The staffs of the agencies responsible for administering the Volcker Rule have again updated the Volcker Rule FAQs. A new FAQ notes that the rule implementing the Volcker Rule and the accompanying preamble make clear that a registered investment company, or RIC, and a foreign public fund, or FPF, are not covered funds for purposes of the statute or implementing rules. The FAQ goes on to note that staff of the agencies would not advise the agencies to treat a RIC or FPF as a banking entity under the implementing rules solely on the basis that the RIC or FPF is established with a limited seeding period, absent other evidence that the RIC or FPF was being used to evade the Volcker Rule. The FAQ notes staffs of the agencies understand that the seeding period for an entity that is a RIC or FPF may take some time, for example, three years, the maximum period of time expressly permitted for seeding a covered fund under the implementing rules. The seeding period generally would be measured from the date on which the investment adviser or similar entity begins making investments pursuant to the written investment strategy of the fund. Accordingly, staff of the agencies would not advise the agencies to treat a RIC or FPF as a banking entity solely on the basis of the level of ownership of the RIC or FPF by a banking entity during a seeding period or expect an application to be submitted to the Federal Reserve Board to determine the length of the seeding period.
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