Clock Starts Ticking 4/1 for Tougher Fed Bank Rules
Banks have two years to get rid of risky investments, starting April 1, according to new Federal Reserve rules. The rules flesh out compliance with Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, also known as the Volcker Rule.
The Board of Governors of the Federal Reserve System may grant an additional three years to banks that are invested in hedge funds and other investment vehicles considered “illiquid” because contractual obligations prohibit the banks withdrawing their investment before a specified maturity date.
Only “illiquid” positions held before the Feb. 14 publication of the new rule in the Federal Register are eligible for an extension of the conformance period.