The Volcker Rule's Significant Impact on a Foreign Banking Organization's Proprietary Trading Activities

The Volcker Rule's Significant Impact on a Foreign Banking Organization's Proprietary Trading Activities

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This week, the three federal banking agencies and the SEC approved for comment a proposed regulation implementing Section 619 of the Dodd-Frank Act, more generally known as the 'Volcker Rule.' The 298-page proposal has yet to be published in the Federal Register, but the agencies have already agreed to an extended comment period for the proposal "running until January 13, 2012 "given the subject matters significance. Effective July 21, 2012, the Volcker Rule restricts proprietary trading activities and investing in or sponsoring of private equity funds by 'banking entities' "defined by statute to include FDIC-insured depository institutions, bank holding companies, savings and loan holding companies, other entities that control an FDIC-insured depository institution, and foreign banks that are regulated as if they are bank holding companies under the International Banking Act (i.e., foreign banks that have a U.S. branch, referred to as a 'foreign banking organization')

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