Volcker rule comment period extended due to coronavirus outbreak

Five federal regulatory agencies Thursday extended the comment period for proposed changes to the Volcker rule in light of the coronavirus pandemic.

In January, the Federal Reserve, Securities and Exchange Commission, Office of the Comptroller of the Currency, Federal Deposit Insurance Corp. and Commodity Futures Trading Commission issued a proposal to loosen restrictions on banks investing in or sponsoring hedge funds and private equity funds.

The public will now have until May 1 to submit comments. The original deadline was April 1.

"The agencies will continue to consider comments to provide interested persons more time to analyze the issues and prepare their comments in light of potential disruptions resulting from the coronavirus," the regulators stated in a news release.

The Volcker rule, part of the 2010 Dodd-Frank Act, prohibits federally backed financial institutions from engaging in proprietary trading or having interests in private equity or hedge funds. But when filing the proposal, regulators said it has created compliance uncertainty and imposed limits on certain banking services and activities that it did not intend to restrict.