The Volcker Rule, as currently implemented, negatively impacts market liquidity, capital formation and economic growth; has overbroad and burdensome provisions that impinge on traditional banking and asset management activities; is too complex; and is duplicative.

While pure proprietary trading for one’s own account was historically a limited activity for most banks, the ability to trade and take positions in securities has been an essential tool to making markets and ensuring those markets remain liquid. SIFMA does not believe that proprietary trading caused the financial crisis or contributed to the failure of any banking organizations and that the best response to the Volcker Rule’s many problems would be to repeal the statute in favor of the traditional prudential regulatory framework applicable to banks.  In addition, SIFMA believes that the Volcker Rule with its complex regulatory structure has caused diminished liquidity in a number of markets.

SIFMA welcomes the recent proposal by regulators to recalibrate the Volcker Rule’s implementing regulations, as it represents a growing recognition of the unintended negative impact caused by excessive complexity. SIFMA looks forward to reviewing the proposals and sharing our specific recommendations to streamline and simplify the Rule.