The Federal Reserve has issued a statement committing it and the other regulators governing the “Volcker Rule” generally not to demand compliance from banks after the statutory effective date this July due to the uncertain status of the inter-agency proposal to implement the ban on proprietary trading and hedge/private-equity fund investment. This is intended to alleviate legal uncertainty and, thus, potential risk, although nothing in this statement affects the significant impact of the Rule or, perhaps, the even more stringent requirements of the pending proposal. Despite this clarification, banks will need to commence good-faith compliance efforts based on their best-guess as to the final rule’s impact even as the proposal’s status remains uncertain.

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