Alternative Investment Management Association Representing the global hedge fund industry
Named after Paul Volcker, former Chairman of the Board of Governors of the Federal Reserve System, The Volcker Rule is contained within Section 619 of the Dodd-Frank Act. The Rule seeks generally to prohibit ‘banking entities’ from conducting ‘proprietary trading’ and from ‘sponsoring’ or acquiring ‘any equity, partnership or other ownership interest’ in a private equity or hedge fund. The Rule was introduced in response to the financial crisis and was meant to become effective on 21 July 2012, subject to a two year ‘Conformance Period’ for the industry. However, the Federal Reserve issued a ruling on 19 April 2012, stating that banks would have two years to bring their activities in line with the Volcker Rule, before regulations would be enforced.
The Rule does not apply with respect to:
FSOC Request for Information Regarding the Implementation of the Prohibitions on Proprietary Trading and Certain Relationships with Hedge Funds and Private Equity Funds required under Section 619 the Dodd-Frank Wall Street Reform and Consumer Protection Act (October 2010)
Response to Proposed Rulemaking - Prohibition and restrictions on proprietary trading and certain interests in, and relationships with, hedge funds and private equity funds, notice of proposed rulemaking (February 2012)
Response to FSOC consultation on the Volcker Rule (November 2010)