The Volcker Rule goes into effect either 12 months after final regulations are issued or on July 21, 2012, whichever comes first. The financial regulatory reform law requires the Fed to issue rules on this matter by Jan. 21.
The Fed is seeking public input on its proposal, which would give financial institutions two years from when the rule goes into effect to wind down, sell or otherwise modify its behavior and holdings to conform to the rule. If a non-banking entity becomes a banking entity in the future, it would have two years to conform.
Entities could also receive three separate one-year extensions to that window if the Fed determines an extension would be consistent with the Volcker Rule and not detrimental to public interest. However, the proposed rule would also allow the Fed to impose conditions on those extensions, if it deems necessary.
Comments are due in 45 days.