Proprietary Trading Restrictions Under the Final Volcker Rule

Skadden, Arps, Slate, Meagher & Flom LLP

Laura A. Kaufmann Belkhayat Maureen A. Donley

The final regulations implementing the Volcker Rule prohibit banking entities from engaging in proprietary trading, but provide exceptions intended to allow core commercial banking activities and other risk-mitigating activities. Banking entities that engage in these permitted activities will be required to establish enhanced compliance programs and to comply with enhanced reporting and recordkeeping requirements. This publication explores the proprietary trading restrictions and provides insight into potential implications of the final rule.