Goldman Sachs Group Inc. will shut its Global Macro Proprietary Trading desk, a person with knowledge of the decision said.
The desk, which trades currencies and stocks as well as products tied to interest rates and other fixed-income markets, will close soon, said the person, who declined to be named since the decision wasn't public. Goldman spokesman Stephen Cohen declined to comment.
"Keeping the prop business going will have little benefit and closing it will be seen as a positive move to comply with Dodd-Frank," said Christopher Wheeler, an analyst at Mediobanca SpA.
Morgan Stanley and JPMorgan Chase & Co. are among firms breaking off or winding down such units to comply with the Volcker Rule, a part of the Dodd-Frank Act that bars banks from betting capital for their own accounts.
The group reported results as part of Goldman Sachs' fixed-income trading division, the person said. That division generated revenue of $13.7 billion in 2010, or 35% of Goldman's total.
Goldman last year shut down an equity proprietary trading group, Goldman Sachs Principal Strategies, to comply with the Volcker rule. Pierre Henri Flamand, the former head of Goldman's Principal Strategies group, retired last year to start his own hedge fund.
The company said on Jan. 19 that earnings fell 52% in the fourth quarter, its third straight quarterly decline.
The Federal Reserve confirmed last week that banks would generally have two years to comply after the rule takes effect.
David Viniar, Goldman's chief financial officer, said last month that there was a chance some activities in the investing and lending segment would not be allowed by new rules.
Goldman's special situations group, which invested in distressed assets such as Thai car loans and Japanese golf courses, shouldn't be affected by the prohibition on proprietary trading because most of the group "is actually a lending business," Viniar told analysts on Oct. 19.
