“Volcker Rule” Implementation Proposed

On October 11, 2011, the Federal Reserve’s Board of Governors, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation issued a proposed rule implementing the requirements of new Section 13 of the Bank Holding Company Act of 1956, the so-called “Volcker Rule”.

The proposed rule generally prohibits a “banking entity” from:

1. engaging in proprietary trading for its own account,
2. acquiring or retaining an ownership interest in or sponsoring a “covered fund”, and
3. entering into certain relationships with a “covered fund”,

in each case, subject to various exceptions.

Comments on the proposed rule are due by January 13, 2012.