As clients know, December 10 is now set for the inter-agency release of a Volcker Rule now reportedly topping 950 pages and still being revised. In this report, FedFin provides clients with our best forecast of the likely content of this critical rule. We have not seen the draft nor been provided with confidential access to it – of course, highly improper. We base this forecast on ongoing discussions with officials and others involved in finalizing this rule which – despite significantly more flexibility for conformance than once anticipated – will redefine investment banking in any banking organization doing business in the U.S. We address here the new rule’s likely provisions on defining proprietary trading, hedging, prohibited fund investments, and the treatment of sovereign debt – with several of these provisions subject to different treatment depending on the agency with jurisdiction to examine and enforce them. Importantly, no matter what the final rule says, we expect ongoing uncertainty because it will surely be challenged on grounds that taking the vague 2011 proposal into a final rule (even if an interim final one) violates the Administrative Procedure Act and other standards for deliberate and transparent rulemaking. While the final rule will be considerably tougher than the industry would like, certain recent analyses of the impact it will have are, in our view, unduly dire. Although the largest U.S. banks do derive considerable income from trading and fund investments, a significant proportion of both activities (particularly fixed-income trading) will remain permissible.