SIFMA Submits Letter to FRB Regarding Extension of Volcker Rule Conformance Period
SIFMA provided the Board of Governors of the Federal Reserve System ("FRB") with preliminary data on the categories of covered fund activities and investments. SIFMA expects its members to submit requests for one-year extensions of the conformance period under the Volcker Rule.
According to SIFMA, while its members are working to conform their activities and investments to the Rule's requirements by July 21, 2015, certain categories of covered fund activities and investments "pose major challenges to the realization of this effort." According to SIFMA's members, conforming existing fund activities and investments to the Rule is "more challenging" than ensuring that new fund activities and investments are in compliance.
In light of the limited interpretive guidance issued regarding Volcker compliance and the "substantial number of extension requests" that the FRB would be required to examine, SIFMA suggested that the FRB consider providing extensions by fund type or category as a way to enable banking entities to more efficiently satisfy their Volcker obligations.
The categories of covered fund activities and investments for which SIFMA members plan to submit extension requests include:
- illiquid private equity funds;
- exempt asset management activities;
- wind-down and late stage funds;
- foreign public funds;
- legacy seed investments in registered investment companies; and
- tender option bonds and other municipal bond repackaging vehicles.
SIFMA concluded by suggesting methods by which the FRB could extend the conformance period, and requested that the FRB issue guidance on this topic as soon as practicable.
See: SIFMA Letter to FRB.