Volcker Agencies Finalize Covered Fund Amendments

On June 25, the five regulatory agencies responsible for implementing the Volcker Rule approved a final rule that makes significant revisions to the “covered funds” provisions of the current implementing regulations.

The amendments aim to limit the application of the rule to funds activities that the rule was not intended to restrict, including customer-driven activities inside and outside the United States. The final rule made only a few changes to the proposal released in January, including helpful technical fixes, a modest expansion of the public welfare funds exemption and clarification of permitted voting rights for debt securities. Still, the Agencies declined to adopt a number of comments, including related to the definition of the permitted bond bucket for loan securitizations and conditions on some of the new exemptions from Super 23A.

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