TITLE 12 - BANKS AND BANKING

CHAPTER XV - DEPARTMENT OF THE TREASURY

SUBCHAPTER A - GENERAL PROVISIONS

PART 1500 - MERCHANT BANKING INVESTMENTS

1500.5 - What aggregate thresholds apply to merchant banking investments?

  (a) In general. A financial holding company may not, without Board approval, directly or indirectly acquire any additional shares, assets or ownership interests under this part or make any additional capital contribution to any company the shares, assets or ownership interests of which are held by the financial holding company under this part if the aggregate carrying value of all merchant banking investments held by the financial holding company under this part exceeds: (1) 30 percent of the Tier 1 capital of the financial holding company; or (2) After excluding interests in private equity funds, 20 percent of the Tier 1 capital of the financial holding company (b) How do these thresholds apply to a private equity fund? Paragraph (a) of this section applies to the interest acquired or controlled by the financial holding company under this part in a private equity fund.

Paragraph (a) of this section does not apply to any interest in a company held by a private equity fund or to any interest held by a person that is not affiliated with the financial holding company.

  (c) How long do these thresholds remain in effect? This 1500.5 shall cease to be effective on the date that a final rule issued by the Board that specifically addresses the appropriate regulatory capital treatment of merchant banking investments becomes effective.