Forex Trading And Volcker Rule: Legal Considerations In Toronto – Filed a comment letter on the proposed regulations implementing the Volcker Rule requesting regulatory agencies to exclude CLOs from the Volcker Rule.

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Forex Trading And Volcker Rule: Legal Considerations In Toronto

Forex Trading And Volcker Rule: Legal Considerations In Toronto

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Pdf) The Volcker Rule And Evolving Financial Markets

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Legalization Of Forex Trading In The Us: Facts And Trends

September 12, 2023 – This week joins two letters submitted to the SEC by groups of trade associations asking the SEC… Situations: Federal Reserve, Office of the Comptroller of the Currency (“OCC”), Federal Deposit Insurance Corporation (“FDIC”), Securities & Exchange The Exchange Commission (“SEC”), and the Commodity Futures Trading Commission (“CFTC”) recently amended their rules under the Volcker Rule (Section 13 of the Bank Holding Company Act of 1956 (the “BHC Act”)), October 1, 2020. Effective from

Effects: These changes allow banking institutions to engage in certain funding activities, expand allowable transactions with covered funds, reduce external influences on foreign funding, confirm existing Volcker Rule FAQs, generally, and otherwise clarify the Volcker Rule.

Looking Ahead: The changes expand opportunities, directly and indirectly, by providing certainty to the Volcker Rule. This will enable domestic and foreign banking institutions to better serve their customers and support the economy, while reducing compliance burdens consistent with the safety and soundness of financial institutions.

Forex Trading And Volcker Rule: Legal Considerations In Toronto

The Federal Reserve, OCC, FDIC, SEC and CFTC have made changes to their Volcker Rule regulations effective October 1, 2020. These changes allow banking institutions to engage in certain fund activities, expand permissible transactions with covered funds, reduce external influences on foreign funds. , confirm the existing Volcker Rule FAQ, generally, and otherwise clarify the Volcker Rule.

Immigration Reform: The Federal Reserve Should Adopt The 2019 Volcker Rule Revisions As The Standard For How Foreign Banks Can Engage In Nonbanking Activities Within The United States

The Volcker Rule and related regulations prohibit FDIC-insured depository institutions and their holding companies and affiliates (“banking institutions”) from investing in and sponsoring hedge funds and private equity funds, and generally any issuer that is an investment company under an investment company. Act of 1940, unless it is excluded by section 3(c)(1) or 3(c)(7) of that Act. Some foreign funds and commodity pools are also covered funds. Proprietary trading directly or indirectly through Covered Funds is prohibited.

Parallel and co-investment by banking institutions with cover funds will no longer be included in computing the permissible amount invested in cover funds. As permitted by Section 23A of the Federal Reserve Act, low-risk transactions with related cover funds are now permitted, including risk-free principal transactions and ultra-short-term credit incidental payments, clearing and settlement, futures and derivatives transactions. , subject to the market price and condition requirements of section 23B.

BHC Act Section 13(g) states that “[this] … section shall [not] limit or restrict the ability of a banking entity to sell or securitize loans in a manner permitted by law.” clarifies the amendment. Allowing securitizations and collateralized loan obligations (“CLOs”) and excluding certain rights of senior debt holders, including customary rights to remove asset managers from “ownership interests” subject to the Volcker Rule. Securitizations and CLOs may consist of up to 5% of cash equivalents, non-debt debt securities (excluding asset-backed and convertible securities), and related derivatives. Leases are included as “debts” (see Jones Day

, “Volcker Rule Covered Fund Amendments: What They Will and Will Do for CLOs”). Private and Public Foreign Funds

The Costs Of Inefficient Regulation: The Volcker Rule — Money, Banking And Financial Markets

Section 13(d)(1)(I) of the BHC Act permits ownership interests and sponsorship of hedge and private equity funds only by banking institutions outside the United States, but no ownership interests are offered or sold. The United States and a banking entity not directly or indirectly controlled by a banking entity organized under the laws of the United States or its states (“SOTUS Exemption”).

The Volcker Rule Amendments of 2019 codified the Federal Reserve’s Volcker Rule FAQ 13 that foreign funds are not sold in an offering targeting US residents where the banking institution or its affiliates are not participating in the offering. A banking institution or affiliate is deemed to participate in such offering if it sponsors or directly or indirectly serves as an investment manager, investment advisor, commodity pool operator or commodity trading advisor for a covered fund. The latest amendments codify temporary Federal Reserve policy statements regarding “qualified foreign excluded funds” that expire in 2021. Eligible foreign excluded funds are largely exempt from the Volcker Rule’s proprietary trading restrictions, the “covered fund” prohibition, and the “banking institution” prohibition. .”

The amendments define an “eligible foreign excluded fund” with respect to a foreign banking entity as an entity that:

Forex Trading And Volcker Rule: Legal Considerations In Toronto

In addition to foreign private funds that are qualified foreign excluded funds, the latest amendments provide greater consistency between US and foreign public funds permitted by the Volcker Rule. Foreign Excluded Fund Interests may be sold in one or more public offerings, subject to basic disclosure and retail investor protection and other laws, provided that 75% or more of the interest may not be owned by a U.S.-controlled banking institution and its affiliates. The amendment further recognizes that the seeding period of foreign funds may vary and may exceed three years.

Sbic Revival: Why Interest From Banks Is Way Up, As The Volcker Rule Looms

These rules clarify and expand the permissible banking activities and relationships under the Volcker Rule. Banking institutions can more confidently engage in more financial activities through funding structures that are permitted to “support the real economy through the broadest means legally possible.” Banking institutions cannot guarantee fund performance or “ball out” sponsored funds and are subject to conflicts of interest limits with regulatory capital requirements and protected funds. When these regulations take effect, banking institutions, their customers and potential investors should plan now to enable them to take advantage of the new opportunities.

2. These pragmatic changes will facilitate the expansion of credit in the economy, reduce the external impact of the Volcker rule on foreign funds, encourage public welfare investment, and reduce compliance burdens.

Jones Day publications should not be construed as legal advice on any particular facts or circumstances. The material is for general information purposes only and may not be quoted or referenced in any other publication or proceeding without the firm’s prior written consent, given or withheld at our discretion. To request reprint permission for any of our publications, please use our “Contact Us” form, which can be found on our website here. This publication is not intended to create a mailing, and receipt thereof, does not create an attorney-client relationship. The views expressed herein are the personal views of the authors and do not necessarily reflect the views of the firm.

September 2023 Alert Federal Court Rejects CFPB’s Use of “Unfair, Deceptive, or Abusive Acts or Practices” Authority

Submits Comment Letter On Volcker Rule Proposal

The above information is for general use and is not legal advice. This email is not intended to constitute, and receipt of, an attorney-client relationship. Nothing you send to anyone at our firm will be confidential or privileged unless we agree to represent you. If you send this email, you confirm that you have read and understood this notice. Volcker Rule and Venture Capital The Volcker Rule prohibits banks from investing in covered funds, including proprietary trading or venture capital funds.

It is rare that new pools of capital become available overnight. The covered funds section of the Volcker Rule was updated on October 1, 2020, allowing banks to once again invest in venture capital funds. This was the first time since 2008. We’ll discuss how we got to this point, what venture capital means, and what fund managers should be thinking about as a result of this policy shift.

After the 2008 global financial crisis, policymakers were concerned that banks invested their own capital in financial products that could depreciate in value and cause losses to depositors or lead to bank failure. Policymakers believed that such a failure would disrupt the financial system. Their reaction? It’s illegal.

Forex Trading And Volcker Rule: Legal Considerations In Toronto

The Volcker Rule prohibits banks from trading proprietary or investing in hedged funds, including venture capital funds. The first Volcker rule covering the fund’s division, which took effect on April 1, 2014, missed the mark. Previous bank investments and venture capital fund connections did not lead to a financial crisis. A bank’s assets and income streams will be more diversified if it can invest in qualified venture capital funds. This benefits the bank and the financial system as a whole.

The Volcker Rule, Venture Capital And Unintended Consequences

Reforming this rule would not only help creative industries and jobs, but might also help

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