Volcker Rule - in contrast with GLBA

The Volcker Rule (investopedia.com)

The Volcker Rule

The rule's origins date back to 2009 when economist and former Fed Chair Paul Volcker proposed a piece of regulation in response to the ongoing financial crisis (and after the nation's largest banks accumulated large losses from their proprietary trading arms) that aimed to prohibit banks from speculating in the markets. Volcker ultimately hoped to re-establish the divide between commercial banking and investment banking — a division that once existed but was legally dissolved by a partial repeal of the Glass-Steagall Act in 1999.

The Volcker Rule prohibits banks from using their own accounts for short-term proprietary trading of securities, derivatives and commodity futures, as well as options on any of these instruments. The rule also bars banks, or insured depository institutions, from acquiring or retaining ownership interests in hedge funds or private equity funds, subject to certain exemptions. In other words, the rule aims to discourage banks from taking too much risk by barring them from using their own funds to make these types of investments to increase profits. The Volcker Rule relies on the premise that these speculative trading activities do not benefit banks’ customers.

The rule went into effect on April 1, 2014, with banks' full compliance required by July 21, 2015 

On June 25, 2020, the Federal Deposit Insurance Commission (FDIC) officials said the agency will loosen the restrictions from the Volcker Rule1 , allowing banks to more easily make large investments into venture capital and similar funds. In addition, the banks will not have to set aside as much cash for derivatives trades between different units of the same firm. That requirement had been put in place in the original rule to make sure that if speculative derivative bets went wrong, banks wouldn't get wiped out. The loosening of those requirements could free up billions of dollars in capital for the industry.