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Clifford Chance

Clifford Chance

Briefings

Proposed EU Regulation on Bank Structure: Comparison of Volcker Rule and proposed EU ban on proprietary trading and investment in AIFs

13 April 2015

The proposed EU Regulation on Bank Structure (BSR) includes prohibitions on banking groups engaging in proprietary trading and investing in alternative investment funds (AIFs).

The European Commission’s proposal for a prohibition on proprietary trading was designed to be narrower than the corresponding restriction under the US Volcker Rule and the ban on investment in AIFs was intended to prevent circumvention of that prohibition. However, the proposed EU rules would prohibit or restrict many activities in banking groups that would be permitted under the corresponding US rules, including own account and (in relation to funds) client-related activities that are consistent with the safety and soundness of a banking group and do not adversely affect its resolvability.

Clifford Chance has prepared a briefing comparing the US regulations implementing the Volcker Rule and the corresponding EU rules set out in the European Commission’s proposal for the BSR, focusing on areas where the EU rules may be more restrictive than the US rules. The briefing also identifies possible areas where the BSR could be aligned with the US rules to address the main issues highlighted by the comparison.

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