Implementation of the Volcker Rule

SIFMA provides comments to the Board of Governors of the Federal Reserve (Board) on the Board’s request for public comment on a proposed rule to implement the conformance period for entities engaged in prohibited proprietary trading or private equity or hedge fund activities, Docket Number R-1397 and RIN AD 7100-58, new Section 13(c)(1) of the Bank Holding Company Act (Volcker Rule).  The Volcker Rule provides banking entities an initial period of two years following the effective date of the Rule to bring their activities and investments in hedge funds and private equity funds into compliance. The Board has the discretionary authority to provide two types of extensions in addition to the initial conformance period. SIFMA shares it concerns about the Board’s discretion to grant the special extended conformance period for illiquid funds and the discretion’s alignment with the purpose of Section 13(c).