What Is a Covered Fund

Loosely put, the Rule defines a covered fund as anything not considered an investment company in the Investment Company Act, including private equity and hedge funds, as well as commodity pools with certain exclusions, and funds sponsored by a US banking entity where the affiliate holds ownership interests.

What is covered fund Volcker?

What Is the Volcker Rule? The Volcker Rule is a federal regulation that generally prohibits banks from conducting certain investment activities with their own accounts and limits their dealings with hedge funds and private equity funds, also called covered funds.

What is excluded from covered fund?

The Volcker Rule excludes “loan securitizations” from the definition of “covered fund” so long as the loan securitizations are comprised of loans or other qualifying assets (e.g., cash equivalents, servicing assets, certain rate or foreign exchange derivatives, interests in a tax subsidiary or similar entity formed by …