Volcker Rule comment period extended one month

Four US federal agencies have extended the period during which comments will be taken on the proposal to implement the Volcker Rule of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The comment period will now close on February 13, 2012, a month later than originally planned.

The Dodd-Frank Act aims to promote financial stability in the US by improving the accountability and transparency of the financial system. It also aims to end “too big to fail” situations and to protect American taxpayers by ending bailouts, whilst also protecting consumers from abusive financial services practices.

The Act requires regulators to implement certain prohibitions and restrictions on the ability of banks and non-bank financial companies to engage in proprietary trading and to have certain interests in (or relationships with) hedge funds and private equity funds. The so-called Volcker Rule will limit such financial entities to owning no more than 3% total ownership interest in any such hedge or private equity fund.

The comment period has been extended as part of a coordinated, inter-agency effort to allow interested persons more time to analyze the issues and prepare their comments. The extension has been proposed and endorsed by the Federal Reserve Board; the Federal Deposit Insurance Corporation; the Office of the Comptroller of the Currency; and the Securities and Exchange Commission.

(Wall St sign image thanks to Wikimedia Commons).