One year after its implementation,
US counsel are assessing the Volcker Rule. The message is
clear: they wish it had been crafted with better definitions,
fewer authors, and a better sense of the potential impact on
securitisation, market liquidity and shadow banks.
Since implementation in 2015,
Section 619, or the Volcker Rule, has caused complaints from
counsel and industry. So one year on, IFLR asked how exactly
practitioners feel the rule could have been written
Definitions was top of market participants' concerns. The
Volcker Rule has two core aims. One, banning insured depository
institutions and their affiliates from proprietary trading.
Two, limiting such entities’ investment in private
equity funds, hedge funds or covered funds. As the rule was
written, however, it became apparent there was a complication:
defining covered funds.
"The Volcker Rule's authors couldn’t figure out
how to define the types of funds they were...