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Federal regulators recently issued a notice of proposed rulemaking (the 'Proposal') under Section 619 of the Dodd-Frank Act, commonly known as the 'Volcker Rule.' If the Proposal were to be adopted in its present form, the regulators' narrow interpretation of the types of government securities exempted from the Volcker Rule would prohibit banking entities from proprietary trading in over half of the municipal bonds outstanding in the markets. Likewise, by the regulators' narrow interpretation, banking entities would be effectively prohibited from sponsoring or acquiring an ownership interest in municipal tender option bond ('TOB') trusts and from entering into the liquidity facilities that are an essential feature of TOB trusts.