What does the Volcker Rule prohibit?

What does the Volcker Rule prohibit?

The Volcker rule generally prohibits banking entities from engaging in proprietary trading or investing in or sponsoring hedge funds or private equity funds.

Who is subject to the Volcker Rule?

The Volcker Rule does apply to every foreign entity that directly or indirectly maintains a bank branch or agency in the United States, or controls a commercial lending company.

What is Sotus Volcker Rule?

The Volcker Rule permits certain foreign banking entities to engage in proprietary trading activities that occur solely outside of the US. The 2013 Final Rule included several conditions to use the TOTUS exemption.

Is the Volcker Rule still in effect?

The Final Amendments, along with the Final Rule, that will be effective October 1, 2020, will ease prior restrictions on banking entities by adding four new types of funds to the Volcker Rule’s list of exclusions.

Does the Volcker Rule apply to broker dealers?

While such trading practices may continue for trades effected on an agency basis, the Volcker Rule prohibits FBOs from effecting such trades on a principal basis through their affiliated U.S. broker-dealers.

Is the Volcker Rule good?

The Volcker rule partially solves these problems by restricting the amount of principal trading, and some would argue the scale of market making activities, by large banks (and SIFIs). This will lessen the liquidity impact of the systemic risk of these institutions on the broader financial markets and real economy.

What does Sotus stand for in finance?

many non-US banks rely on the “Solely Outside the United. States” (SOTUS) exemption from the Volcker Rule’s restrictions. on both proprietary trading and covered funds. Proposed.

What is Totus exemption?

Exemption for Trading Outside the United States. The 2013 Rule provides an exemption from the proprietary trading restrictions for trading by a foreign banking entity outside the United States (the so-called “TOTUS exemption”).

What is a Volcker moment?

The term Volcker moment refers to the anti-inflation initiative led by former Federal Reserve Chairman Paul Volcker. When inflation was rampant in the late 1970s, Paul Volcker made the difficult decision to raise interest rates dramatically in an attempt to reign-in inflation.

What Scotus means?

Supreme Court of the United States
Supreme Court of the United States.

What funds are excluded from Volcker Rule?

Sources are generally happy with the changes to current covered fuRd exclusions (foreign public funds, public welfare funds, and loan securitisations), such as the clarification for loan securitisation vehicles that allows the holding of other assets, including certain debt securities and cash equivalents.

What are covered fund exclusions?

New Covered Fund Exclusions. The Covered Fund Amendments create four new exclusions from the definition of covered fund for: (i) credit funds, (ii) venture capital funds, (iii) family wealth management vehicles; and (iv) customer facilitation vehicles.

What is Volcker disinflation?

The incredible Volcker disinflation☆ The reduction in inflation that occurred in the early 1980s, when the Federal Reserve was headed by Paul Volcker, is arguably the most widely discussed and visible macroeconomic event of the last 50 years of U.S. history.

What does Lotus stand for in government?

LOTUS. Lots Of Trouble, Usually Serious. Governmental » Police. Rate it: LOTUS.

What is a nickname for the Supreme Court?

The nickname of the building is the Marble Palace, because white marble represents the primary material used in the building. According to the Supreme Court’s Web site, $3 million worth of marble was used in its construction.

Can employees invest in covered funds?

The Proposed Rules would allow banking entity employees to invest in their personal capacities in covered funds to which those employees provide advisory and other services; however, such investments may be attributed to the banking entity if it extends credit to the employees for, or otherwise guarantees, the …

What is considered a covered fund under Volcker?

Loosely put, the Rule defines a covered fund as anything not considered an investment company in the Investment Company Act, including private equity and hedge funds, as well as commodity pools with certain exclusions, and funds sponsored by a US banking entity where the affiliate holds ownership interests.