Page:United States Statutes at Large Volume 124.djvu/1652

 124 STAT. 1626 PUBLIC LAW 111–203—JULY 21, 2010 solely outside of the United States, provided that no owner- ship interest in such hedge fund or private equity fund is offered for sale or sold to a resident of the United States and that the banking entity is not directly or indirectly controlled by a banking entity that is organized under the laws of the United States or of one or more States. ‘‘(J) Such other activity as the appropriate Federal banking agencies, the Securities and Exchange Commis- sion, and the Commodity Futures Trading Commission determine, by rule, as provided in subsection (b)(2), would promote and protect the safety and soundness of the banking entity and the financial stability of the United States. ‘‘(2) LIMITATION ON PERMITTED ACTIVITIES.— ‘‘(A) IN GENERAL.—No transaction, class of trans- actions, or activity may be deemed a permitted activity under paragraph (1) if the transaction, class of transactions, or activity— ‘‘(i) would involve or result in a material conflict of interest (as such term shall be defined by rule as provided in subsection (b)(2)) between the banking entity and its clients, customers, or counterparties; ‘‘(ii) would result, directly or indirectly, in a mate- rial exposure by the banking entity to high-risk assets or high-risk trading strategies (as such terms shall be defined by rule as provided in subsection (b)(2)); ‘‘(iii) would pose a threat to the safety and sound- ness of such banking entity; or ‘‘(iv) would pose a threat to the financial stability of the United States. ‘‘(B) RULEMAKING.—The appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission shall issue regulations to implement subparagraph (A), as part of the regulations issued under subsection (b)(2). ‘‘(3) CAPITAL AND QUANTITATIVE LIMITATIONS.—The appro- priate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission shall, as provided in subsection (b)(2), adopt rules imposing additional capital requirements and quantitative limitations, including diversification requirements, regarding the activities permitted under this section if the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission determine that addi- tional capital and quantitative limitations are appropriate to protect the safety and soundness of banking entities engaged in such activities. ‘‘(4) DE MINIMIS INVESTMENT.— ‘‘(A) IN GENERAL.—A banking entity may make and retain an investment in a hedge fund or private equity fund that the banking entity organizes and offers, subject to the limitations and restrictions in subparagraph (B) for the purposes of— ‘‘(i) establishing the fund and providing the fund with sufficient initial equity for investment to permit the fund to attract unaffiliated investors; or