WASHINGTON, July 21 (Reuters) - U.S. financial regulators announced Friday that they would review Volcker Rule regulations to ensure that foreign funds that should be exempt from the ban on proprietary trading by U.S. commercial banks do not face regulatory scrutiny.
The banking agencies charged with enforcing the ban on proprietary trading, including the Federal Reserve, the Federal Deposit Insurance Corp and the Commodity Futures Trading Commission, said they would halt enforcement of the Volcker Rule for one year for qualifying foreign funds while they conduct the review. They added that they may need Congress to step in and alter the Dodd-Frank financial reform law to ensure those foreign funds are not subjected to the rule.
“The staff of the agencies are considering ways in which the implementing regulations may be amended, or other appropriate action may be taken,” the regulators said in the announcement.
The regulators said a number of foreign banking entities and government officials had expressed concern that current regulations may be improperly applying the rule to some foreign funds, organized and offered outside the United States, due to certain governance structures or investment arrangements. (Reporting by Pete Schroeder; Editing by David Gregorio)