On July 16, the SEC (along with other federal regulators) updated its FAQ regarding the Volcker Rule, available here.  In this update, the SEC provided the following information with respect to the “banking entity” status of registered investment companies and foreign public funds during their seeding periods:

The rule implementing section 13 of the BHC Act and the accompanying preamble make clear that a RIC and a foreign public fund (FPF) are not covered funds for purposes of the statute or implementing rules. The preamble to the implementing rules also recognize that a banking entity may own a significant portion of the shares of a RIC or FPF during a brief period during which the banking entity is testing the fund’s investment strategy, establishing a track record of the fund’s performance for marketing purposes, and attempting to distribute the fund’s shares (the so-called seeding period).Continue Reading SEC Issues New Volcker Rule FAQ Addressing Seeding Period Domestic and Foreign Public Funds