The banking agencies, SEC, and CFTC have proposed long-awaited, complex, and comprehensive rules rolling back many of the restrictions on covered funds imposed in the 2013 rules implementing the Volcker Rule provisions of the Dodd-Frank Act. Strongly opposed by those who fear greater integration of banking and “speculative” finance or commerce, the NPR liberalizes the “Super 23A” inter-affiliate transaction restrictions on excluded covered funds that now limit their ability to benefit from funding and operational capacity within affiliated insured depositories. Foreign banking organizations (FBOs) would also gain considerably through final codification and expansion of longstanding exemptions for certain covered-fund activities that conflict with international rules. Classes of newly-permissible funds would include credit funds which integrate bank-credit functions with capital-markets and asset-management opportunities.
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