The Federal Reserve said Monday it will give banks two years of extra time to conform certain debt holdings with the Volcker rule, but stopped short of granting an exception the industry had been seeking.

The Fed said banks would have two additional years to make sure their collateralised loan obligations don't fall under the rule's ban on speculative investments. The decision could force some banks to divest their CLOs, which are complex securities that bundle together corporate loans as well as bonds. The Volcker rule restricts banks from holding bonds as an investment. The rule impacts a handful of large firms, though some smaller banks have said they may be forced to sell CLO holdings as a result of Volcker.