This story appeared in Bank Digest.
The Federal Reserve Board has announced additional details regarding how banking entities may seek an extension to conform their investments in a narrow class of funds that qualify as "illiquid funds" to the requirements of section 619 of the Dodd-Frank Act, commonly known as the Volcker Rule. According to a press release, the Fed expects that the illiquid funds of banking entities will generally qualify for extensions, though extensions may not be granted in certain cases--for example, where the banking entity has not demonstrated meaningful progress to conform or divest its illiquid funds, has a deficient compliance program under the Volcker Rule, or where the Fed has concerns about evasion. In a statement of policy, the Fed outlined a simplified and streamlined process for granting extensions of the holding period for illiquid funds. The Fed reiterated the process in SR 16-18.