The Federal Reserve Board on Wednesday announced that it had approved an extended transition period of up to five years for Deutsche Bank AG, SVB Financial Group, and UBS Group AG to conform investments in certain "illiquid funds" to the requirements of section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly known as the Volcker rule.
Section 619 generally prohibits banking entities from engaging in proprietary trading and from acquiring or retaining ownership interests in, sponsoring, or having certain relationships with a hedge fund or private equity fund. These prohibitions are subject to a number of statutory exemptions and restrictions.
The Dodd-Frank Act permits the Board, upon an application by a banking entity, to provide up to an additional five years to conform investments in a narrow class of certain legacy illiquid funds where the banking entity had a contractual commitment to invest in the fund that was in effect on May 1, 2010.
In December 2016, the Board published guidelines describing how firms should seek an extension. This extended transition period for certain legacy illiquid funds is the last conformance period extension that the Board is authorized under the statute to provide banking entities.
Today's action relates only to the conformance period for illiquid funds. Attached are the Board's orders related to these actions.
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