Study Recommendations on Prohibitions on Proprietary Trading Certain Relationships with Hedge Funds Private Equity Funds
FSOC The Financial Stability Oversight Council published a report on steps that should be taken to implement § 619 of the Dodd-Frank Act, also known as the Volcker Rule. The section generally prohibits banking entities from engaging in proprietary trading and from investing in or sponsoring hedge funds and private equity funds. Among the report's recommendations to regulatory agencies are (1) requiring banking entities to sell or wind down impermissible trading desks; (2) requiring strong compliance and supervisory programs at banks to address concerns relating to the Volcker Rule; (3) requiring public disclosure of permitted exposure to private funds; and (4) prohibiting banking entities from engaging in transactions that would allow them to "bail out" a private fund. Please contact any of the following Cadwalader attorneys if you have any questions about this item: Steven Lofchie; [email protected] Scott Cammarn; [email protected] Date January 18, 2011 Cross References (links may require a Cabinet subscription) Dodd-Frank § 619 FSOC Press Release CWT C&F Memo: An Analysis of the Dodd-Frank Act's Volcker Rule (Oct. 15, 2010)