The Board of Governors of the Federal Reserve System extended the conformance period for banking entities to: (i) divest ownership in certain legacy investment funds and (ii) terminate relationships with funds that are prohibited under Dodd-Frank Act Section 619, commonly known as the Volcker Rule.
The Board stated that the extension would permit banking entities additional time to divest or conform only legacy investments and relationships made by banking entities prior to December 31, 2013. The Board cautioned that the extension would not apply to proprietary trading activities, which were required to conform to the final rule by July 21, 2015.
During the extended conformance period, banking entities will be expected to make plans well in advance of the end of the extended conformance period regarding how they will conform or divest legacy covered fund investments in an orderly and safe and sound manner. Banking entities will also be expected to take steps to divest covered funds or conform such funds to the statute and final rule. The Board added that it will also continue to consider whether to take action regarding illiquid funds.
The extended conformance period will expire on July 21, 2017.
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