Agencies extend Reg O relief for specific fund-controlled business

Federal banking firms today extended by one year no-action relief under Regulation O for banks providing to financial investment fund-controlled business under particular conditions. The relief was set to end at the start of 2023 however has actually been pressed back to either Jan. 1, 2024, or the efficient date of a last Federal Reserve guideline modifying Reg O.

The relief is being attended to “fund complex-controlled portfolio companies”—that is, business whose ballot shares are at least 10% owned by a mutual fund and its sponsor—whose fund complex gets adequate shares in a bank to be thought about an expert under Reg O. The firms will not do something about it versus banks extending credit to money complex-controlled portfolio business that would otherwise breach Reg O, supplied that the fund complex manages less than 15% of the bank’s shares which it does not have or look for to put agents in the bank or to work out impact over the bank. Extensions of credit to these business need to be on “substantially the same terms” as those for equivalent unaffiliated celebrations. The relief uses just to portfolio business, not the fund complexes.


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