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SIFMA today issued the following statement from President and CEO Kenneth E. Bentsen, Jr. on the Agencies finalization of changes to the Volcker Rule:
“SIFMA supports the Agencies’ goal of reducing compliance-related inefficiencies of the Volcker Rule. The revisions finalized by all of the Agencies will help ensure the Rule does not negatively and unnecessarily impact market liquidity, capital formation and economic growth, which could be exacerbated during times of stress. The removal of the accounting prong is a positive step forward in ensuring the regulatory definition of ‘trading account’ does not go beyond the statutory definition and Congressional intent.
“Several studies showing the Rule’s negative impact on market liquidity, most recently from the Office of Financial Research, and numerous calls by policymakers to simplify the Rule, including from former Fed Chairs Paul Volcker and Janet Yellen and former Fed Governor Dan Tarullo, underscore the need for revision. It is important to be clear on what the changes encompass. These revisions do not in any way negate the statutory prohibition on proprietary trading by banks. However, we expect the revisions will provide market participants with more clarity on compliance as they implement the continuing legal restrictions under the Rule, and they will make it easier for the regulators to ensure compliance.”
