Regulators writing a rule limiting proprietary trading by U.S. banks are considering extending the restrictions to overseas firms with operations in the country, according to four people familiar with the proposal.
Officials next month will issue a plan to carry out provisions of the so-called Volcker Rule, part of the Dodd-Frank financial-regulation law. The purpose is to clarify what types of offshore trading are exempt from the Volcker Rule, the people said.
The Volcker Rule, designed to reduce the types of risky investments blamed for triggering the financial crisis, has prompted U.S. banks such as Goldman Sachs Group Inc. (GS) to close proprietary-trading operations. Overseas banks say that a strict interpretation of the rule may also force them to fire or relocate U.S. employees who are involved in proprietary trading, even if no American money is at risk.
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