[ by Melanie Gretchen ] JPMorgan Chase is experiencing the Volcker Rule effect first-hand, as the measure banning firms from buying and selling securities for their own portfolios extends to the top ranks of the New York-based bank.  Mike Stewart, the global head of proprietary trading at JPMorgan, will depart the bank to start his own hedge fund, according to a person with direct knowledge of the matter. New Start. Mr. Stewart, the bank’s former head of emerging markets, is expected to take a team of some 6 people currently working with him at JPMorgan to start the new hedge fund, said the person who spoke on the condition of anonymity because he was not authorized to speak publicly. What makes the Volcker Rule a game changer is JPMorgan will not invest in the new firm because of the implications resulting from the Volcker Rule, according to the person. JPMorgan is closing its proprietary trading units and moving the staff into its asset management division.  Last fall, in October, employees of credit proprietary trading desk were transferred, and the equity group is expected to move later this year. The Volcker Rule Effect. Other firms giving in to the Volcker Rule include Citigroup, which on 1/26/12 said in an internal memo that it was shutting its equity principal strategies desk, which made trades using the firm’s own capital.  Last year, Morgan Stanley also announced it would spin off its in-house quantitative trading unit by the end of 2012. In 2010, Goldman Sachs’ proprietary trading desk in New York moved to the private equity giant Kohlberg Kravis Roberts as the bank wound down the operation in compliance with the new federal regulations. For further details, go to [Dealbook, 3/5/12].