[ by Melanie Gretchen ] The Volcker rule is under attack by 15,000-plus comment letters asking the SEC for revisions and clarification, that's likely to delay its pending 7/21/12 deadline and possibly set the stage for another industry upheaval.  Yet, bankers and brokers insist there are adjustments that can make it easier for financial institutions to comply with the rule's requirements and still allow them to execute for their clients.  Two changes that have been mentioned: (i) include language that spells out permissible market making activities; and, (ii) identify those metrics that would be used to measure compliance. Changing the Game. Sidley Austin partner James Brigagliano, and a former deputy director for the SEC's Division of Trading and Markets, has said that changes would make it easier for them to do business and conduct the customer-oriented businesses the statute endorses - e.g., underwriting and market making. He fully expects the SEC to extend its timetable to analyze and incorporate input from comment letters in the next coming months.  Historically, the SEC has focused on how the business of trading is conducted, not on what trading businesses are allowed, Mr. Brigagliano added. The Volcker rule, named for former Federal Reserve Chairman Paul Volcker, seeks to limit risky trading practices by banks, that many believe triggered or at least contributed, to the financial crisis of 2008.  As it is currently written, the Volcker Rule would prohibit  banks from proprietary trading and restrict investments in hedge funds and private equity by commercial banks and their affiliates. Exempt from this restriction would be certain activities of banks, their affiliates and non-bank institutions identified as systemically important - including market making, hedging, securitization and risk management. Summing Up Some Proposed Changes. First, brokers want defining language in the rule expanded.  More generous language, for example, would allow "market making-related" activities, which would be broader than the current rule permits on making markets.  "The agency model that's used in equities doesn't always work.  This model really doesn't work in fixed income at all.  We want broader latitude in making markets." -- As per a Bulge bracket executive. Second, the executive said his firm wants to see a clearer definition of what constitutes proprietary trading.  A broader interpretation of the rules would allow them build up inventories and hold them longer than 60-days, but under the rule's current language, holding a position for more than 60-days is considered proprietary trading. Third, brokers want more latitude in how they can hedge positions.  As written now, the rule says once a brokerage carries a position, they must be hedged with a near exact instrument on a one-for-one basis - making it harder and more costly for the brokers to carry positions, another brokerage exec said. Lastly, Mr. Brigagliano said the brokerages would benefit by a simpler compliance process, when it comes to meeting the Volcker rule's mandates.  The rule currently would require  brokers to perform upwards of 17 separate tests to measure compliance in some instances: Which is why ... "Brokers hope to pare this back to a more manageable and less costly number.  Also, the metric used to measure compliance would be more asset class specific - so equities trading can be measured by benchmarks that best measure equities and not say, fixed income." For further details, go to [Traders Magazine, 4/3/12].