On October 17, 2018, the Committee submitted a comment letter to the Federal Reserve, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Commodity Futures Trading Commission, and Securities and Exchange Commission providing the Committee’s input on the proposed amendments to regulations implementing the Dodd-Frank Act’s Volcker Rule.
The Committee’s letter identifies areas where the proposed amendments fall short of the agencies’ stated goals of reducing the burdens and complexity of the current regulations. Furthermore, the letter makes recommendations about how the proposal could be revised to more effectively accomplish the agencies’ stated goals.
First, the letter recommends that the agencies drop the proposed accounting test, which would otherwise expand the scope of prohibited activities beyond proprietary trading. Second, the letter recommends the agencies eliminate the 60-day presumption under the existing short-term intent test if that test is retained. Third, the letter calls for the agencies to drop the proposed amendments’ new reporting metrics. Fourth, in evaluating banking entities’ internal risk limits, the letter encourages the agencies to adopt a flexible, supervisory-based approach. The letter also sets forth other recommendations regarding the extraterritorial application of the Volcker Rule, the overly expansive scope of the covered funds restrictions in the existing regulations, and the need for improved coordination in the implementation of the Volcker Rule.
The Committee’s letter can be found here.