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How to get a Volcker rule extension for illiquid funds

Joe Mont | December 14, 2016

The Federal Reserve Board has released additional details on how banks may seek an extension for conforming their investments in illiquid funds to the Dodd-Frank Act's prohibition on proprietary trading known as the Volcker Rule.

Dodd-Frank's Section 619 generally prohibits insured depository institutions and any company affiliated with an insured depository institution from engaging in proprietary trading and from acquiring or retaining ownership interests in, sponsoring, or having certain relationships with a hedge fund or private equity fund. These prohibitions are subject to a number of statutory exemptions, restrictions, and definitions.

The rules to implement the Volcker rule were implemented by the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, and the Commodity Futures Trading Commission in December 2013. The new guidance relates only to the period for...

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