US Volcker Rule not fit for purpose, says SIFMA
22 September 2017 New York
Image: Shutterstock
The US Volcker Rule is too broad, excessively complex, and uniquely prescriptive, according to the Securities Industry and Financial Markets Association (SIFMA).
Responding to the Office of the Comptroller of the Currency’s (OCC’s) request for comments on the rule, SIFMA said: “[the rule] should be revised to better accomplish the purposes of the underlying statute and its impact on the efficient functioning of markets to facilitate growth.”
SIFMA added that, the complexity of implementing regulations, and the difficulties inherent in having five agencies tasked with implementing and interpreting the regulations, mean that many key interpretive issues remain unresolved.
In its letter to the OCC, SIFMA set out several recommendations for reform, including, revise the definition of proprietary trading to focus on speculative short-term standalone proprietary trading and simplifying the prescriptive compliance obligations of the proprietary trading and covered fund provisions, and eliminate the quantitative metrics regime, among others.
“While we continue to believe the Volcker Rule is a solution in search of a problem, SIFMA appreciates the growing recognition by the Volcker Agencies of the problems with the current implementing regulations," said Kenneth Bentsen, SIFMA president and CEO.
“We remain concerned that the current regulatory framework goes beyond statutory intent and is overly restrictive, impeding beneficial market activity at the expense of the economy, and ultimately consumers.”
“SIFMA fully supports the efforts of the Volcker Agencies to streamline and simplify the implementing regulations, and offers our members’ recommendations on necessary revisions to achieve this goal.”
Responding to the Office of the Comptroller of the Currency’s (OCC’s) request for comments on the rule, SIFMA said: “[the rule] should be revised to better accomplish the purposes of the underlying statute and its impact on the efficient functioning of markets to facilitate growth.”
SIFMA added that, the complexity of implementing regulations, and the difficulties inherent in having five agencies tasked with implementing and interpreting the regulations, mean that many key interpretive issues remain unresolved.
In its letter to the OCC, SIFMA set out several recommendations for reform, including, revise the definition of proprietary trading to focus on speculative short-term standalone proprietary trading and simplifying the prescriptive compliance obligations of the proprietary trading and covered fund provisions, and eliminate the quantitative metrics regime, among others.
“While we continue to believe the Volcker Rule is a solution in search of a problem, SIFMA appreciates the growing recognition by the Volcker Agencies of the problems with the current implementing regulations," said Kenneth Bentsen, SIFMA president and CEO.
“We remain concerned that the current regulatory framework goes beyond statutory intent and is overly restrictive, impeding beneficial market activity at the expense of the economy, and ultimately consumers.”
“SIFMA fully supports the efforts of the Volcker Agencies to streamline and simplify the implementing regulations, and offers our members’ recommendations on necessary revisions to achieve this goal.”
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