Federal Regulatory Agencies Finalize Rule That Exempts Qualified Opportunity Funds from Volcker Rule, Allows Banks to Participate in OZ Investments

Thursday, June 25, 2020 - 4:00PM

Federal regulatory agencies today finalized a rule that excludes qualified opportunity funds (QOFs) from the list of banking entities forbidden to invest in covered funds, a ruling that allows banks to participate in the federal opportunity zone (OZ) incentive. The final rule–by the Securities and Exchange Commission, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Federal Reserve Board and the Commodity Futures Trading Commission–modifies the Volcker rule’s prohibition on banking entities sponsoring or investing in covered funds and is similar to the proposed rule in January. The exception for QOFs was made to allow banking entities to offer financial services and engage in other activities that do not raise concerns that the Volcker rule was intended to address.

The final rule and other OZ topics will be discussed July 15 during the Novogradac 2020 Opportunity Zones Virtual Conference.

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