{"id":39760,"date":"2013-12-30T06:27:59","date_gmt":"2013-12-30T11:27:59","guid":{"rendered":"http:\/\/www.hedgeco.net\/news\/?p=39760"},"modified":"2013-12-30T06:39:02","modified_gmt":"2013-12-30T11:39:02","slug":"hedge-fund-regulation-banks-want-cdo-exception-to-volcker-rule","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/12\/2013\/hedge-fund-regulation-banks-want-cdo-exception-to-volcker-rule.html","title":{"rendered":"Hedge Fund Regulation: Banks Want CDO Exception To Volcker Rule"},"content":{"rendered":"<p><a href=\"http:\/\/www.hedgeco.net\/news\/wp-content\/uploads\/2013\/12\/American-bank.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright size-medium wp-image-39763\" alt=\"American-bank\" src=\"http:\/\/www.hedgeco.net\/news\/wp-content\/uploads\/2013\/12\/American-bank-300x198.jpg\" width=\"300\" height=\"198\" srcset=\"https:\/\/hedgeco.net\/news\/wp-content\/uploads\/2013\/12\/American-bank-300x198.jpg 300w, https:\/\/hedgeco.net\/news\/wp-content\/uploads\/2013\/12\/American-bank.jpg 340w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a>New York (HedgeCo.Net) &#8211; The SEC and other federal regulars are reviewing whether or not certain CDOs backed by trust preferred securities should be subjected to new regulation under the final Volcker rules.<\/p>\n<p>Reuters reports that this would be the first &#8220;tweak&#8221; to the new legislation known as the &#8220;Volcker rule,&#8221; which\u00a0prohibits banking entities (and their investments in hedge funds) from making risky bets that solely benefit the banks and not the investor.\u00a0The legislation comes into effect April 1, 2014.<\/p>\n<p>The American Bankers Association filed a lawsuit warning of heavy losses if banks are forced to sell certain complex CDOs, Reuters reports.<\/p>\n<p>&#8220;At stake are so-called collateralized debt obligations backed by trust preferred securities \u2014 or TruPS CDOs \u2014 which have hybrid characteristics of both debt and equity and can get a favorable tax treatment&#8230;.\u00a0The regulators have to reply to the banks in court before 9 a.m. EST Monday [Dec. 30], but it was unclear whether the statement would alter the course of the lawsuit, in which the banks had asked for a stay of the relevant part of the rule,&#8221; Reuters says.<\/p>\n<p>The SEC said it intends to address the matter no later than January 15, 2014.<\/p>\n<p>The\u00a0Volcker Rule\u00a0is a specific section of the\u00a0Dodd\u2013Frank Wall Act\u00a0originally proposed by economist and former Federal Reserve\u00a0Chairman\u00a0Paul Volcker\u00a0to restrict banks from making certain kinds of\u00a0speculative\u00a0investments that do not benefit their customers.<\/p>\n<p>Volcker argued that such speculative activity played a key role in the\u00a0financial crisis of 2007\u20132010. The rule is often referred to as a ban on\u00a0proprietary trading\u00a0by commercial banks, whereby deposits are used to trade on the bank&#8217;s own accounts, although a number of exceptions to this ban were included in the Dodd-Frank law.<\/p>\n<p>Alex Akesson<br \/>\nEditor for\u00a0<a title=\"hedge funds\" href=\"http:\/\/www.hedgeco.net\/\">HedgeCo.net<\/a><br \/>\n<a href=\"mailto:alex@hedgeco.net\">alex@hedgeco.net<\/a><br \/>\n<a title=\"hedge fund\" href=\"http:\/\/www.hedgeco.net\/\">HedgeCo.Net<\/a>\u00a0is a premier\u00a0<a title=\"hedge fund database\" href=\"http:\/\/www.hedgeco.net\/\">hedge fund database<\/a>\u00a0and community for qualified and accredited investors only. Membership in\u00a0<a title=\"hedge fund\" href=\"http:\/\/www.hedgeco.net\/\">HedgeCo.net<\/a>\u00a0is FREE and EASY. We also offer FREE LISTINGS for\u00a0<a title=\"hedge fund\" href=\"http:\/\/www.hedgeco.net\/\">Hedge Funds<\/a>!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>New York (HedgeCo.Net) &#8211; The SEC and other federal regulars are reviewing whether or not certain CDOs backed by trust preferred securities should be subjected to new regulation under the final Volcker rules. Reuters reports that this would be the [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12,16044,3],"tags":[],"class_list":["post-39760","post","type-post","status-publish","format-standard","hentry","category-hedge-fund-regulation","category-hedge-fund-strategies-2","category-hedgeco-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/39760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=39760"}],"version-history":[{"count":6,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/39760\/revisions"}],"predecessor-version":[{"id":39768,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/39760\/revisions\/39768"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=39760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=39760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=39760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}