Canada’s financial services regulator and the country’s banking sector are pushing back against the Volcker rule, a key plank of the Dodd-Frank US financial reform that they say would unfairly punish Canadian banks that deal closely with the US market.

The rule is designed to prevent US banks from trading with their own funds and to limit investments in hedge funds and private equity firms — but, Canadian regulators claim, it limits banks’ there to manage their risks.