On Friday 12 June 2015, two FAQ's were issued which provided further guidance on the treatment of foreign public funds and joint ventures under the Volcker Rule.

The first FAQ applies to funds that are excluded from the definition of "covered fund" pursuant to the foreign (i.e., non-US) public fund exclusion. Banking entities have been concerned that those foreign public funds that are controlled for purposes of the US Bank Holding Company Act (and therefore the Volcker Rule) would also be banking entities themselves and consequently subject to the proprietary trading and covered fund restrictions of the rule.

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The second FAQ appears intended to narrow the exclusion from the definition of "covered fund" for joint ventures. The regulators are concerned that some banking entities may use joint venture exclusion for investment vehicles or otherwise to evade the limitations in the Volcker Rule on investing in covered funds. The FAQ emphasizes that the joint venture exclusion is designed to be used by a banking entity to conduct businesses and operations in conjunction with a limited number of co-venturers and is not intended to cover entities that invest in securities for resale or other disposition.

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The general conformance period for banking entities to bring their activities into compliance with the Volcker Rule is scheduled to end on 21 July 2015. Although there is an extension for certain legacy covered funds, most activities conducted by banking entities are required to conform to the provisions of the Volcker Rule by that date.

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