The Federal Reserve Board, Office of the Comptroller of the Currency, CFTC, FDIC and SEC amended the definition of "insured depository institutions" to exclude from the Volcker Rule firms with consolidated assets equal to or less than $10 billion. The amendments were adopted to conform to the Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA), which modified the definition of "banking entity" to exempt community banks from the Volcker Rule.
To benefit from the exclusion, an insured depository institution (i) must not have more than $10 billion in consolidated assets and (ii) must keep its total consolidated trading assets and liabilities to no more than five percent of its total consolidated assets.
Additionally, the final rule permits hedge funds and private equity funds to share variations in name with a banking entity that acts as an investment adviser to a fund, although the use of the word bank is not permitted.
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