Federal Reserve Issues Final Rule to Implement Volcker Rule Conformance Period
February 9, 2011
Circular No. 12283

The Federal Reserve Board has announced its approval of a final rule to implement the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that give banking firms a period of time to conform their activities and investments to the prohibitions and restrictions of the so-called Volcker Rule.

The Volcker Rule generally prohibits banking entities from engaging in proprietary trading in securities, derivatives or certain other financial instruments and from investing in, sponsoring or having certain relationships with a hedge fund or private equity fund. The statute generally provides banking entities two years to bring their activities and investments into compliance and allows the Board to extend this conformance period under certain conditions.

The Dodd-Frank Act requires that the Board issue rules implementing the Volcker Rule's conformance period.

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