Monday, 22 December 2014
Last updated 9 hours ago
Oct 12 2011 | 6:43am ET
Almost two years in the making, three regulators have offered a first look at what the Volcker rule—barring banks from proprietary trading and strictly limiting their alternative investments—will actually look like.
The Federal Reserve, Federal Deposit Insurance Co. and the Office of the Comptroller of the Currency released the 298-page proposal yesterday. The new rule, set to be considered by the Securities and Exchange Commission today, would in fact bar proprietary trading outright and limit banks to a maximum 3% stake in hedge funds and private equity funds.
The restrictions won't come into effect until June, and aren't final. Indeed, the proposal offers some 400 questions to industry groups—including one that could signal an even tougher approach than that outlined in the proposal.
Currently, the Volcker rule would be softened by a hedging exemption. The regulators have asked for comment as to whether that might "create the potential for abuse."
Many other aspects of the proposed rules still require firmer definitions—including "bank"—that the comment period will assist with.
Critics for the vague proposal could be found on both sides. Some say the rules don't go far enough; others warn that it will drive business to foreign banks and could cut bank profits by a quarter.
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.