Five federal financial regulatory agencies announced that they will not take action under the Volcker Rule for qualifying foreign excluded funds for a period of one year while they review Volcker Rule regulations to ensure that excluded funds do not become subject to the rule. The agencies include the Federal Reserve Board, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Securities and Exchange Commission, and Commodity Futures Trading Commission.

In their joint press release, the agencies explain that complexities in section 619 of the Dodd-Frank Act and its implementing regulations may result in certain foreign excluded funds becoming subject to regulation because of governance arrangements with or investments by a foreign bank. As a result, a number of foreign banking entities, foreign government officials, and other market participants have expressed concern about possible unintended consequences and extraterritorial impact.

A statement released by the Fed, FDIC, and OCC, noted that their staffs are considering ways in which the implementing regulation may be amended, or other appropriate action may be taken, to address any unintended consequences of the Volcker Rule for foreign excluded funds in foreign jurisdictions. The agencies also clarified that their current announcement does not otherwise modify the rules implementing section 619 and is limited to certain foreign excluded funds that may be subject to the Volcker Rule and implementing regulations due to their relationships with or investments by foreign banking entities.