On October 1, 2020, significant changes to the covered fund provisions of the Volcker Rule (the “2020 Volcker Amendment”) are expected to go into effect. The changes, which add exclusions for several new categories of private funds (such as qualifying credit funds and venture capital funds) and ease requirements for certain existing exclusions (such as the loan securitization and foreign public fund exclusions), were issued in late June by the five federal agencies responsible for implementing the Volcker Rule (the “Agencies”). The 2020 Volcker Amendment was submitted by the Agencies to Congress during July and published in the Federal Register on July 31, 2020.
These dates have significance, because they directly impact whether the amendment may be subject to reversal under the Congressional Review Act (the “CRA”), a 1996 statute that establishes a window in which Congress can reject new rules adopted by federal agencies. This Client Alert considers the time period during which the 2020 Volcker Amendment may be vulnerable to the CRA process and the potential consequences if the CRA is, in fact, invoked.
