Fed, FDIC boards to consider proposed changes to Volcker Rule

Proposed revisions to the “Volcker Rule” — which places limits on proprietary trading and hedge fund and private equity investments — will be considered by the federal banking regulators this week.

The Federal Reserve Board is slated to consider proposed revisions to the Volcker Rule during an open meeting Wednesday that will be webcast beginning at 3 p.m. ET. The Federal Deposit Insurance Corp. (FDIC) Board is slated to take it up in open session Thursday. That 2 p.m. ET meeting also will be viewable online.

The recently enacted Economic Growth, Regulatory Relief and Consumer Protection Act makes fewer banks subject to the Volcker Rule. Enacted May 24, the measure exempts from the rule banks with total assets valued at less than $10 billion and trading assets and liabilities comprising not more than 5% of total assets.

Thursday’s open FDIC Board meeting is likely to be the first presided over by Jelena McWilliams, confirmed last week as the agency’s new chairman.

In addition to the Volcker Rule proposal, the board is expected to approve a final rule to shorten insured banks’ securities transaction settlement cycles.

The proposed rule was issued jointly last September by the FDIC and the Office of the Comptroller of the Currency (OCC). It would shorten from three days to two days the standard settlement cycle for securities purchased or sold by FDIC-supervised institutions, national banks and federal savings associations. The proposal would align the banking agencies’ rules with a new standard implemented by the Securities and Exchange Commission. (The proposal was explained in FDIC Financial Institution Letter (FIL) 44-2017.)

Federal Reserve Board notice of open meeting

FDIC notice of open board meeting

FDIC FIL 44-2017