Page:United States Statutes at Large Volume 102 Part 4.djvu/446

 102 STAT. 3416

PUBLIC LAW 100-647—NOV. 10, 1988 subparagraph (B), shall apply to taxable years beginning after the date of the enactment of this Act. (4) Clause (i) of section 851(g)(2)(A) of the 1986 Code (defining designated hedge) is amended by striking out "contractual option" and inserting in lieu thereof "contractual obligation" (5) Subsection (b) of section 851 of the 1986 Code is amended by adding at the end thereof the following new sentence: "In the case of the tsixable year in which a regulated investment company is completely liquidated, there shall not be taken into account under paragraph (3) any gain from the sale, exchange, or distribution of any property after the adoption of the plan of complete liquidation." (o) AMENDMENTS RELATED TO SECTION 654 OF THE REFORM ACT.—

Subsection (q) of section 851 of the 1986 Code (as added by section 654 of the Reform Act)— (1) is redesignated as subsection (h), and (2) is amended by adding at the end thereof the following new paragraph: "(3) SPECIAL RULE FOR ABNORMAL REDEMPTIONS.—

"(A) IN GENERAL.—Any fund treated as a separate corporation under paragraph (1) shall not be disqualified under subsection (b)(3) for any taxable year by reason of sales resulting from abnormal redemptions on any day and occurring before the close of the 5th business day after such day if— "(i) the sum of the percentages determined under subparagraph (B) for the abnormal redemptions on such day and for abnormal redemptions on prior days during such taxable year exceeds 30 percent; and "(ii) the regulated investment company of which such fund is a part would meet the requirements of subsection (b)(3) for such taxable year if all the funds which are part of such company were treated as a single company. "(B) ABNORMAL REDEMPTIONS.—For purposes of subpara-

graph (A), the term 'abnormal redemptions' means redemptions occurring on any day if the net redemptions on such day exceed 1 percent of the fund's net asset value. (C) DETERMINATION OF NET ASSET VALUE.—For purposes

of this paragraph, net asset value for any day shall be determined as of the close of the preceding day. "(D) LIMITATION.—For purposes of subparagraph (A), any sale or other disposition of stock or securities held less than 3 months occurring during any day shall be deemed to result from abnormal redemptions until the cumulative proceeds from such sales or dispositions occurring during such day, plus the cumulative net positive cash flow of the fund for preceding business days (if any) following the day with abnormal redemptions, exceed the amount of net redemptions on the day with abnormal redemptions." (p) AMENDMENTS RELATED TO SECTION 662 OF THE REFORM ACT.—

26 USC 856 note.

(1) Subclause (I) of section 856(c)(6)(D)(i) of the 1986 Code (as added by section 662 of the Reform Act) is amended by striking out "debt instrument" and inserting in lieu thereof "debt instrument (within the meaning of section 1275(a)(l))". (2) Notwithstanding section 669 of the Reform Act, the amendment made by section 662(c) of the Reform Act shall

�