The five federal entities that have sponsored a proposal to modify the Volcker Rule prohibition on banking institutions investing in or sponsoring hedge funds or private equity funds — known as “covered funds” — have extended the proposal comment period from April 1 to May 1.
The sponsoring agencies are the Securities and Exchange Commission, Commodity Futures Trading Commision, Federal Deposit Insurance Corp., Federal Reserve and the Office of the Comptroller of the Currency.
The CFTC’s notice of the delay implies that the extension is due to the impact of the COVID-19 pandemic. It states that “the agencies will continue to consider comments to provide interested persons more time to analyze the issues and prepare their comments in light of potential disruptions resulting from the coronavirus.”
The proposed rule is intended “to improve and streamline the covered fund provisions and provide clarity to banking entities” on what financial services they can offer and activities that they can engage in without violating the Volcker Rule, according to the SEC. It would “modify the restrictions for banking entities investing in, sponsoring, or having certain relationships with covered funds,” according to the OCC.