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Volcker Rule adopted

Federal financial regulators voted today to adopt final rules implementing Section 619 of the Dodd-Frank Act, commonly known as the Volcker Rule. The rules generally prohibit banks from short-term proprietary trading of securities, derivatives, futures and options on these instruments. They prohibit banks from owning, sponsoring or maintaining certain kinds of relationships with hedge funds or private equity funds that engage in such trading. The rules also require banks to maintain a compliance program specific to the Volcker Rule if they engage in covered activities.

Banks under $10 billion in assets did win limited relief in the rules as it states, "... community banks do not have any compliance obligations under the Final Rule if they do not engage in any covered activities other than trading in certain government, agency, State or municipal obligations. The Final Rule is designed to place minimal burden on community banks given the nature of their activities."

Click here to read the release from the joint agencies on the Volcker Rule and click here to read the final rules.
Additionally, click here to read ABA President and CEO Frank Keating's take on this news.

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