The US Chamber of Commerce has issued a report calling for Congress to replace the controversial Volcker rule with more “meaningful financial regulatory reform”.
Since its introduction in 2010 via Dodd-Frank, the private equity industry has criticized the Volcker rule's opaqueness and limitations on banks' relationship with private equity funds.
The Chamber of Commerce, which represents US business interests, was unavailable for comment by press time on how much influence it believes the report will have on congressional action. However the chamber is known for having the ear of Republican lawmakers, some of whom have already called for reforms to the Volcker rule.
In its report, the chamber says the Volker Rule “has been appropriately delayed because nobody can agree on a simple definition of the problem they are trying to solve!”. The rule was originally due in July 2012, but banking regulators have
The Dodd-Frank Act instructed regulators to restrict banks from trading off their own accounts as well as limit their investments in private funds to no more than 3 percent of any one fund’s capital. It is that former requirement that regulators have particularly struggled to define, according to sources.
The chamber's paper makes no specific mention of private equity, but argues the entire rule should be replaced with one that simply sets higher capital requirements for financial services firms that engage in proprietary trading.
In another area oThe SEC's Whistleblower program should be amended so that any wrongdoer convicted of a crime ineligible for an award. This is stop the program undermining compliance programs, argues the paper.
The chamber also argued against the extraterritorial scope of domestic regulations. PE Manager previously reported that the Volcker rule could be seen as a ‘remarkable extension of US regulatory jurisdiction’ over foreign banks.