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Five federal agencies are set to reveal the long-awaited Volcker Rule, a centerpiece of the Dodd-Frank financial reform plan. The rule will limit proprietary trading, in which banks place bets with big trades, using their own money.
Banks and their attorneys will be poring over the document, and one of the things they’ll be looking for is whether there is a requirement that CEOs and boards certify they’re following the rules. Robert Maxant, a partner with Deloitte and Touche who advises banks, says certification could make boards and CEO’s pay more attention.
“It does make them very acutely conscious of, you know, have we in fact fully and completely complied with the rule?” he says.
Maxant says banks are concerned about how much certification could cost. It could get expensive, if the rule also requires certification from accounting firms.
“There would be an independent, outside public accounting firm to make sure that everything is legitimate and correct,” Micah Hauptman, an attorney and Volcker Rule specialist at Public Citizen, says of that scenario.
He says that if everything wasn’t correct, there could be consequences including lawsuits or criminal charges.
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