Speech by SEC Commissioner:
Statement at Open Meeting to Propose Rules Regarding Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships with, Hedge Funds and Private Equity Funds (the "Volcker Rule")
Commissioner Troy A. Paredes
U.S. Securities and Exchange Commission
October 12, 2011
Thank you, Chairman Schapiro.
The recommendation before us is to propose rule amendments to implement the “Volcker Rule” pursuant to Section 619 of Dodd-Frank. I am willing to support the recommendation in the interest of getting the benefit of commenters’ input, but I have significant reservations with the proposal.
Instead of engaging the particulars, let me bottom-line four of my primary concerns with the proposal. I am concerned, first, that market making-related activities and underwriting will be curtailed at the expense of liquidity and capital formation; second, that the Volcker Rule’s extraterritorial reach will put U.S. banking entities at a competitive disadvantage internationally; third, that the compliance burden and cost will prove to be excessive; and fourth, that the terms “hedge fund” and “private equity fund” were not narrowed to exclude venture capital funds from the restrictions placed on a banking entity’s covered fund activities.
Much has been and will be said about the Volcker Rule, and I very much look forward to hearing from commenters.
Again, thank you to the staff for all of your efforts on this rulemaking.