The OCC is requesting additional information and suggestions that the OCC and the other agencies responsible for implementing the Volcker Rule can consider as they determine whether to propose formal changes to the rule.1 Any formal rulemaking would require joint action by the OCC and those other agencies. None of the other agencies has issued corresponding requests for public comment at this time.
The OCC’s notice states that there is broad recognition that the final rule should be improved both in design and in application. It identifies some common industry concerns with the final rule, such as the difficulty of distinguishing between prohibited proprietary trading and permitted market making, and the inclusion within the scope of the rule of certain foreign funds that are not covered funds but are controlled by foreign banking entities. The notice also focuses on whether smaller banking entities should be subject to the Volcker Rule. The OCC is seeking qualitative and quantitative support for changes and clarifications that would improve the rule, including at least some of the changes proposed in the Treasury report.
The request for comment is divided into four categories: (1) the scope of entities subject to the rule; (2) the proprietary trading prohibition; (3) the covered funds prohibition; and (4) compliance programs and metrics reporting. The notice also states that the OCC welcomes comment on all aspects of the final rule and the final rule’s administration.
The notice did not propose changes to the manner in which the Volcker Rule will be administered pending any future rulemaking or statutory changes.
1 Those other agencies are the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, and the Commodity Futures Trading Commission.
Sidley Banking & Financial Services Practice