The Final Volcker Rule
What does it mean for banking institutions?
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The final Volcker Rule was approved and released by the U.S. regulators on December 10, 2013. The scope of the market making exemption is broader than in the notice of proposed rulemaking, the minimum threshold for metrics reporting has increased, the number of required metrics is reduced and the regulators have provided an extension of the conformance period by one year to July 21, 2015. For foreign banks (and foreign governments), the final rule is less restrictive in several ways, including the scope of permissible foreign banks’ non-U.S. activities and the permissibility (albeit with limitations) of trading in foreign sovereign debt.
But make no mistake – the impact of the rule will be significant. Some requirements have become more stringent, the compliance bar overall has been set high and there is much work to do. This document highlights some key operational considerations for banking organizations’ compliance with the rule requirements.