Agencies Propose Changes to Modify "Covered Funds" Restrictions of Volcker Rule — 2020-01-30

Five federal financial regulatory agencies on Thursday invited public comment on a proposal to modify regulations implementing the Volcker rule's general prohibition on banking entities investing in or sponsoring hedge funds or private equity funds – known as "covered funds." Since the regulations implementing the Volcker rule were finalized in 2013, the rule has created compliance uncertainty and imposed limits on certain banking services and activities that the Volcker rule was not intended to restrict. To address these concerns, the agencies simplified requirements for the proprietary trading restrictions in November 2019. Today's proposal would modify the restrictions for banking entities investing in, sponsoring, or having certain relationships with covered funds.