security Interactive Brokers Group Strength and Security When placing your money with a broker, you need to make sure your broker is secure and can endure through good and bad times. The financial statements of

More information

T he restrictions of Sections 23A and Regulation W

T he restrictions of Sections 23A and Regulation W BNA s Banking Report Reproduced with permission from BNA s Banking Report, 100 BBR 109, 1/15/13, 01/15/2013. Copyright 2013 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com REGULATION

More information

Honest Advisors, LLC 600 Congress Ave., 14 th Floor Austin, TX 78701. www.honestdollar.com. Wrap Fee Program Brochure. As of: May 1, 2015

Honest Advisors, LLC 600 Congress Ave., 14 th Floor Austin, TX 78701. www.honestdollar.com. Wrap Fee Program Brochure. As of: May 1, 2015 Honest Advisors, LLC 600 Congress Ave., 14 th Floor Austin, TX 78701 www.honestdollar.com Wrap Fee Program Brochure As of: May 1, 2015 This wrap fee program brochure provides information about the qualifications

More information

Americans for Financial Reform 1629 K St NW, 10th Floor, Washington, DC, 20006 202.466.1885

Americans for Financial Reform 1629 K St NW, 10th Floor, Washington, DC, 20006 202.466.1885 Americans for Financial Reform 1629 K St NW, 10th Floor, Washington, DC, 20006 202.466.1885 Analysis of Issues in HR 2827 / S 3620 The financial crisis led to the revelation of massive financial abuses

More information

Client Update Compensation Practices at Financial Institutions Targeted: Proposed Incentive Compensation Rules Aim to Curb Excessive Risk-Taking

Client Update Compensation Practices at Financial Institutions Targeted: Proposed Incentive Compensation Rules Aim to Curb Excessive Risk-Taking 1 Client Update Compensation Practices at Financial Institutions Targeted: Proposed Incentive Compensation Rules Aim to Curb Excessive Risk-Taking NEW YORK Michael P. Harrell mpharrell@debevoise.com Beth

More information

Dodd-Frank for Foreign Financial Institutions and Publicly Traded Companies in the U.S.: An Update

Dodd-Frank for Foreign Financial Institutions and Publicly Traded Companies in the U.S.: An Update Dodd-Frank for Foreign Financial Institutions and Publicly The Dodd-Frank Wall Street Reform and Consumer Protection Act ( Dodd-Frank ), which was signed into law by President Obama on July 21, 2010, launched

More information

Final Volcker Rule Regulations: Effects on Non-U.S. Entities

Final Volcker Rule Regulations: Effects on Non-U.S. Entities Table of Contents Final Volcker Rule Regulations: Effects on Non-U.S. Entities... 1 I. Application of the Volcker Rule to Non-U.S. Entities... 2 II. Volcker Rule Requirements Generally... 3 III. Proprietary

More information

PROTIVITI FLASH REPORT

PROTIVITI FLASH REPORT PROTIVITI FLASH REPORT California Law Requires Companies to Disclose Efforts to Ensure Supply Chains Are Free of Slavery and Human Trafficking February 6, 2012 The California Transparency in Supply Chains

More information

Commodity Futures Trading Commission Office of Public Affairs Three Lafayette Centre 1155 21st Street, NW Washington, DC 20581 www.cftc.

Commodity Futures Trading Commission Office of Public Affairs Three Lafayette Centre 1155 21st Street, NW Washington, DC 20581 www.cftc. Commodity Futures Trading Commission Office of Public Affairs Three Lafayette Centre 1155 21st Street, NW Washington, DC 20581 www.cftc.gov Proposed Rules and Interpretive Guidance i) Further Defining

More information

The Volcker Rule. Implications for the FX Market

The Volcker Rule. Implications for the FX Market The Volcker Rule Implications for the FX Market Ulrich Leuchtmann Head of FX Research June 2012 The Volcker rule General idea: a new version of Glass-Steagall Glass-Steagall Bank Volcker Rule Bank Investment

More information

Definitions Contained in Title VII of Dodd-Frank Wall Street Reform and Consumer Protection Act

Definitions Contained in Title VII of Dodd-Frank Wall Street Reform and Consumer Protection Act SECURITIES AND EXCHANGE COMMISSION; COMMODITY FUTURES TRADING COMMISSION RIN 3235-AK65 RELEASE NO. 34-62717; File No. S7-16-10 Definitions Contained in Title VII of Dodd-Frank Wall Street Reform and Consumer

More information

One Hundred Eleventh Congress of the United States of America

One Hundred Eleventh Congress of the United States of America H. R. 4173 One Hundred Eleventh Congress of the United States of America AT THE SECOND SESSION Begun and held at the City of Washington on Tuesday, the fifth day of January, two thousand and ten An Act

More information

Commodity Futures Trading Commission Office of Public Affairs Three Lafayette Centre 1155 21st Street, NW Washington, DC 20581 www.cftc.

Commodity Futures Trading Commission Office of Public Affairs Three Lafayette Centre 1155 21st Street, NW Washington, DC 20581 www.cftc. Commodity Futures Trading Commission Office of Public Affairs Three Lafayette Centre 1155 21st Street, NW Washington, DC 20581 www.cftc.gov Q & A Final Rules and Interpretations i) Further Defining Swap,

More information

SUBTITLE F IMPROVEMENTS TO THE ASSET-BACKED SECURITIZATION PROCESS. This Subtitle may be cited as the Credit Risk Retention Act of 2009.

SUBTITLE F IMPROVEMENTS TO THE ASSET-BACKED SECURITIZATION PROCESS. This Subtitle may be cited as the Credit Risk Retention Act of 2009. SUBTITLE F IMPROVEMENTS TO THE ASSET-BACKED SECURITIZATION PROCESS SEC. 1501. SHORT TITLE. This Subtitle may be cited as the Credit Risk Retention Act of 2009. SEC. 1502. CREDIT RISK RETENTION. The Securities

More information

The Foreign Account Tax Compliance Act (FATCA)

The Foreign Account Tax Compliance Act (FATCA) The Foreign Account Tax Compliance Act (FATCA) I. OVERVIEW A. What is FATCA? FATCA, as it is colloquially known, refers to Chapter 4 of the US Internal Revenue Code, which was enacted by the Hiring Incentives

More information

SIFMA FSOC Study Comment Letter

SIFMA FSOC Study Comment Letter Volcker Rule Materials Proprietary Trading #52356184v1 SIFMA FSOC Study Comment Letter By electronic submission to www.regulations.gov Financial Stability Oversight Council c/o United States Department

More information

SEC FLASH REPORT. SEC Issues Rules for Implementing the Whistleblower Provisions of Section 21F of the Securities Exchange Act of 1934

SEC FLASH REPORT. SEC Issues Rules for Implementing the Whistleblower Provisions of Section 21F of the Securities Exchange Act of 1934 SEC FLASH REPORT SEC Issues Rules for Implementing the Whistleblower Provisions of Section 21F of the Securities Exchange Act of 1934 May 25, 2011 Today, the Securities and Exchange Commission (SEC) voted

More information

York Business Associates, L.L.C. (d/b/a TransAct Futures) and Subsidiary FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT.

York Business Associates, L.L.C. (d/b/a TransAct Futures) and Subsidiary FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT. York Business Associates, L.L.C. (d/b/a TransAct Futures) and Subsidiary FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT December 31, 2014 CONSOLIDATED STATEMENT OF FINANCIAL CONDITION December

More information

NO-ACTION RELIEF FOR COMPRESSION EXERCISE SWAPS AND COMPO EQUITY SWAPS COMPRESSION EXERCISE SWAPS. De Minimis Exception Generally

NO-ACTION RELIEF FOR COMPRESSION EXERCISE SWAPS AND COMPO EQUITY SWAPS COMPRESSION EXERCISE SWAPS. De Minimis Exception Generally CLIENT UPDATE NO-ACTION RELIEF FOR COMPRESSION EXERCISE SWAPS AND COMPO EQUITY SWAPS NEW YORK Byungkwon Lim blim@debevoise.com Emilie T. Hsu ehsu@debevoise.com Aaron J. Levy ajlevy@debevoise.com On December

More information

Washington Update. Payments News from our Nation s Capital. October 2014. Contents. CFPB Finalizes Two Rules Related to International Money Transfers

Washington Update. Payments News from our Nation s Capital. October 2014. Contents. CFPB Finalizes Two Rules Related to International Money Transfers Washington Update Payments News from our Nation s Capital October 2014 Contents CFPB Finalizes Two Rules Related to International Money Transfers $25 per Issue $200 Annual Subscription Authors: Craig Saperstein

More information

FINANCIAL STATEMENTS 2013

FINANCIAL STATEMENTS 2013 452/green [A subsidiary of SaskPower] NorthPoint Energy Solutions Inc. FINANCIAL STATEMENTS 2013 711/red Report of Management The financial statements of NorthPoint Energy Solutions Inc. (NorthPoint)

More information

Financial Institutions Regulation Group Client Alert:

Financial Institutions Regulation Group Client Alert: December 17, 2013 CONTACT Wayne Aaron Partner +1-212-530-5284 waaron@milbank.com Douglas Landy Partner +1-212-530-5234 dlandy@milbank.com John Williams Partner +1-212-530-5537 jwilliams@milbank.com Financial

More information

Starting a Forex Fund

Starting a Forex Fund Starting a Forex Fund By Hannah M. Terhune, Esquire 2008, Capital Management Services Group Market conditions have never been better for setting up a forex fund. The number of forex funds and corresponding

More information

USAA @ February 13, 2012

USAA @ February 13, 2012 SÇ ^ USAA @ 9800 Fredericksburg Road ^nt0n ' 0, Texas 7^288 February 13, 2012 Office of the Comptroller of the Currency 250 E Street, SW Mail Stop 2-3 Washington, DC 20219 regs. comment s@occ. trecis.gov

More information

Implementing Compliance Program under the Volcker Rule A practitioners perspective. - Praveen Daga

Implementing Compliance Program under the Volcker Rule A practitioners perspective. - Praveen Daga white paper Implementing Compliance Program under the Volcker Rule A practitioners perspective - Praveen Daga On 10 December 2013, five federal agencies viz., the Federal Deposit Insurance Corporation

More information