On June 25, financial regulatory agencies modified the Volcker rule’s prohibition on banking entities investing in or sponsoring hedge funds or private equity funds, known as covered funds. The final rule permits banking entities to offer financial services and engage in other activities that fall outside of the issues that the rule was intended to address, and it streamlines the covered funds portion of the rule. The rule will be effective as of October 1. Release. Final Rule.
Michael Barnier, the European commissioner overseeing financial services, has used the opportunity of speaking before an audience in London on 4 November 2011 to highlight the commission’s view on the key areas of progress in the development of European Financial Regulation and to address growing concerns that increased integration within the euro-zone will isolate or penalise EU member states who are not subscribed to the single currency.
The key areas of regulatory development referred to in the speech included:
European Commission: Press release (SPEECH/11/721) (4 November 2011).
On July 27, the FSA published a report assessing possible sources of systemic risk from hedge funds. The report finds that hedge funds currently pose only a limited risk to the financial stability of the UK. FSA Report.
