Fed Extends Volcker Deadline by Two Years
Yesterday, on December 18, 2014, the Federal Reserve announced that it would extend the deadline for compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act’s (Dodd-Frank Act) Volcker Rule. The rule, designed to restrict banks from using consumer deposits to make risky investments, was originally scheduled to be effective on July 21, 2015. Now banks will have until July 21, 2017. The Federal Reserve has also stated that it will consider further extensions past the July deadline for certain illiquid funds. The proprietary trading implementation deadline still stands, but the legacy covered funds provisions have been extended to July 21, 2016, after which the Federal Reserve plans to delay conformance by another year. The extensions apply to investments made before December 31, 2013. Any fund investments made this year must still comply with the 2015 date.
The extensions are the result of a heavy lobbying effort from bank trade associations, especially including the Securities Industry and Financial Markets Association (SIFMA), as well as complaints from complaints from individual banks.