SlideShare a Scribd company logo
THE VOLCKER RULE AND THE CHALLENGES AHEAD
BY OSCAR VANEGAS - SENIOR REGULATORY AND COMPLIANCE CONSULTANT
1
BACKGROUND
2
• The Volker Rule was constituted as section 619 of the Dodd-Frank Wall Street
Reform and Consumer Protection Act
• Final ruling was implemented on December 10th, 2013 by five federal agencies –
the Federal Reserve, the Office of the Comptroller of the Currency (OCC), the
Federal Deposit Insurance Corporation (FDIC), the Securities and Exchange
Commission (SEC) and the Commodity Future Trading Commission (CFTC)
• In its core principle, the rule was implemented to promote and enhance the safety
and soundness of banking entities; protect taxpayers and consumers and promote
financial stability by minimizing the risk associated with unsafe and unsound
activities
• The rule introduces a tiered compliance program that requires enhanced
processes and controls; banks with the largest trading businesses have began
reporting quantitative measurements on June 30, 2014 and bring trading activities
into full compliance by July 21, 2015
OVERVIEW
3
• The rule is intended to reduce the risks associated with short-term proprietary trading and limits
investment activities in covered funds, prohibiting the acquisition and retention of any equity,
partnership, or other ownership interest in or sponsor a hedge fund or a private equity fund
• What is proprietary trading? - engaging as a principal for the trading account of the banking
entity in any purchase or sale of one or more financial instruments
• What is “sponsoring”? - generally serving as GP, managing member or trustee, electing or
controlling majority of directors, trustees or management of fund sharing name with the
covered fund
• The final rule includes critical refinements that reduces the threat to market liquidity, trading
revenues, and the safety and soundness of the covered banking entities and other
systematically important financial institutions (SIFI)
• Coverage of activities conducted within the limits of the United States and its affiliated territories
• Coverage of transactions performed by foreign banking agencies that derived a considerably
portion of their profits while being conducted within the limits of the United Sates, or that such
covered transactions involve the participation therein of a U.S Citizen
CHALLENGES - THE BUSINESS MODEL
4
Covered Activities –
Business Model Re-
design
The core principles affected: investment
compliance, funding through market-making and
profitability of proprietary trading activities
• Maintain a very limited inventory  Bank
customers will have lower market liquidity for
their securities  higher financing costs
diminishing credit access
• Reduction in market making will obstruct the
ability to determine the quality of securitized
loans and the offering of credit facilities
New operational and risk management conditions:
identify transactions where the institution is taking
principal market risk from speculative proprietary
trading or investment risk – risk metrics and
reporting at the trading desk level
CHALLENGES – COMMITMENT IN CAPITAL INVESTMENTS AND
RESOURCES
5
Considerable efforts in
Capital Investment,
Human Capital and
Resources
• Design and implement an enhanced
compliance program
• Risk Metrics and Reporting
• Auditing activities and training of trading
personnel
• Reassessment of liquidity, market and
counterparty risk models  enhanced capital
requirements Base III and CCAR
• Mitigate exposure to illiquid markets in
“stressed” conditions  considerable swings
in volatilities in the markets
• dramatic changes in portfolio Value-at-Risk
measurements
Identification and Controls of covered activities:
• Serving as market makers and underwriters
only to meet the near term demands of
customers
• Standing ready to cover an incomplete side of a
trade
• Hurdles to arbitrage trading activities that
promote liquidity or price transparency
CHALLENGES – TECHNOLOGICAL CAPACITY AND STRUCTURE
6
Enhanced data provisioning
and market intelligence
systems
Identification, segregation and
delivering at the transactional
level
(including non-U.S txns)
Enhanced
Technological
Structure
Revamped
Technical
Capacity
Consolidate data
warehousing
Top-of-the-line transactional
data systems
Audit trials across multiple
trading desks
Consolidation of KRI and
metrics
Risk Management models
Validation
Advanced regulatory and
management reporting
Trading desks’ transactional
volume and income
generation
Trading personnel training
and systems’ support
CHALLENGES – BUSINESS PROFITABILITY, STAFF COMPENSATION AND
COMPETITIVENESS
7
Consolidate data
warehousing
Top-of-the-line transactional
data systems
Audit trials across multiple
trading desks
Consolidation of KRI and
metrics
Risk Management models
Validation
Advanced regulatory and
management reporting
Trading desks’ transactional
volume and income
generation
Trading personnel training
and systems’ support
• Minimum scope to profit from products’ inventories (market-
maker inventory is designed not to exceed the reasonably
expected near term demands of clients)
• Limited opportunities to profit from market movements and
volatilities
• Potential losses through incomplete trades
Business
Profitability
• Compensation schemes focused on trading volumes as
opposed to the more attractive profitability of the institution’s
own trading books
• Losing talented traders to the non-regulated hedge fund
industry
Compensatio
n
• Reduced global trading market restricted by extraterritorial
reach
• Restrictions to participate in OTC markets
• Considerable investments in technology, systems, audits,
controls and enhanced compliance programs
• Funding of investment vehicles going to unregulated markets
Competitivenes
s
COMPLIANCE PROGRAM – ILLUSTRATIVE STRUCTURE OF THE ENHANCED
COMPLIANCE PROGRAM
8
Governance
Senior Management CEO Board of Directors
• Approve, implement & enforce
• Periodic review for effectiveness
• Remediation and Board reporting
• Attestation that processes are in place
to ensure compliance with final rule
• Establish culture of compliance
• Supervise senior management team
• Align resources & incentives
• Approve program
Risk Management Analytics & Reporting Legal and Compliance
• Risk limit framework
• Robust analytics to set risk limits
• Model validation & documentation
• Exception policy (and monitoring)
• Escalation procedures
• Production & monitoring of metrics
• Robust analytics to set thresholds
• Exception policy (and monitoring)
• Escalation procedures
• Reporting
• Training
• Recordkeeping
• Conflicts of interest
• Remediation
Front Office Controls
• Define mission (i.e. trading activity) and strategy (i.e. trading method) for each trading desk
• Define authorized activities, products, and counterparties for each trading desk
• Policies and procedures for establishing limits, measuring activity, and enforcing compliance
• Policies and procedures for compensation, limiting incentives for prohibited proprietary trading or excessive risk taking
Independent Testing, Auditing and Staff Training
COMPLIANCE PROGRAM DESCRIPTION
9
INTERNAL POLICIES AND PROCEDURES: written policies and procedures reasonably
designed to document, describe, monitor and limit exempted trading activities conducted
by the banking entity
INTERNAL CONTROLS & MANAGEMENT FRAMEWORK—RESPONSIBILITYAND
ACCOUNTABILITY that clearly delineates responsibility and accountability; includes
appropriate review of trading limits, strategies, hedging activities, investments, incentive
compensation
INDEPENDENT TESTING and internal audit of the effectiveness of the compliance
program conducted periodically by qualified personnel of the banking entity or by a
qualified outside party
TRAINING for trading staff and managers, as well as other appropriate personnel, to
effectively implement and enforce the compliance program.
RECORDKEEPING sufficient to demonstrate compliance, which a banking entity must
promptly provide to regulators upon request and retain for a period of no fewer than 5
years. This must include records in connection with risk-mitigating hedging, underwriting
and market making permitted activities
REPORTING METRICS
10
Consolidate data
warehousing
Top-of-the-line transactional
data systems
Audit trials across multiple
trading desks
Consolidation of KRI and
metrics
Risk Management models
Validation
Advanced regulatory and
management reporting
Trading desks’ transactional
volume and income
generation
Trading personnel training
and systems’ support
• Risk and Position Limits and Usage
• Risk Factor Sensitivities
• Value at Risk (VaR) and Stress Value at Risk (Stress
VaR)
Risk Management
• Comprehensive Profit and Loss AttributionSource of Revenue
• Inventory Turnover
• Inventory Aging
• Customer-Facing Trade Ratio – Trade Count Based
and Value Based
Customer-Facing
Activity
CONCLUDING OBSERVATIONS
11
Consolidate data
warehousing
Top-of-the-line transactional
data systems
Audit trials across multiple
trading desks
• Increased market volatility, price uncertainty and the reduced capacity for
institutions to raise capital and/or hedge risk
• Impaired U.S. competitiveness, and potential vulnerability to legal challenges,
given the rule’s global scope of prohibitions
• Vulnerabilities around liquity, credit availability, funding and market & investment
risks
• Dedicate a considerable portion of their capital investments and resources to
address and implement all required elements in the final rule
• Compromise time and resources to coordinated several tasks with deferent
objectives between business strategy, compliance, finance and technology
• Business units consultative support is critical to implement a firm-wide Volcker
framework to ensure the complete validation and attestation of the covered
baking entities’ trading and fund investment businesses with the compliance
controls set-forth by the federal agencies.
APPENDIX
12
KEY PROCEDURES AND LOGISTICS
13
Reporting Required / Optional
Reporting Required: metrics in respect of trading conducted
pursuant to the underwriting-related, market making-related,
risk-mitigating hedging and U.S./foreign government obligation
permitted activities
Reporting optional: metrics in respect of trading excluded from
the scope of proprietary trading, on behalf of customers,
regulated insurance company or foreign bank permitted
activities
Level of Measurement
Metrics reporting at the single trading desk level; each trading
desk, defined as the smallest discrete unit that purchases or
sells financial instruments for the trading account of the
banking entity or an affiliate of the banking entity.
Regulatory Reporting Frequency
For banking entities with $50 billion or more in trading assets
and liabilities: for each calendar month, within 30 days of the
end of the relevant month (beginning with information for
January 2015, within 10 days of month end)
For other banking entities: for each calendar quarter, within 30
days of quarter end
Record Retention
5 years; records documenting preparation/content of reports
submitted
TIMING AND APPLICABILITY OF COMPLIANCE PROGRAM AND METRICS
REPORTING
14
STANDARD COMPLIANCE PROGRAM– NO METRICS for Banking entities with more than
$10 billion but less than $50 billion of total consolidated assets and less than $10 billion of
trading assets and liabilities Compliance required: July 21, 2015
ENHANCED COMPLIANCE PROGRAM– NO METRICS for Banking entities with $50 billion
or more of total consolidated assets but less than $10 billion of trading assets and liabilities.
Compliance required: July 21, 2015
• ENHANCED COMPLIANCE PROGRAM WITH METRICS for Banking entities with total
consolidated assets of $50 billion or more, enhanced program effective: July 21, 2015
• Phase-in for metrics reporting requirements for banking entities with $10 billion or more in
trading assets and liabilities:
• For those with trading assets and liabilities of $50 billion or more: metrics June 30, 2014
• For those with trading assets and liabilities of between $25 billion and $50 billion: metrics
April 30, 2016
• For those with trading assets and liabilities of between $10 billion and $25 billion metrics
December 31, 2016

More Related Content

What's hot

Operational risk management and measurement
Operational risk management and measurementOperational risk management and measurement
Operational risk management and measurement
Rahmat Mulyana
 
Operational Risk Management under BASEL era
Operational Risk Management under BASEL eraOperational Risk Management under BASEL era
Operational Risk Management under BASEL era
Treat Risk
 
2008 Investment Symposium Zhang 3 24 08
2008 Investment Symposium Zhang 3 24 082008 Investment Symposium Zhang 3 24 08
2008 Investment Symposium Zhang 3 24 08
Frank Zhang
 
Operational risk ppt
Operational risk pptOperational risk ppt
Operational risk ppt
NehaKamboj10
 
Riskpro - Operational Risk Management
Riskpro - Operational Risk ManagementRiskpro - Operational Risk Management
Riskpro - Operational Risk Management
Manoj Jain
 
Building out a Robust and Efficient Risk Management - Alan Cheung
Building out a Robust and Efficient Risk Management - Alan CheungBuilding out a Robust and Efficient Risk Management - Alan Cheung
Building out a Robust and Efficient Risk Management - Alan Cheung
László Árvai
 
Volcker Rule Compliance: Preparing for the Long Haul
Volcker Rule Compliance: Preparing for the Long Haul Volcker Rule Compliance: Preparing for the Long Haul
Volcker Rule Compliance: Preparing for the Long Haul
Cognizant
 
Operational Risk function in 1st line
Operational Risk function in 1st lineOperational Risk function in 1st line
Operational Risk function in 1st line
László Árvai
 
Head of Credit Risk JD-
Head of Credit Risk JD-Head of Credit Risk JD-
Head of Credit Risk JD-Khairi Melhim
 
Operational Risk for Bank
Operational Risk for BankOperational Risk for Bank
Operational Risk for Bank
Rahmat Mulyana
 
Operational Risk Management Under Basel II & Basel III
Operational Risk Management Under Basel II & Basel IIIOperational Risk Management Under Basel II & Basel III
Operational Risk Management Under Basel II & Basel III
Eneni Oduwole
 
Third-Party Risk Management: A Case Study in Oversight
Third-Party Risk Management: A Case Study in OversightThird-Party Risk Management: A Case Study in Oversight
Third-Party Risk Management: A Case Study in Oversight
NICSA
 
10 Key Principles of Operational Risk Management
10 Key Principles of Operational Risk Management10 Key Principles of Operational Risk Management
10 Key Principles of Operational Risk Management
Colleen Beck-Domanico
 
Introduction to Electronic Financial Market Structure
Introduction to Electronic Financial Market StructureIntroduction to Electronic Financial Market Structure
Introduction to Electronic Financial Market Structure
Paolo Zagaglia
 
Webinar – Pricing & Regulations: Will you be able to justify your valuations ...
Webinar – Pricing & Regulations: Will you be able to justify your valuations ...Webinar – Pricing & Regulations: Will you be able to justify your valuations ...
Webinar – Pricing & Regulations: Will you be able to justify your valuations ...
aimsoftware
 
The Facts About Managed Futures
The Facts About Managed FuturesThe Facts About Managed Futures
The Facts About Managed Futures
ManagedFunds
 
Nepal Banking Risk Management March 2015 for senior Rastraiya Banijya Bank em...
Nepal Banking Risk Management March 2015 for senior Rastraiya Banijya Bank em...Nepal Banking Risk Management March 2015 for senior Rastraiya Banijya Bank em...
Nepal Banking Risk Management March 2015 for senior Rastraiya Banijya Bank em...
Chiang Mai University School of Public Policy
 

What's hot (20)

Operational risk management and measurement
Operational risk management and measurementOperational risk management and measurement
Operational risk management and measurement
 
Operational Risk Management under BASEL era
Operational Risk Management under BASEL eraOperational Risk Management under BASEL era
Operational Risk Management under BASEL era
 
2008 Investment Symposium Zhang 3 24 08
2008 Investment Symposium Zhang 3 24 082008 Investment Symposium Zhang 3 24 08
2008 Investment Symposium Zhang 3 24 08
 
geninsupdatemay2016
geninsupdatemay2016geninsupdatemay2016
geninsupdatemay2016
 
Operational risk ppt
Operational risk pptOperational risk ppt
Operational risk ppt
 
Riskpro - Operational Risk Management
Riskpro - Operational Risk ManagementRiskpro - Operational Risk Management
Riskpro - Operational Risk Management
 
Building out a Robust and Efficient Risk Management - Alan Cheung
Building out a Robust and Efficient Risk Management - Alan CheungBuilding out a Robust and Efficient Risk Management - Alan Cheung
Building out a Robust and Efficient Risk Management - Alan Cheung
 
Volcker Rule Compliance: Preparing for the Long Haul
Volcker Rule Compliance: Preparing for the Long Haul Volcker Rule Compliance: Preparing for the Long Haul
Volcker Rule Compliance: Preparing for the Long Haul
 
Operational Risk function in 1st line
Operational Risk function in 1st lineOperational Risk function in 1st line
Operational Risk function in 1st line
 
Head of Credit Risk JD-
Head of Credit Risk JD-Head of Credit Risk JD-
Head of Credit Risk JD-
 
Operational Risk for Bank
Operational Risk for BankOperational Risk for Bank
Operational Risk for Bank
 
Operational Risk Management Under Basel II & Basel III
Operational Risk Management Under Basel II & Basel IIIOperational Risk Management Under Basel II & Basel III
Operational Risk Management Under Basel II & Basel III
 
Third-Party Risk Management: A Case Study in Oversight
Third-Party Risk Management: A Case Study in OversightThird-Party Risk Management: A Case Study in Oversight
Third-Party Risk Management: A Case Study in Oversight
 
Funds Transfer Pricing
Funds Transfer PricingFunds Transfer Pricing
Funds Transfer Pricing
 
10 Key Principles of Operational Risk Management
10 Key Principles of Operational Risk Management10 Key Principles of Operational Risk Management
10 Key Principles of Operational Risk Management
 
People risk collateral 2013
People risk collateral 2013People risk collateral 2013
People risk collateral 2013
 
Introduction to Electronic Financial Market Structure
Introduction to Electronic Financial Market StructureIntroduction to Electronic Financial Market Structure
Introduction to Electronic Financial Market Structure
 
Webinar – Pricing & Regulations: Will you be able to justify your valuations ...
Webinar – Pricing & Regulations: Will you be able to justify your valuations ...Webinar – Pricing & Regulations: Will you be able to justify your valuations ...
Webinar – Pricing & Regulations: Will you be able to justify your valuations ...
 
The Facts About Managed Futures
The Facts About Managed FuturesThe Facts About Managed Futures
The Facts About Managed Futures
 
Nepal Banking Risk Management March 2015 for senior Rastraiya Banijya Bank em...
Nepal Banking Risk Management March 2015 for senior Rastraiya Banijya Bank em...Nepal Banking Risk Management March 2015 for senior Rastraiya Banijya Bank em...
Nepal Banking Risk Management March 2015 for senior Rastraiya Banijya Bank em...
 

Viewers also liked

Conflict Minerals Overview by KPMG
Conflict Minerals Overview by KPMGConflict Minerals Overview by KPMG
Conflict Minerals Overview by KPMG
Rare Earths / Rare Metals
 
صناديق الاستثمار الإسلامية
صناديق الاستثمار الإسلاميةصناديق الاستثمار الإسلامية
صناديق الاستثمار الإسلاميةHisham Jabr
 
SEC compliance and disclosure, Form 8-K (sample)
SEC compliance and disclosure, Form 8-K  (sample)SEC compliance and disclosure, Form 8-K  (sample)
SEC compliance and disclosure, Form 8-K (sample)
Arthur Mboue
 
Belajar html
Belajar htmlBelajar html
Belajar htmlMURROBI
 
International financial institutes in crisis
International financial institutes in crisisInternational financial institutes in crisis
International financial institutes in crisis
Arthur Mboue
 
Rule 144-is she -affiliate
Rule 144-is she -affiliateRule 144-is she -affiliate
Rule 144-is she -affiliateArthur Mboue
 
Face the Nation Transcripts December 28, 2014: Sullenberger, Bratton, Giulian...
Face the Nation Transcripts December 28, 2014: Sullenberger, Bratton, Giulian...Face the Nation Transcripts December 28, 2014: Sullenberger, Bratton, Giulian...
Face the Nation Transcripts December 28, 2014: Sullenberger, Bratton, Giulian...
strangesuccesso29
 
Assessing ABS players table
Assessing ABS players tableAssessing ABS players table
Assessing ABS players tableArthur Mboue
 
Ava puppies
Ava puppiesAva puppies
Ava puppies
MrsD3rdGrade
 
Evolutia invatamantului
Evolutia invatamantuluiEvolutia invatamantului
Evolutia invatamantului
sandudoina
 
Concept release -Disclosure Effectiveness Initiative (Risk and Risk Management)
Concept release -Disclosure Effectiveness Initiative (Risk and Risk Management)Concept release -Disclosure Effectiveness Initiative (Risk and Risk Management)
Concept release -Disclosure Effectiveness Initiative (Risk and Risk Management)
Arthur Mboue
 
Evolution of Clinical Alarms and Text Messaging in Healthcare Communications
Evolution of Clinical Alarms and Text Messaging in Healthcare CommunicationsEvolution of Clinical Alarms and Text Messaging in Healthcare Communications
Evolution of Clinical Alarms and Text Messaging in Healthcare Communications
Extension Healthcare
 
Schedule 14-A disclosure, Fast Filing
Schedule 14-A disclosure, Fast FilingSchedule 14-A disclosure, Fast Filing
Schedule 14-A disclosure, Fast Filing
Arthur Mboue
 
Chronological events impacting securities regulation
Chronological events impacting securities regulationChronological events impacting securities regulation
Chronological events impacting securities regulation
Arthur Mboue
 
Concept release comment s x
Concept release comment s xConcept release comment s x
Concept release comment s x
Arthur Mboue
 
1705 JacobStone 2016 catalogue No prices
1705 JacobStone 2016 catalogue No prices1705 JacobStone 2016 catalogue No prices
1705 JacobStone 2016 catalogue No pricesEmma Krestin
 
The state of sec disclosure effectiveness its history
The state of sec disclosure effectiveness   its historyThe state of sec disclosure effectiveness   its history
The state of sec disclosure effectiveness its history
Arthur Mboue
 

Viewers also liked (20)

Conflict Minerals Overview by KPMG
Conflict Minerals Overview by KPMGConflict Minerals Overview by KPMG
Conflict Minerals Overview by KPMG
 
صناديق الاستثمار الإسلامية
صناديق الاستثمار الإسلاميةصناديق الاستثمار الإسلامية
صناديق الاستثمار الإسلامية
 
SEC compliance and disclosure, Form 8-K (sample)
SEC compliance and disclosure, Form 8-K  (sample)SEC compliance and disclosure, Form 8-K  (sample)
SEC compliance and disclosure, Form 8-K (sample)
 
Belajar html
Belajar htmlBelajar html
Belajar html
 
International financial institutes in crisis
International financial institutes in crisisInternational financial institutes in crisis
International financial institutes in crisis
 
Rule 144-is she -affiliate
Rule 144-is she -affiliateRule 144-is she -affiliate
Rule 144-is she -affiliate
 
Face the Nation Transcripts December 28, 2014: Sullenberger, Bratton, Giulian...
Face the Nation Transcripts December 28, 2014: Sullenberger, Bratton, Giulian...Face the Nation Transcripts December 28, 2014: Sullenberger, Bratton, Giulian...
Face the Nation Transcripts December 28, 2014: Sullenberger, Bratton, Giulian...
 
Assessing ABS players table
Assessing ABS players tableAssessing ABS players table
Assessing ABS players table
 
Productos del Ecuador
Productos del EcuadorProductos del Ecuador
Productos del Ecuador
 
Ava puppies
Ava puppiesAva puppies
Ava puppies
 
Blacksmith Surgical
Blacksmith SurgicalBlacksmith Surgical
Blacksmith Surgical
 
Evolutia invatamantului
Evolutia invatamantuluiEvolutia invatamantului
Evolutia invatamantului
 
Concept release -Disclosure Effectiveness Initiative (Risk and Risk Management)
Concept release -Disclosure Effectiveness Initiative (Risk and Risk Management)Concept release -Disclosure Effectiveness Initiative (Risk and Risk Management)
Concept release -Disclosure Effectiveness Initiative (Risk and Risk Management)
 
Evolution of Clinical Alarms and Text Messaging in Healthcare Communications
Evolution of Clinical Alarms and Text Messaging in Healthcare CommunicationsEvolution of Clinical Alarms and Text Messaging in Healthcare Communications
Evolution of Clinical Alarms and Text Messaging in Healthcare Communications
 
itpartner365v2en
itpartner365v2enitpartner365v2en
itpartner365v2en
 
Schedule 14-A disclosure, Fast Filing
Schedule 14-A disclosure, Fast FilingSchedule 14-A disclosure, Fast Filing
Schedule 14-A disclosure, Fast Filing
 
Chronological events impacting securities regulation
Chronological events impacting securities regulationChronological events impacting securities regulation
Chronological events impacting securities regulation
 
Concept release comment s x
Concept release comment s xConcept release comment s x
Concept release comment s x
 
1705 JacobStone 2016 catalogue No prices
1705 JacobStone 2016 catalogue No prices1705 JacobStone 2016 catalogue No prices
1705 JacobStone 2016 catalogue No prices
 
The state of sec disclosure effectiveness its history
The state of sec disclosure effectiveness   its historyThe state of sec disclosure effectiveness   its history
The state of sec disclosure effectiveness its history
 

Similar to Volcker Rule Challenges for Covered Banking Entities

Regulatory Impact Assessment in the Global Market
Regulatory Impact Assessment in the Global MarketRegulatory Impact Assessment in the Global Market
Regulatory Impact Assessment in the Global Market
Maryam Hidayatallah CPFA,MIPA,MA,CICA
 
CH&Cie - Volcker & LBF implementation
CH&Cie - Volcker & LBF implementationCH&Cie - Volcker & LBF implementation
CH&Cie - Volcker & LBF implementation
Stephanie Baruk
 
CH&Cie_Volcker & lbf implementation - teaser
CH&Cie_Volcker & lbf implementation - teaserCH&Cie_Volcker & lbf implementation - teaser
CH&Cie_Volcker & lbf implementation - teaser
Thibault Le Pomellec
 
FRTB
FRTBFRTB
Transwatch am lfor emailing
Transwatch am lfor emailingTranswatch am lfor emailing
Transwatch am lfor emailingGraham Wicks
 
Ch&cie volcker & lbf
Ch&cie   volcker & lbfCh&cie   volcker & lbf
Ch&cie volcker & lbf
Stephane Eyraud
 
EY Investment bank transformation: from ideas to action
EY Investment bank transformation: from ideas to actionEY Investment bank transformation: from ideas to action
EY Investment bank transformation: from ideas to action
Roy Choudhury
 
From Analytical Actuarial to Fintech by CF Yam at HKU on 10 March 2016
From Analytical Actuarial to Fintech by CF Yam at HKU on 10 March 2016From Analytical Actuarial to Fintech by CF Yam at HKU on 10 March 2016
From Analytical Actuarial to Fintech by CF Yam at HKU on 10 March 2016CF Yam
 
Conduct risk beyond the rulebook bovill briefing march 2014
Conduct risk   beyond the rulebook bovill briefing march 2014Conduct risk   beyond the rulebook bovill briefing march 2014
Conduct risk beyond the rulebook bovill briefing march 2014
Bovill
 
How to Drive Value from Operational Risk Data - Part 2
How to Drive Value from Operational Risk Data - Part 2How to Drive Value from Operational Risk Data - Part 2
How to Drive Value from Operational Risk Data - Part 2
Perficient, Inc.
 
Course Brochure on Anti-Manipulation Compliance in Energy Trading
Course Brochure on Anti-Manipulation Compliance in Energy Trading Course Brochure on Anti-Manipulation Compliance in Energy Trading
Course Brochure on Anti-Manipulation Compliance in Energy Trading
Tatawan Plengsirivat
 
Riskpro capital markets industry 2013
Riskpro capital markets industry 2013Riskpro capital markets industry 2013
Riskpro capital markets industry 2013Nidhi Gupta
 
Paps 1012
Paps 1012Paps 1012
Paps 1012
RS NAVARRO
 
Forward-Looking Practices in Wealth Management
Forward-Looking Practices in Wealth ManagementForward-Looking Practices in Wealth Management
Forward-Looking Practices in Wealth Management
Cognizant
 
2018 ACSW - Inforce management
2018 ACSW - Inforce management2018 ACSW - Inforce management
2018 ACSW - Inforce management
Nicholas Carbo, FSA, MAAA
 
2016 SEC & FINRA exam priorities for asset managers
2016 SEC & FINRA exam priorities for asset managers2016 SEC & FINRA exam priorities for asset managers
2016 SEC & FINRA exam priorities for asset managers
Grant Thornton LLP
 

Similar to Volcker Rule Challenges for Covered Banking Entities (20)

Regulatory Impact Assessment in the Global Market
Regulatory Impact Assessment in the Global MarketRegulatory Impact Assessment in the Global Market
Regulatory Impact Assessment in the Global Market
 
CH&Cie - Volcker & LBF implementation
CH&Cie - Volcker & LBF implementationCH&Cie - Volcker & LBF implementation
CH&Cie - Volcker & LBF implementation
 
CH&Cie_Volcker & lbf implementation - teaser
CH&Cie_Volcker & lbf implementation - teaserCH&Cie_Volcker & lbf implementation - teaser
CH&Cie_Volcker & lbf implementation - teaser
 
FRTB
FRTBFRTB
FRTB
 
FRTB
FRTBFRTB
FRTB
 
Transwatch am lfor emailing
Transwatch am lfor emailingTranswatch am lfor emailing
Transwatch am lfor emailing
 
Ch&cie volcker & lbf
Ch&cie   volcker & lbfCh&cie   volcker & lbf
Ch&cie volcker & lbf
 
CV1
CV1CV1
CV1
 
EY Investment bank transformation: from ideas to action
EY Investment bank transformation: from ideas to actionEY Investment bank transformation: from ideas to action
EY Investment bank transformation: from ideas to action
 
From Analytical Actuarial to Fintech by CF Yam at HKU on 10 March 2016
From Analytical Actuarial to Fintech by CF Yam at HKU on 10 March 2016From Analytical Actuarial to Fintech by CF Yam at HKU on 10 March 2016
From Analytical Actuarial to Fintech by CF Yam at HKU on 10 March 2016
 
Conduct risk beyond the rulebook bovill briefing march 2014
Conduct risk   beyond the rulebook bovill briefing march 2014Conduct risk   beyond the rulebook bovill briefing march 2014
Conduct risk beyond the rulebook bovill briefing march 2014
 
How to Drive Value from Operational Risk Data - Part 2
How to Drive Value from Operational Risk Data - Part 2How to Drive Value from Operational Risk Data - Part 2
How to Drive Value from Operational Risk Data - Part 2
 
Course Brochure on Anti-Manipulation Compliance in Energy Trading
Course Brochure on Anti-Manipulation Compliance in Energy Trading Course Brochure on Anti-Manipulation Compliance in Energy Trading
Course Brochure on Anti-Manipulation Compliance in Energy Trading
 
Volcker webcast PPT V1
Volcker webcast PPT V1Volcker webcast PPT V1
Volcker webcast PPT V1
 
Riskpro capital markets industry 2013
Riskpro capital markets industry 2013Riskpro capital markets industry 2013
Riskpro capital markets industry 2013
 
Riskpro capital markets industry 2013
Riskpro capital markets industry 2013Riskpro capital markets industry 2013
Riskpro capital markets industry 2013
 
Paps 1012
Paps 1012Paps 1012
Paps 1012
 
Forward-Looking Practices in Wealth Management
Forward-Looking Practices in Wealth ManagementForward-Looking Practices in Wealth Management
Forward-Looking Practices in Wealth Management
 
2018 ACSW - Inforce management
2018 ACSW - Inforce management2018 ACSW - Inforce management
2018 ACSW - Inforce management
 
2016 SEC & FINRA exam priorities for asset managers
2016 SEC & FINRA exam priorities for asset managers2016 SEC & FINRA exam priorities for asset managers
2016 SEC & FINRA exam priorities for asset managers
 

Recently uploaded

USDA Loans in California: A Comprehensive Overview.pptx
USDA Loans in California: A Comprehensive Overview.pptxUSDA Loans in California: A Comprehensive Overview.pptx
USDA Loans in California: A Comprehensive Overview.pptx
marketing367770
 
Webinar Exploring DORA for Fintechs - Simont Braun
Webinar Exploring DORA for Fintechs - Simont BraunWebinar Exploring DORA for Fintechs - Simont Braun
Webinar Exploring DORA for Fintechs - Simont Braun
FinTech Belgium
 
Isios-2024-Professional-Independent-Trustee-Survey.pdf
Isios-2024-Professional-Independent-Trustee-Survey.pdfIsios-2024-Professional-Independent-Trustee-Survey.pdf
Isios-2024-Professional-Independent-Trustee-Survey.pdf
Henry Tapper
 
what is the future of Pi Network currency.
what is the future of Pi Network currency.what is the future of Pi Network currency.
what is the future of Pi Network currency.
DOT TECH
 
NO1 Uk Divorce problem uk all amil baba in karachi,lahore,pakistan talaq ka m...
NO1 Uk Divorce problem uk all amil baba in karachi,lahore,pakistan talaq ka m...NO1 Uk Divorce problem uk all amil baba in karachi,lahore,pakistan talaq ka m...
NO1 Uk Divorce problem uk all amil baba in karachi,lahore,pakistan talaq ka m...
Amil Baba Dawood bangali
 
how to sell pi coins effectively (from 50 - 100k pi)
how to sell pi coins effectively (from 50 - 100k  pi)how to sell pi coins effectively (from 50 - 100k  pi)
how to sell pi coins effectively (from 50 - 100k pi)
DOT TECH
 
how can I sell/buy bulk pi coins securely
how can I sell/buy bulk pi coins securelyhow can I sell/buy bulk pi coins securely
how can I sell/buy bulk pi coins securely
DOT TECH
 
What price will pi network be listed on exchanges
What price will pi network be listed on exchangesWhat price will pi network be listed on exchanges
What price will pi network be listed on exchanges
DOT TECH
 
Proposer Builder Separation Problem in Ethereum
Proposer Builder Separation Problem in EthereumProposer Builder Separation Problem in Ethereum
Proposer Builder Separation Problem in Ethereum
RasoulRamezanian1
 
MERCHANTBANKING-PDF complete picture.pdf
MERCHANTBANKING-PDF complete picture.pdfMERCHANTBANKING-PDF complete picture.pdf
MERCHANTBANKING-PDF complete picture.pdf
Sudarshan Dakuru
 
how to sell pi coins on Binance exchange
how to sell pi coins on Binance exchangehow to sell pi coins on Binance exchange
how to sell pi coins on Binance exchange
DOT TECH
 
NO1 Uk Rohani Baba In Karachi Bangali Baba Karachi Online Amil Baba WorldWide...
NO1 Uk Rohani Baba In Karachi Bangali Baba Karachi Online Amil Baba WorldWide...NO1 Uk Rohani Baba In Karachi Bangali Baba Karachi Online Amil Baba WorldWide...
NO1 Uk Rohani Baba In Karachi Bangali Baba Karachi Online Amil Baba WorldWide...
Amil baba
 
一比一原版UOL毕业证利物浦大学毕业证成绩单如何办理
一比一原版UOL毕业证利物浦大学毕业证成绩单如何办理一比一原版UOL毕业证利物浦大学毕业证成绩单如何办理
一比一原版UOL毕业证利物浦大学毕业证成绩单如何办理
ydubwyt
 
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...
Vighnesh Shashtri
 
how can I sell pi coins after successfully completing KYC
how can I sell pi coins after successfully completing KYChow can I sell pi coins after successfully completing KYC
how can I sell pi coins after successfully completing KYC
DOT TECH
 
Intro_Economics_ GPresentation Week 4.pptx
Intro_Economics_ GPresentation Week 4.pptxIntro_Economics_ GPresentation Week 4.pptx
Intro_Economics_ GPresentation Week 4.pptx
shetivia
 
what is the best method to sell pi coins in 2024
what is the best method to sell pi coins in 2024what is the best method to sell pi coins in 2024
what is the best method to sell pi coins in 2024
DOT TECH
 
655264371-checkpoint-science-past-papers-april-2023.pdf
655264371-checkpoint-science-past-papers-april-2023.pdf655264371-checkpoint-science-past-papers-april-2023.pdf
655264371-checkpoint-science-past-papers-april-2023.pdf
morearsh02
 
What website can I sell pi coins securely.
What website can I sell pi coins securely.What website can I sell pi coins securely.
What website can I sell pi coins securely.
DOT TECH
 
The secret way to sell pi coins effortlessly.
The secret way to sell pi coins effortlessly.The secret way to sell pi coins effortlessly.
The secret way to sell pi coins effortlessly.
DOT TECH
 

Recently uploaded (20)

USDA Loans in California: A Comprehensive Overview.pptx
USDA Loans in California: A Comprehensive Overview.pptxUSDA Loans in California: A Comprehensive Overview.pptx
USDA Loans in California: A Comprehensive Overview.pptx
 
Webinar Exploring DORA for Fintechs - Simont Braun
Webinar Exploring DORA for Fintechs - Simont BraunWebinar Exploring DORA for Fintechs - Simont Braun
Webinar Exploring DORA for Fintechs - Simont Braun
 
Isios-2024-Professional-Independent-Trustee-Survey.pdf
Isios-2024-Professional-Independent-Trustee-Survey.pdfIsios-2024-Professional-Independent-Trustee-Survey.pdf
Isios-2024-Professional-Independent-Trustee-Survey.pdf
 
what is the future of Pi Network currency.
what is the future of Pi Network currency.what is the future of Pi Network currency.
what is the future of Pi Network currency.
 
NO1 Uk Divorce problem uk all amil baba in karachi,lahore,pakistan talaq ka m...
NO1 Uk Divorce problem uk all amil baba in karachi,lahore,pakistan talaq ka m...NO1 Uk Divorce problem uk all amil baba in karachi,lahore,pakistan talaq ka m...
NO1 Uk Divorce problem uk all amil baba in karachi,lahore,pakistan talaq ka m...
 
how to sell pi coins effectively (from 50 - 100k pi)
how to sell pi coins effectively (from 50 - 100k  pi)how to sell pi coins effectively (from 50 - 100k  pi)
how to sell pi coins effectively (from 50 - 100k pi)
 
how can I sell/buy bulk pi coins securely
how can I sell/buy bulk pi coins securelyhow can I sell/buy bulk pi coins securely
how can I sell/buy bulk pi coins securely
 
What price will pi network be listed on exchanges
What price will pi network be listed on exchangesWhat price will pi network be listed on exchanges
What price will pi network be listed on exchanges
 
Proposer Builder Separation Problem in Ethereum
Proposer Builder Separation Problem in EthereumProposer Builder Separation Problem in Ethereum
Proposer Builder Separation Problem in Ethereum
 
MERCHANTBANKING-PDF complete picture.pdf
MERCHANTBANKING-PDF complete picture.pdfMERCHANTBANKING-PDF complete picture.pdf
MERCHANTBANKING-PDF complete picture.pdf
 
how to sell pi coins on Binance exchange
how to sell pi coins on Binance exchangehow to sell pi coins on Binance exchange
how to sell pi coins on Binance exchange
 
NO1 Uk Rohani Baba In Karachi Bangali Baba Karachi Online Amil Baba WorldWide...
NO1 Uk Rohani Baba In Karachi Bangali Baba Karachi Online Amil Baba WorldWide...NO1 Uk Rohani Baba In Karachi Bangali Baba Karachi Online Amil Baba WorldWide...
NO1 Uk Rohani Baba In Karachi Bangali Baba Karachi Online Amil Baba WorldWide...
 
一比一原版UOL毕业证利物浦大学毕业证成绩单如何办理
一比一原版UOL毕业证利物浦大学毕业证成绩单如何办理一比一原版UOL毕业证利物浦大学毕业证成绩单如何办理
一比一原版UOL毕业证利物浦大学毕业证成绩单如何办理
 
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...
 
how can I sell pi coins after successfully completing KYC
how can I sell pi coins after successfully completing KYChow can I sell pi coins after successfully completing KYC
how can I sell pi coins after successfully completing KYC
 
Intro_Economics_ GPresentation Week 4.pptx
Intro_Economics_ GPresentation Week 4.pptxIntro_Economics_ GPresentation Week 4.pptx
Intro_Economics_ GPresentation Week 4.pptx
 
what is the best method to sell pi coins in 2024
what is the best method to sell pi coins in 2024what is the best method to sell pi coins in 2024
what is the best method to sell pi coins in 2024
 
655264371-checkpoint-science-past-papers-april-2023.pdf
655264371-checkpoint-science-past-papers-april-2023.pdf655264371-checkpoint-science-past-papers-april-2023.pdf
655264371-checkpoint-science-past-papers-april-2023.pdf
 
What website can I sell pi coins securely.
What website can I sell pi coins securely.What website can I sell pi coins securely.
What website can I sell pi coins securely.
 
The secret way to sell pi coins effortlessly.
The secret way to sell pi coins effortlessly.The secret way to sell pi coins effortlessly.
The secret way to sell pi coins effortlessly.
 

Volcker Rule Challenges for Covered Banking Entities

  • 1. THE VOLCKER RULE AND THE CHALLENGES AHEAD BY OSCAR VANEGAS - SENIOR REGULATORY AND COMPLIANCE CONSULTANT 1
  • 2. BACKGROUND 2 • The Volker Rule was constituted as section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act • Final ruling was implemented on December 10th, 2013 by five federal agencies – the Federal Reserve, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the Securities and Exchange Commission (SEC) and the Commodity Future Trading Commission (CFTC) • In its core principle, the rule was implemented to promote and enhance the safety and soundness of banking entities; protect taxpayers and consumers and promote financial stability by minimizing the risk associated with unsafe and unsound activities • The rule introduces a tiered compliance program that requires enhanced processes and controls; banks with the largest trading businesses have began reporting quantitative measurements on June 30, 2014 and bring trading activities into full compliance by July 21, 2015
  • 3. OVERVIEW 3 • The rule is intended to reduce the risks associated with short-term proprietary trading and limits investment activities in covered funds, prohibiting the acquisition and retention of any equity, partnership, or other ownership interest in or sponsor a hedge fund or a private equity fund • What is proprietary trading? - engaging as a principal for the trading account of the banking entity in any purchase or sale of one or more financial instruments • What is “sponsoring”? - generally serving as GP, managing member or trustee, electing or controlling majority of directors, trustees or management of fund sharing name with the covered fund • The final rule includes critical refinements that reduces the threat to market liquidity, trading revenues, and the safety and soundness of the covered banking entities and other systematically important financial institutions (SIFI) • Coverage of activities conducted within the limits of the United States and its affiliated territories • Coverage of transactions performed by foreign banking agencies that derived a considerably portion of their profits while being conducted within the limits of the United Sates, or that such covered transactions involve the participation therein of a U.S Citizen
  • 4. CHALLENGES - THE BUSINESS MODEL 4 Covered Activities – Business Model Re- design The core principles affected: investment compliance, funding through market-making and profitability of proprietary trading activities • Maintain a very limited inventory  Bank customers will have lower market liquidity for their securities  higher financing costs diminishing credit access • Reduction in market making will obstruct the ability to determine the quality of securitized loans and the offering of credit facilities New operational and risk management conditions: identify transactions where the institution is taking principal market risk from speculative proprietary trading or investment risk – risk metrics and reporting at the trading desk level
  • 5. CHALLENGES – COMMITMENT IN CAPITAL INVESTMENTS AND RESOURCES 5 Considerable efforts in Capital Investment, Human Capital and Resources • Design and implement an enhanced compliance program • Risk Metrics and Reporting • Auditing activities and training of trading personnel • Reassessment of liquidity, market and counterparty risk models  enhanced capital requirements Base III and CCAR • Mitigate exposure to illiquid markets in “stressed” conditions  considerable swings in volatilities in the markets • dramatic changes in portfolio Value-at-Risk measurements Identification and Controls of covered activities: • Serving as market makers and underwriters only to meet the near term demands of customers • Standing ready to cover an incomplete side of a trade • Hurdles to arbitrage trading activities that promote liquidity or price transparency
  • 6. CHALLENGES – TECHNOLOGICAL CAPACITY AND STRUCTURE 6 Enhanced data provisioning and market intelligence systems Identification, segregation and delivering at the transactional level (including non-U.S txns) Enhanced Technological Structure Revamped Technical Capacity Consolidate data warehousing Top-of-the-line transactional data systems Audit trials across multiple trading desks Consolidation of KRI and metrics Risk Management models Validation Advanced regulatory and management reporting Trading desks’ transactional volume and income generation Trading personnel training and systems’ support
  • 7. CHALLENGES – BUSINESS PROFITABILITY, STAFF COMPENSATION AND COMPETITIVENESS 7 Consolidate data warehousing Top-of-the-line transactional data systems Audit trials across multiple trading desks Consolidation of KRI and metrics Risk Management models Validation Advanced regulatory and management reporting Trading desks’ transactional volume and income generation Trading personnel training and systems’ support • Minimum scope to profit from products’ inventories (market- maker inventory is designed not to exceed the reasonably expected near term demands of clients) • Limited opportunities to profit from market movements and volatilities • Potential losses through incomplete trades Business Profitability • Compensation schemes focused on trading volumes as opposed to the more attractive profitability of the institution’s own trading books • Losing talented traders to the non-regulated hedge fund industry Compensatio n • Reduced global trading market restricted by extraterritorial reach • Restrictions to participate in OTC markets • Considerable investments in technology, systems, audits, controls and enhanced compliance programs • Funding of investment vehicles going to unregulated markets Competitivenes s
  • 8. COMPLIANCE PROGRAM – ILLUSTRATIVE STRUCTURE OF THE ENHANCED COMPLIANCE PROGRAM 8 Governance Senior Management CEO Board of Directors • Approve, implement & enforce • Periodic review for effectiveness • Remediation and Board reporting • Attestation that processes are in place to ensure compliance with final rule • Establish culture of compliance • Supervise senior management team • Align resources & incentives • Approve program Risk Management Analytics & Reporting Legal and Compliance • Risk limit framework • Robust analytics to set risk limits • Model validation & documentation • Exception policy (and monitoring) • Escalation procedures • Production & monitoring of metrics • Robust analytics to set thresholds • Exception policy (and monitoring) • Escalation procedures • Reporting • Training • Recordkeeping • Conflicts of interest • Remediation Front Office Controls • Define mission (i.e. trading activity) and strategy (i.e. trading method) for each trading desk • Define authorized activities, products, and counterparties for each trading desk • Policies and procedures for establishing limits, measuring activity, and enforcing compliance • Policies and procedures for compensation, limiting incentives for prohibited proprietary trading or excessive risk taking Independent Testing, Auditing and Staff Training
  • 9. COMPLIANCE PROGRAM DESCRIPTION 9 INTERNAL POLICIES AND PROCEDURES: written policies and procedures reasonably designed to document, describe, monitor and limit exempted trading activities conducted by the banking entity INTERNAL CONTROLS & MANAGEMENT FRAMEWORK—RESPONSIBILITYAND ACCOUNTABILITY that clearly delineates responsibility and accountability; includes appropriate review of trading limits, strategies, hedging activities, investments, incentive compensation INDEPENDENT TESTING and internal audit of the effectiveness of the compliance program conducted periodically by qualified personnel of the banking entity or by a qualified outside party TRAINING for trading staff and managers, as well as other appropriate personnel, to effectively implement and enforce the compliance program. RECORDKEEPING sufficient to demonstrate compliance, which a banking entity must promptly provide to regulators upon request and retain for a period of no fewer than 5 years. This must include records in connection with risk-mitigating hedging, underwriting and market making permitted activities
  • 10. REPORTING METRICS 10 Consolidate data warehousing Top-of-the-line transactional data systems Audit trials across multiple trading desks Consolidation of KRI and metrics Risk Management models Validation Advanced regulatory and management reporting Trading desks’ transactional volume and income generation Trading personnel training and systems’ support • Risk and Position Limits and Usage • Risk Factor Sensitivities • Value at Risk (VaR) and Stress Value at Risk (Stress VaR) Risk Management • Comprehensive Profit and Loss AttributionSource of Revenue • Inventory Turnover • Inventory Aging • Customer-Facing Trade Ratio – Trade Count Based and Value Based Customer-Facing Activity
  • 11. CONCLUDING OBSERVATIONS 11 Consolidate data warehousing Top-of-the-line transactional data systems Audit trials across multiple trading desks • Increased market volatility, price uncertainty and the reduced capacity for institutions to raise capital and/or hedge risk • Impaired U.S. competitiveness, and potential vulnerability to legal challenges, given the rule’s global scope of prohibitions • Vulnerabilities around liquity, credit availability, funding and market & investment risks • Dedicate a considerable portion of their capital investments and resources to address and implement all required elements in the final rule • Compromise time and resources to coordinated several tasks with deferent objectives between business strategy, compliance, finance and technology • Business units consultative support is critical to implement a firm-wide Volcker framework to ensure the complete validation and attestation of the covered baking entities’ trading and fund investment businesses with the compliance controls set-forth by the federal agencies.
  • 13. KEY PROCEDURES AND LOGISTICS 13 Reporting Required / Optional Reporting Required: metrics in respect of trading conducted pursuant to the underwriting-related, market making-related, risk-mitigating hedging and U.S./foreign government obligation permitted activities Reporting optional: metrics in respect of trading excluded from the scope of proprietary trading, on behalf of customers, regulated insurance company or foreign bank permitted activities Level of Measurement Metrics reporting at the single trading desk level; each trading desk, defined as the smallest discrete unit that purchases or sells financial instruments for the trading account of the banking entity or an affiliate of the banking entity. Regulatory Reporting Frequency For banking entities with $50 billion or more in trading assets and liabilities: for each calendar month, within 30 days of the end of the relevant month (beginning with information for January 2015, within 10 days of month end) For other banking entities: for each calendar quarter, within 30 days of quarter end Record Retention 5 years; records documenting preparation/content of reports submitted
  • 14. TIMING AND APPLICABILITY OF COMPLIANCE PROGRAM AND METRICS REPORTING 14 STANDARD COMPLIANCE PROGRAM– NO METRICS for Banking entities with more than $10 billion but less than $50 billion of total consolidated assets and less than $10 billion of trading assets and liabilities Compliance required: July 21, 2015 ENHANCED COMPLIANCE PROGRAM– NO METRICS for Banking entities with $50 billion or more of total consolidated assets but less than $10 billion of trading assets and liabilities. Compliance required: July 21, 2015 • ENHANCED COMPLIANCE PROGRAM WITH METRICS for Banking entities with total consolidated assets of $50 billion or more, enhanced program effective: July 21, 2015 • Phase-in for metrics reporting requirements for banking entities with $10 billion or more in trading assets and liabilities: • For those with trading assets and liabilities of $50 billion or more: metrics June 30, 2014 • For those with trading assets and liabilities of between $25 billion and $50 billion: metrics April 30, 2016 • For those with trading assets and liabilities of between $10 billion and $25 billion metrics December 31, 2016