Bulletin outlines instructions, specs for submitting ‘quantitative measurements’ under revised Volcker rule

Instructions and technical specifications for preparing and submitting quantitative measurements under the Volcker rule are outlined in a bulletin issued Monday by the federal regulator of national banks.

The instructions and specifications issued by the Office of the Comptroller of the Currency (OCC) apply to a final rule issued a year ago by the federal banking agencies, the Commodity Futures Trading Commission (CFTC), and the Securities and Exchange Commission (SEC). That final rule revised the regulations implementing the Volcker rule, including the regulatory requirement to submit certain quantitative measurements.

The Volcker rule generally prohibits banking entities from engaging in proprietary trading or investing. Revisions contained in the final rule published last year, the agencies said, gives firms that do not have significant trading activities “simplified and streamlined compliance requirements.” Firms with significant trading activity will have more stringent compliance requirements under the final rule, the agencies added.

Community banks generally are exempt from the Volcker rule by statute (in accordance with provisions of the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act, or EGRRCPA).

The revisions from last year continue to prohibit proprietary trading while providing greater clarity and certainty for activities allowed under the law, the agencies asserted. “With the changes, the agencies expect that the universe of trades that are considered prohibited proprietary trading will remain generally the same as under the agencies’ 2013 rule,” the agencies said.

Under the final rule, the OCC Monday said banking entities with significant trading assets and liabilities must submit certain quantitative measurements on a quarterly basis and in accordance with the extended markup language (XML) schema posted on its “Volcker Rule Implementation” web page. The instructions and technical specifications conveyed by the bulletin issued Monday, the OCC said, provide the relevant XML schema and additional guidance on how to prepare and submit quantitative measurements relating to the Volcker rule.

The compliance date for the “Volcker Rule: Final Rule” is Jan. 1.

OCC Bulletin 2020-105: Volcker Rule: Quantitative Measurements