Citi is closing its propietary trading desk effective Feb. 6, Bloomberg’s Donal Griffin reports.
Griffin obtained a memo saying Citi would wind down positions in its Equity Principal Strategies group, responsible for making bets using the firm’s own money. A Citi representative confirmed the contents of the memo.
The move comes as the Fed and other regulatory agencies takes comments on the proposed Volcker Rule, which would ban U.S. banks from propietary trading. Many other banks have already anticipated the effects of Volcker and closed down several of their prop trading tests.The proposed rule has received criticism from a host of players, including its namesake, former Fed chairman Paul Volcker, who said the new trading rules for banks need to be less complicated.
Citi’s equities-trading revenue plummeted $1.3 billion in 2011, Griffin reports.