The Volcker rule will give foreign banks a proprietary-trading advantage over their U.S. counterparts, a legal expert said. "A foreign, non-U.S. bank that has an office in the U.S. that engages in any of the activities subject to the Volcker rule prohibitions will move those operations offshore," said Dwight Smith, a partner at Morrison & Foerster in Washington. "If you conduct this part of your business outside the U.S. and are not a U.S. bank holding company, then it doesn't reach you. It's self-evident, but the statute at least is explicit about that."

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