Volcker Rule Final Regulations: Proprietary Trading Overview

Annette Nazareth is a partner in the Financial Institutions Group at Davis Polk & Wardwell LLP, and a former commissioner at the U.S. Securities and Exchange Commission. The following post is based on the overview of a Davis Polk client memorandum; the complete publication, including flowcharts, diagrams, tables, and timelines to illustrate key aspects of the Volcker Rule, is available here.

These Davis Polk flowcharts are designed to assist banking entities in identifying permissible and impermissible proprietary trading activities under the final regulations implementing the Volcker Rule, issued by the Federal Reserve, FDIC, OCC, SEC and CFTC on December 10, 2013. An introduction to the new compliance requirements is also included.

To make our summary and analysis of the final rules more user-friendly, these flowcharts graphically map the key restrictions on covered trading activities in lieu of a traditional law firm memo.

In addition to the proprietary trading flowcharts, Davis Polk flowcharts analyzing the Volcker Rule’s prohibition on banking entities sponsoring or acquiring ownership interests in hedge funds and private equity funds will be available at volckerrule.com.

Click image to enlarge

Click image to enlarge

The complete publication, which includes flowcharts, diagrams, tables, and timelines to illustrate key aspects of the Volcker Rule, is available here.

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