What is in a draft of the 'Volcker Rule' on proprietary trading?

A draft of the 'Volcker Rule' on proprietary trading has hit the Internet, rocking both Wall Street and Washington and sending financial organizations across the country into a frenzy.
"Billions of dollars are at stake for big banks, which have been working for months to shape the rule aimed at curbing risky trading activities that played a part in the financial crisis," the Wall Street Journal wrote.
The leaked document was labeled as a draft and was authored by FDIC, the Federal Reserve, the Comptroller of the Currency and the Securities and Exchange Commission. It was posted on the American Banker's website .
The Volcker Rule proposal defines proprietary trading, offer limited circumstances under which a bank could invest in a hedge or private-equity fund, and require banks to install internal controls to ensure compliance with the rule. The Federal Deposit Insurance Corp. is set to release proposal on Oct. 11.
From WSJ:

"Officials inside the government agencies that drafted the document fumed about the leak. They worried that it could lead to pressure to change the language ahead of the FDIC's meeting next week. Alternatively, the regulators could feel pressure to refrain from changes that could make it appear that they had given in to industry pressure.[...]
The leak left regulators fuming and opened a new front in Wall Street's battle to soften the blow of the proposed rule. The draft gave banking industry lobbyists several days to discuss it before Tuesday, when the Federal Deposit Insurance Corp. is scheduled to consider issuing a version for public comment."

Many of those who have seen the draft are reportedly concerned that it demands extremely granular policing of traders, as part of the strict compliance program described in the leaked 205-page draft.
From the WSJ:

"Among the many prescriptions for these compliance regimes: Banks with trading assets of $1 billion or more in trading assets and liabilities would have to measure their trading with a variety of quantitative formulas, and periodically report these metrics to regulators. The specific reporting requirements would vary by the scale and scope of a banks' trading activity, according to the document." [...]Critics say that by allowing banks to hedge risks on a portfolio-wide basis, the rule could open the door to more aggressive trading tactics. A bank could claim that its portfolio is at risk from an economic turn, such as a recession, and take positions that protect it from such an event, they say."

Still, like countless other pieces of legislation pushed through under the Dodd-Frank Act, it will likely take many more months if not years before Wall Street firms and regulators know how the rule will actually be applied in practice.

(Source: WSJ, October 7, 2011)

Google founders to cut stake by selling $5.5 billion in stock. Sales would cut Brin, Page's voting power at Internet giant to less than 50%

Google Inc. co-founders Sergey Brin and Larry Page, who still own nearly one-fifth of the Internet giant, disclosed Friday that they intend to significantly reduce their stake by selling roughly $5.5 billion worth of stock over five years.

The sales are significant, because they would effectively eliminate Brin and Page's control of their company by cutting their collective voting power below 50%. Still, the 48% voting power that the co-founders' would retain following the sales nonetheless constitutes a formidable position of influence.

In a regulatory filing with the Securities & Exchange Commission, Brin and Page, who started Google /quotes/comstock/15*!goog/quotes/nls/goog (GOOG 550.01, -32.97, -5.66%) as graduate students at Stanford University, disclosed that under a five-year "diversification plan" adopted in November, they'll be selling 5 million shares each.

Brin and Page currently own roughly 57.7 million shares of common stock in Google, or about 18% of its outstanding capital stock. Their diversification plan is intended "to allow Larry and Sergey to sell a portion of their Google stock over time as part of their respective long-term strategies for individual asset diversification and liquidity," according to the regulatory filing.

At Google's closing stock price of $550.01 on Friday, the co-founders' sale of stock would result in proceeds of roughly $2.75 billion each.

Brin and Page have maintained significant ownership stakes in Google, while also relying on a dual-class stock structure at the company that currently grants them about 59% of the voting power of the company's outstanding capital stock.

After their planned five years of stock sales, their voting power would be reduced to roughly 48%, according to the regulatory filing.

Google shares dipped $6.47 to $545.25 in after-hours trading.

The search giant's stock price has been on a wild ride over the past two years, veering toward $250 in late 2008, before mounting a steady recovery throughout 2009.

Early last year, Google took the unusual step of In a regulatory filing with the Securities & Exchange Commission, Brin and Page, who started Google /quotes/comstock/15*!goog/quotes/nls/goog (GOOG 550.01, -32.97, -5.66%) as graduate students at Stanford University, disclosed that under a five-year "diversification plan" adopted in November, they'll be selling 5 million shares each.

Brin and Page currently own roughly 57.7 million shares of common stock in Google, or about 18% of its outstanding capital stock. Their diversification plan is intended "to allow Larry and Sergey to sell a portion of their Google stock over time as part of their respective long-term strategies for individual asset diversification and liquidity," according to the regulatory filing.

At Google's closing stock price of $550.01 on Friday, the co-founders' sale of stock would result in proceeds of roughly $2.75 billion each.

Brin and Page have maintained significant ownership stakes in Google, while also relying on a dual-class stock structure at the company that currently grants them about 59% of the voting power of the company's outstanding capital stock.

After their planned five years of stock sales, their voting power would be reduced to roughly 48%, according to the regulatory filing.

Google shares dipped $6.47 to $545.25 in after-hours trading.

The search giant's stock price has been on a wild ride over the past two years, veering toward $250 in late 2008, before mounting a steady recovery throughout 2009.

Early last year, Google took the unusual step of resetting stock options for employees at lower prices, making it easier for them to cash in on their equity. for employees at lower prices, making it easier for them to cash in on their equity.

(from MarketWatch, January 22, 2010)