S.Amdt. 4140

SA 4140. Mr. BROWN of Massachusetts submitted an amendment intended
to be proposed to amendment SA 3883 proposed by Ms. Snowe (for herself
and Mr. Pryor) to the amendment SA 3739 proposed by Mr. Reid (for Mr.
Dodd (for himself and Mrs. Lincoln)) to the bill S. 3217, to promote
the financial stability of the United States by improving
accountability and transparency in the financial system, to end ``too
big to fail'', to protect the American taxpayer by ending bailouts, to
protect consumers from abusive financial services practices, and for
other purposes; which was ordered to lie on the table; as follows:

At the end of the amendment, add the following:

SEC. __. PROPRIETARY TRADING.

(a) Definition.--Notwithstanding section 619(a), for
purposes of section 619, the term ``insured depository
institution'' does not include an institution described in
section 2(c)(2)(D) of the Bank Holding Company Act of 1956
(12 U.S.C. 1841(c)(2)(D)).
(b) Exceptions.--Notwithstanding section 619(c), for
purposes of section 619, an insured depository institution, a
company that controls, directly or indirectly, an insured
depository institution or is treated as a bank holding
company for purposes of the Bank Holding Company Act of 1956
(12 U.S.C. 1841 et seq.), or any subsidiary of such
institution or company may sponsor or invest in a hedge fund
or a private equity fund, if--
(1) such institution, company, or subsidiary provides
trust, fiduciary, or advisory services to the fund;
(2) the fund is sponsored and offered in connection with
the provision of trust, fiduciary, or advisory services by
such institution, company, or subsidiary to persons who are,
or may be, customers or clients of such institution, company,
or subsidiary;
(3) such institution, company, or subsidiary--
(A) does not acquire or retain an equity, partnership, or
ownership interest in the fund; or
(B) acquires or retains an equity, partnership, or
ownership interest, if--
(i) on the date that is 12 months after the date on which
the fund is established, the equity, partnership, or
ownership interest is not greater than 10 percent of the
total equity of the fund; and
(ii) the aggregate equity investments by such institution,
company, or subsidiary in the fund do not exceed 5 percent of
Tier 1 capital of such institution, company, or subsidiary;
(4) such institution, company, or subsidiary does not enter
into or otherwise engage in any transaction with the fund
that is a covered transaction, as defined in section 23A of
the Federal Reserve Act (12 U.S.C. 371c), except on terms and
under circumstances specified in section 23B of the Federal
Reserve Act (12 U.S.C. 371c-1);
(5) the obligations of the fund are not guaranteed,
directly or indirectly, by such institution, company, or
subsidiary any affiliate of such institution, company, or
subsidiary; and

[[Page S4011]]

(6) such institution, company, or subsidiary does not share
with the fund, for corporate, marketing, promotional, or
other purposes, the same name or a variation of the same
name.
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