By J. Preston Carter, J.D., LL.M., Editor, Financial Privacy Law Guide, CCH Federal Banking Law Reporter, State Banking Law Reporter and Bank Digest; co-author, Dodd-Frank Wall Street Reform and Consumer Protection Act—Law, Explanation and Analysis.
The federal bank and securities regulatory agencies have decided to accept comments on the proposed rule that would restrict financial institutions' ability to engage in proprietary trading and have relationships with hedge and private equity funds--usually called the "Volcker Rule"--for an additional month. The comment period, which originally was to close on Jan. 13, 2012, will continue until Feb. 13, 2012. Prior to the agencies' action, Rep. Randy Neugebauer, R-Texas, released a bipartisan letter to regulators, signed by 121 members of the House of Representatives, expressing deep concerns with the proposed "Volcker Rule."
According to Neugebauer, the rule threatens to "throw a blanket" over U.S. capital markets and the ability of American companies to access funding to help create jobs. Additionally, Neugebauer continued, no other country has adopted similar rules, placing U.S. companies at a notable competitive disadvantage.
The letter asks for regulators to extend the comment period and implementation deadline, and re-propose an "interim proposed rule" once all initial comments have been received and digested by the joint regulators, including the Commodity Futures Trading Commission, which is expected to issue their own proposal.