{
  "slug": "volcker-rule",
  "name": "Volcker Rule",
  "aliases": [
    "§619",
    "Bank Holding Company Act §13"
  ],
  "jurisdiction": "US",
  "regulator": "FRB, OCC, FDIC, SEC, CFTC",
  "kind": "rule",
  "effective_date": "2014-04-01",
  "summary": "Section 619 of Dodd-Frank, codified as §13 of the Bank Holding Company Act, prohibiting banking entities from engaging in short-term proprietary trading and from sponsoring/investing in 'covered funds' (most hedge funds and private equity funds). Final rule simplified in 2020 ('Volcker 2.0').",
  "scope": "Banking entities and their affiliates.",
  "key_provisions": [
    {
      "section": "Proprietary trading ban",
      "summary": "Bans short-term proprietary trading subject to permitted-activity exceptions (market-making, underwriting, hedging, government securities)."
    },
    {
      "section": "Covered funds restriction",
      "summary": "Restricts sponsorship of and investment in 'covered funds' (3(c)(1)/3(c)(7) funds), with seeding and de-minimis allowances."
    }
  ],
  "thresholds": [
    {
      "name": "De-minimis investment limit (per fund)",
      "value": 3,
      "unit": "%"
    },
    {
      "name": "De-minimis aggregate limit",
      "value": 3,
      "unit": "% of Tier 1 capital"
    }
  ],
  "applies_to": [
    "banking entities"
  ],
  "related_regulations": [
    "dodd-frank",
    "investment-company-act-1940"
  ],
  "related_terms": [
    "covered-fund",
    "proprietary-trading",
    "market-making",
    "tier-1-capital"
  ],
  "official_text_url": "https://www.federalreserve.gov/supervisionreg/legalinterpretations/volcker-rule.htm",
  "history": "Named for former Fed Chair Paul Volcker. Final rule adopted Dec 2013, effective April 2014. 'Volcker 2.0' simplification finalized Aug 2019 (effective Jan 2020); covered-funds amendments finalized June 2020."
}