A member of the Securities and Exchange Commission said last Friday that regulators should consider ridding the Dodd-Frank Act of the Volcker Rule and replacing it with a new proposal that does not affect market stability.
“There is a considerable risk that as proposed, the regulatory infrastructure to implement the Volcker [Rule] could unduly impede the competitiveness…of our financial markets and hinder the flow of capital,” SEC Commissioner Troy Paredes said during a speech at the Practising Law Institute’s annual SEC Speaks conference, the Chicago Tribune reports.
In October, regulatory agencies released the proposal, which included more than 350 questions for public comment. Participants in the finance industry argued that the proposal as it stands is too complex and would undermine U.S. competitiveness.
“My present view is that the most appropriate path from here would be a [re-proposal] – a fresh start, if you will,” Paredes said, according to the Chicago Tribune.
Since the Volcker Rule’s inception, regulators have struggled to streamline the proposal, which bans banks from participating in proprietary trading. In recent weeks, regulators have received comments from industry experts and financial institutions warning against the rule’s institution.
Regulators, including the SEC, have been sorting through the numerous comments to determine the next course of action, which could include adopting the rule as is or re-proposing a new mandate for public comment.