Today, the BDA submitted a statement to the House Committee on Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises. The Subcommittee on Capital Markets is holding a hearing on July 10 focusing on the Impact of Dodd-Frank on Customers, Credit, and Job Creators.
The BDA suggested several recommendations to the drafters of the Volcker Rule in order to avoid potential adverse ramifications to the fixed-income markets. One recommendation is that the Volcker Rule should not apply at all to fixed-income broker-dealers, even if they are affiliated with a financial institution. Alternatively, if that recommendation is not to be adopted, our secondary recommendation is that the Volcker Rule should not apply to securities broker-dealers affiliated with a financial institution with balance sheet assets of less than $10 billion. And, finally, the Rule should incorporate by reference a definition of market making for fixed-income securities to be defined by the SEC.
View the full statement here.