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By: Lawrence Berkovich, John Hwang, Chris Jackson, Sheena Paul, Derek Poon, Nicholas Robinson, Bill Satchell, Ari Yannakogeorgos, Allen & Overy LLP

On January 30, 2019, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Securities and Exchange Commission and the Commodity Futures Trading Commission (together, the Agencies), proposed rules (the Proposed Rules) that, if adopted, would further amend the existing rule under Section 13 of the Bank Holding Company Act of 1956, as amended (the BHC Act), commonly known as the Volcker Rule.

The Volcker Rule generally prohibits a banking entity from engaging in proprietary trading and from acquiring or retaining an ownership interest in, or sponsoring or having certain relationships with, a covered fund. The Proposed Rules do not amend the definition of "covered fund," but seek to clarify and relax some of the existing prohibitions. They codify approaches already followed by the Agencies to some extent, but also modify existing exclusions and propose new exclusions that generally demonstrate the Agencies' desire to clarify and simplify compliance, to limit the Volcker Rule's extraterritorial application, and to permit market participants to undertake certain fund activities that do not present the risks that the Volcker Rule was intended to address. Notable proposals include:

The Scope Of "Ownership Int......................

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