Fed updates Volcker Rule guidelines to allow banks to extend hedge fund investments
Washington — The Federal Reserve is streamlining part of its Volcker Rule compliance regulations, providing guidelines to banks seeking more time to start up and spin off new hedge funds and private equity funds. The Volcker Rule, named after former Federal Reserve chairman Paul Volcker, is part of the Dodd-Frank legislation introduced after the 2008 financial crisis, that seeks to restrict US banks engaging in certain kinds of speculative investments, and is often referred to as a ban on proprietary trading by banks. The Federal Reserve Board published new guidelines on Monday detailing how banks could apply for an extension for more time to complete a "seeding" investment in a hedge fund or private equity fund, before selling off its ownership as mandated by the Volcker Rule. The Federal Reserve Board also said it would allow its 12 regional banks to approve those extension requests in most cases. Monday’s tweak marks the second regulatory adjustment the Fed has made to the Volcke...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.