The Economic Growth, Regulatory Relief, and Consumer Protection Act, enacted on May 24, 2018, amended the Bank Holding Company Act by modifying the definition of “banking entity” to exclude certain small banks from the Volcker Rule’s restrictions and permitting a banking entity to share a name with a hedge fund or private equity fund that it organizes and offers under certain circumstances.
The Volcker Rule had provided that a banking entity, including an investment adviser, that organized and offered a hedge fund or private equity fund, could not share the same name or a variation of the same name with the fund. Section 204 of the Economic Growth, Regulatory Relief, and Consumer Protection Act amended the Volcker Rule to permit a hedge fund or private equity fund organized and offered by a banking entity to share the same name or a variation of the same name as a banking entity that is an investment adviser to the hedge fund or private equity fund, if:
- the investment adviser is not an insured depository institution, a company that controls an insured depository institution, or a company that is treated as a bank holding company
- the investment adviser does not share the same name or a variation of the same name with any such entities; and
- the name does not contain the word “bank.”
The SEC, CFTC, FDIC, Federal Reserve and the Treasury submitted a joint proposed regulation that does just what the law did in allowing the name-sharing. The agencies managed to publish the regulation just before the government shutdown.
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