Tuesday, December 06, 2011

Financial Industry Asks SEC and Banking Agencies to Extend Comment Deadline on Proposed Regulations Implementing Volcker Rule

In a letter to SEC Chair Mary Schapiro and federal banking regulators, securities and banking trade associations requested that the agencies extend the deadline for comments on their proposed regulations under the Volcker Rule. Specifically, the associations urge the financial regulators to extend the deadline for comments on the Volcker Rule regulations proposal to the later of 90 days after the current deadline of January 13, 2011 or to 60 days after the CFTC releases its proposed regulations. The letter was signed by the American Bankers Association, SIFMA, and the Financial Services Roundtable.

The industry is deeply concerned about the potential impact of the proposal on capital formation, markets and liquidity for a range of asset classes and on the safety and soundness of banking entities and the businesses in which they engage. In the view of the associations, the fact that more than 1400 questions have been asked by the agencies in the proposal signals that, despite the agencies’ conscientious and thoughtful efforts in composing the proposal, many key issues remain unsettled. Association members are devoting significant time to understanding the proposal, said the groups, including its global impact, and are actively discussing the proposal and working together to generate thoughtful comments.

The trade associations also noted that the CFTC has not yet published its notice of proposed rulemaking on the Volcker Rule, nor has the CFTC stated how its proposal will align, or not, with the proposal already released by the Agencies. The futures and swaps markets regulated by the CFTC will be significantly impacted by the Volcker Rule, as will affiliates and subsidiaries of banking entities for which the CFTC is the primary financial regulatory agency.

Since the agencies are required by statute to consult and coordinate with each other in developing and issuing implementing rules for the purposes of assuring, to the extent possible, that such rules are comparable and provide for consistent application and implementation, the associations believe that it would be appropriate to permit covered banking entities and other stakeholders sufficient time to understand and respond to the proposed rules of all five agencies charged with implementing the Volcker Rule provisions of Dodd-Frank.