Covered funds seen as starting point for Volcker rule reform

Inter-agency consensus may prove more elusive on altering prop-trading definitions

Least contentious: US regulatory agencies looking to reform the Volcker rule may find the definition of covered funds the easiest place to begin

US regulatory agencies looking to reform the Volcker rule may find the definition of covered funds in which banks are forbidden to invest as the easiest and least contentious starting point, according to lawyers and former regulators.

Under the Volcker rule, a covered fund is anything not considered an investment company. This definition mainly comprises hedge funds and private equity firms, but there are several other exceptions that also fall into the covered funds category.

“These exception