The Volcker Rule:13 Considerations for Calculating and Reporting Quantitative Measures
On December 10, 2013 three Federal banking agencies as well the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) approved final regulations1 implementing Section 619 of the Dodd-Frank Act — also known as the "Volcker Rule." The Volcker Rule (the Rule) imposes substantial requirements that will likely require significant effort to implement.
U.S. banking organizations exceeding $10 billion in trading assets plus trading liabilities will need to report certain quantitative measures to their regulators. For foreign banking organizations, this $10 billion threshold test is to be applied only to their U.S. operations. The deadline for this reporting varies according to size; however, banking organizations that exceed $50 billion in trading assets plus trading liabilities2 will be required to produce and report quantitative metrics beginning June 30, 2014.
Read this paper as there may be significant challenges implementing the quantitative measures outlined in the final Rule's Appendix A, and these issues may likely be especially significant for institutions engaged in a broad range of capital markets activities. Foreign banking organizations face further issues and complexities that may necessitate additional consideration and determination.