Federal regulators have finally unveiled their proposal for the Volcker Rule, a linchpin of the Dodd-Frank Act that would restrict proprietary trading by many financial firms and require expansive new compliance programs for banks to monitor and report on their trading activity.
The 298-page plan, presented last week by the Federal Deposit Insurance Corp. and the Securities and Exchange Commission, foremost prohibits banks from “trading on their own account,” to deter them from making risky investments such as what led to the financial crisis in 2008. (The proposal also contains a series of exemptions for when proprietary trading is acceptable.)
