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Proposed Legislation Would Delay Volcker Rule Effective Date

A bipartisan group of Senators has introduced legislation that, if it becomes law, would delay the effectiveness of the Volcker rule until 12 months following the issuance by the FRB, the OCC, the FDIC, the SEC and the CFTC (collectively, the “Agencies”) of final rules to carry out the Volcker rule.  Currently, the Volcker rule provides that it will become effective on the earlier of 12 months following the adoption of such a final rule or two years after the date of enactment of the Dodd-Frank Act.  Because the Agencies have not yet issued final rules to carry out the Volcker rule, in the absence of additional legislation, the Volcker rule will become effective on July 21, 2012.  If the Agencies do not issue final rules that becomes effective prior to the Volcker rule’s effective date, banking entities subject to the Volcker rule will need to comply with the Volcker rule without the benefit of any clarification as to the Volcker rule’s scope and without the benefit of any exemptions from the Volcker rule as the Agencies may provide in a final rule.

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