New Reforms to Volcker Rule will Help Build New Companies Across America

WASHINGTON, DC – The National Venture Capital Association (NVCA) is thrilled to see a final rule released by several agencies intended to remove a needless regulatory barrier that has limited bank participation in venture capital funds. The revisions to the Volcker Rule will once again allow banks to invest in venture capital funds. While NVCA is still working through the details, the rule appears to be a great win for entrepreneurship, innovation, and American communities. This reform to the Volcker Rule, which will go into effect on October 1, is especially important to small and regional VC funds who have greater challenges raising the capital needed to build businesses, and will put capital to work building startup communities around the country.

“NVCA has long advocated for reforms to the Volcker Rule to exclude venture capital funds from the covered fund prohibition, and we are thrilled to see this reform is being enacted,” said Bobby Franklin, President & CEO of NVCA. “This rule will have a significant impact on entrepreneurial capital formation and the U.S. economy, particularly in emerging ecosystems outside of the traditional startup hubs where raising capital can be more challenging.  I’d like to thank the multiple federal agencies who have worked hard on finding the right solution to this issue, and whose leadership will result in more capital flowing to long-term equity investments that will build the next generation of American companies.”

The Volcker Rule’s covered funds prohibition on financial institution investment into VC funds had created an unnecessary limitation for capital formation, particularly in emerging entrepreneurial ecosystems where venture fundraising requires investment from a more diverse set of limited partners.

Learn more about the importance of reforming the Volcker Rule here.

And read our comments on the initial proposed rulemaking here.

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About National Venture Capital Association

The National Venture Capital Association (NVCA) empowers the next generation of American companies that will fuel the economy of tomorrow. As the voice of the US venture capital and startup community, NVCA advocates for public policy that supports the American entrepreneurial ecosystem. Serving the venture community as the preeminent trade association, NVCA arms the venture community for success, serving as the leading resource for venture capital data, practical education, peer-led initiatives, and networking. For more information about NVCA, please visit www.nvca.org.