Cheat sheet: How regulators plan to revamp the Volcker Rule
By Rachel Witkowski
A proposal to revamp the Volcker Rule due to be released by regulators this week will aim to ease the industry’s compliance burden while keeping the general framework of the proprietary trading ban in place, according to sources familiar with the matter. In what these sources call Volcker Rule 2.0, financial regulators will propose clarifications around what activity is allowed under the ban’s liquidity management exception, as well as revisions to how certain trading activity is determined to be in compliance with the rule. …“The rebuttable presumption change is the most important,” said Karen Shaw Petrou, managing partner of Federal Financial Analytics. “The current regulatory approach is ‘guilty unless you can prove yourself innocent’ in terms of what is or is not proprietary trading.” But “the ‘innocent until proven guilty’ approach . . . is a preferable regulatory approach,” Petrou added.