RT Journal Article
SR Electronic
T1 The Final Volcker Rule—Impact on
Securitization Transactions
JF The Journal of Structured Finance
FD Institutional Investor Journals
SP 13
OP 18
DO 10.3905/jsf.2014.20.1.013
VO 20
IS 1
A1 J. Paul Forrester
A1 Carol Hitselberger
A1 J. Bradley Keck
A1 David Sahr
YR 2014
UL https://pm-research.com/content/20/1/13.abstract
AB On December 10, 2013, the Federal financial agencies issued the joint final regulation implementing Section 619 of the Dodd–Frank Act, commonly known as the “Volcker Rule.” This article addresses the impact of the final regulation on securitization activities and therefore focuses on the prohibition on covered funds activities and certain of the exceptions thereto. The final regulation provides for 14 separate exclusions from the definition of covered funds, including the loan securitization, qualifying asset-backed commercial paper (ABCP), qualifying covered bond, and wholly-owned subsidiary exclusions. Although securitization transactions generally do not utilize entities that would be regarded as private equity funds or hedge funds and the statutory text of the Volcker Rule expressly required that the final regulation not prohibit the securitization of loans, the final regulation will impact certain securitizations in a material way due to the breadth of the definition of covered funds.TOPICS: Fixed income and structured finance, legal/regulatory/public policy