On December 10, 2013, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Securities and Exchange Commission (collectively, the “Agencies”) promulgated the final rule (the “Final Rule”) implementing the prohibitions and limitations imposed on banking entities by Section 13 of the Bank Holding Company Act of 1956 (the “BHC Act”) added to the BHC Act by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). Section 13 of the BHC generally prohibits banking entities from engaging as principal in “proprietary trading” and from acquiring or retaining an ownership interest in or sponsoring a hedge fund or private equity fund, in each case as defined in and subject to the limitations, exceptions and exemptions set forth in Section 13 of the BHC Act and the Final Rule. A “banking entity” is defined generally in the Final Rule to mean any insured depository institution, any company that controls an insured depository institution, any company treated as a bank holding company under the International Banking Act of 1978 and any affiliate or subsidiary of the foregoing, but does not include a “covered fund” (defined as described below) that is not itself a banking entity, certain portfolio companies and the FDIC as conservator or receiver.

This alert provides a general overview of the Final Rule and highlights certain provisions of the Final Rule we believe to be of particular interest to you. The Final Rule is far-reaching, detailed and highly complex.1 A number of summaries of the Final Rule are publicly available2 and more information will become available as the details of the Final Rule are analyzed and perhaps additional guidance provided, and as banking entities and market participants in general seek to execute new transactions and assess holdings in and the terms of existing transactions in light of the Final Rule.