How are investments in private equity funds treated under this subpart?

CFR · 2024-01-01 · US · Title 12

(a) (1) Is formed for the purpose of and is engaged exclusively in the business of investing in shares, assets, and ownership interests of financial and nonfinancial companies for resale or other disposition; (2) Is not an operating company; (3) No more than 25 percent of the total equity of which is held, owned or controlled, directly or indirectly, by the financial holding company and its directors, officers, employees and principal shareholders; (4) Has a maximum term of not more than 15 years; and (5) Is not formed or operated for the purpose of making investments inconsistent with the authority granted under section 4(k)(4)(H) of the Bank Holding Company Act (12 U.S.C. 1843(k)(4)(H)) or evading the limitations governing merchant banking investments contained in this subpart. (b) (c) (2) (3) (d) (2) (3) (4) (i) Serves as a general partner, managing member, or trustee of the private equity fund (or serves in a similar role with respect to the private equity fund); (ii) Owns or controls 25 percent or more of any class of voting shares or similar interests in the private equity fund; (iii) In any manner selects, controls or constitutes a majority of the directors, trustees or management of the private equity fund; or (iv) Owns or controls more than 5 percent of any class of voting shares or similar interests in the private equity fund and is the investment adviser to the fund.

official document · source cfr-2024 · id 12:§ 225.173