Bloomberg News

Global Regulators Unclear on Copying Volcker, RBS’s Norman Says

May 10, 2012

While financial-market regulators in Europe and Asia will probably implement rules similar to the Dodd-Frank Act, they may not do the same with the U.S. proprietary trading ban known as the Volcker rule, according to Royal Bank of Scotland Plc’s Stephen Norman.

Regulators are still writing the details of the rules for the Dodd-Frank Act, the most sweeping overhaul of U.S. financial regulation since the 1930s, introduced in reaction to the financial crisis of 2008. The Volcker rule is a provision of the 2010 law that would ban deposit-taking banks from engaging in proprietary trading.

“The difference here with Dodd-Frank and the Volcker rule is the other regulators around the world are pretty clear that they want to follow the Dodd-Frank lead,” Norman, chief information officer for markets, said today at the Bloomberg Enterprise Technology Summit hosted by Bloomberg Link. “It’s not clear that’s what’s going to happen with Volcker.”

Norman said the Volcker rule isn’t explicit about how proprietary trading will be defined and which trades will be affected by the regulation. He added that while the concept to “make the banks safer” is a sound one, the implications of the rule have yet to be cleared up.

Foreign banks may have to comply with Volcker if transactions are processed through companies based in the U.S., Norman said. For example, reporting a swap transaction between a European bank and client to the New York-based Depository Trust & Clearing Corp. or clearing a trade with London’s LCH.Clearnet Ltd., which has a U.S. subsidiary, could subject the deal to the rule, he said.

To contact the reporters on this story: Matthew Leising in New York at; Whitney Kisling in New York at

To contact the editor responsible for this story: Nick Baker at

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