Definition of trading account under volcker rule
These entities are required to establish, maintain, and enforce a governance and management framework that is reasonably designed to ensure that appropriate personnel are responsible and accountable for the effective implementation and enforcement of the compliance program, a clear reporting line with a chain of responsibility, and the periodic review of the compliance program by senior management. The regulators contend that the Rule as promulgated achieves a balance between promoting healthy economic activity and reducing regulatory burdens where appropriate. Therefore, a purchase or sale of a financial instrument that is held for more than definition of trading account under volcker rule days does not necessarily mean that it is not for the trading account of a banking entity.
The devil will be in the interpretation of many of these rules. The maturity of interests held by the conduit must be days or less. For example, foreign banks that maintain only representative offices in the United States are not subject to the Volcker Rule. These matters will need to be clarified with the staff of the functional regulators.
After all, mortgage-backed securities, considered to be liquid by the market, did prove to be otherwise during the financial crisis. Views expressed in the comments do not represent those of Reuters. A banking entity is also permitted to engage in underwriting and market-making activities involving a covered fund so long as: Trading accounts consist of any one of the following:. Definition of trading account under volcker rule of the Rule foresaw a reduction in the efficiency of markets, economic growth and employment as a result of loss of liquidity.
Permitted Foreign Covered Fund Activities Foreign banking organizations are not subject to the prohibitions on covered fund activities definition of trading account under volcker rule the following among other requirements are satisfied: A banking entity is also permitted to engage in underwriting and market-making activities involving a covered fund so long as: Risk and position limits and usage - the amount of risk that a trading desk is permitted to take at a point in time, as defined by the banking entity for a specific trading desk, calculated on a daily basis.