SEC and Other Organizations Propose Changes to Volcker Rule’s “Covered Funds” Restrictions
SEC and Other Organizations Propose Changes to Volcker Rule’s “Covered
February 3, 2020
The SEC and several other government agencies — including the Federal Reserve Board,
CFTC, FDIC, and OCC — have jointly issued a proposed rule, Proposed Revisions to
Prohibitions and Restrictions on Proprietary Trading and Certain Interests in,
and Relationships With, Hedge Funds and Private Equity Funds.
The proposal would modify the Volcker rule’s restrictions that currently prevent
banking entities from investing in or sponsoring hedge funds or private equity funds
(i.e., “covered funds”). Specifically, the proposal “would improve and streamline
the covered funds portion of the rule, address the treatment of certain foreign
funds, and permit banking entities to offer financial services and engage in other
permissible activities that do not raise concerns that the Volcker rule was intended
Comments on the proposal are due by April 1, 2020.