On 10 June 2014, the Federal Reserve Board, the OCC, the FDIC, the Securities and Exchange Commission ("SEC"), and the Commodity Futures Trading Commission ("CFTC") issued an initial set of six joint FAQs regarding the implementation of the Volcker Rule. The FAQs address the following topics:
- the extent to which the Volcker Rule requirements (including the Tier 1 capital deduction provision for covered fund investments) apply during the conformance period;
- the extent to which the Volcker Rule requirements (including the Tier 1 capital deduction provision for covered fund investments) apply during the conformance period;
- the definition of "trading desk" and, in particular, whether a trading desk can span multiple legal entities;
- the treatment of newly created foreign funds; specifically, confirming that a newly created fund intended to be a foreign public fund will be excluded from the definition of "covered fund" in the same fashion as a newly created fund intended to be a registered investment company under the '40 Act;
- the scope of the phrase "rights or other assets," as found in the loan securitization exemption;
- the trading metrics reporting dates; in particular, confirming that the largest institutions must begin capturing trading metrics on July 1, 2014 (with reporting commencing in August); and
- the scope of the covered fund name-sharing prohibition, including several examples of prohibited name sharing.
The full text of the FAQs is available at:
http://www.federalreserve.gov/bankinforeg/volcker-rule/faq.htm.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
