,,ii #aaf? ,,congress #a/ ,session ,s4 #baee ,,9 ,,! ,,s5ate ,,( ,,! ,,unit$ ,,/ates ,july #ag1 #bjai ,ms4 ,w>r5 7= h]self1 ,ms4 ,baldw91 ,mrs4 ,gillibr&1 ,mr4 ,br[n1 & ,mr4 ,s&]s7 introduc$ ! foll[+ bill2 :i* 0 read twice & ref]r$ to ! ,committee on ,f9ance ,a ,,bill ,to require ! ,securities & ,ex*ange ,commission to issue rules requir+ private funds to publicly disclose c]ta9 in=mation1 & = o!r purposes4 #a4 ,%ort title2 table ( cont5ts 7a7 ,%ort title ,?is ,act may be cit$ z ! ,/op ,wall ,/reet ,loot+ ,act4 7b7 ,table ( cont5ts ,! table ( cont5ts = ?is ,act is z foll[s3 ,sec4 #a4 ,%ort title2 table ( cont5ts4 ,sec4 #b4 ,f9d+s4 ,sec4 #c4 ,def9itions4 ,,title ,i--,corporate responsibility ,sec4 #aja4 ,jo9t & sev]al liability = controll+ private funds4 ,sec4 #ajb4 ,jo9t & sev]al liability = hold]s ( economic int]e/s 9 controll+ private funds4 ,sec4 #ajc4 ,indemnification void z aga9/ public policy4 ,,title ,,ii--,anti-loot+ ,sec4 #bja4 ,limitations on po/-acquisition divid5ds1 di/ributions1 r$emptions1 & buybacks4 ,sec4 #bjb4 ,prev5tion ( fraudul5t transf]s4 ,sec4 #bjc4 ,surtax on c]ta9 am\nts receiv$ by inve/m5t firms f controll$ t>get firms4 ,sec4 #bjd4 ,limitation on d$uction = bus9ess int]e/ ( c]ta9 bus9esses own$ by private funds4 ,,title ,,iii--,protect+ work]s :5 companies g bankrupt ,sec4 #cja4 ,increas$ priority = wages4 ,sec4 #cjb4 ,priority = sev]ance pay & contributions to employee b5efit plans4 ,sec4 #cjc4 ,priority = violations ( ,f$]al & ,/ate laws4 ,sec4 #cjd4 ,limitation on executive comp5sation enhancem5ts4 ,sec4 #cje4 ,prohibition aga9/ special comp5sation paym5ts4 ,sec4 #cjf4 ,executive comp5sation ^u exit f bankruptcy4 ,sec4 #cjg4 ,collat]al sur*>ge = employee obligations4 ,sec4 #cjh4 ,voidability ( pref]5tial comp5sation transf]s4 ,sec4 #cji4 ,protection = employees 9 a sale ( assets4 ,sec4 #caj4 ,protection ( gift c>d pur*as]s4 ,sec4 #caa4 ,comm]cial real e/ate4 ,,title ,,iv--,clos+ ! c>ri$ int]e/ loophole ,sec4 #dja4 ,am5dm5t ( #aihf ,code4 ,sec4 #djb4 ,p>tn]%ip int]e/s transf]r$ 9 connection ) p]=mance ( s]vices4 ,sec4 #djc4 ,special rules = p>tn]s provid+ inve/m5t managem5t s]vices to p>tn]%ips4 ,,title ,v--,inve/or protection & m>ket transp>5cy ,sec4 #eja4 ,disclosure ( fees & returns4 ,sec4 #ejb4 ,fiduci>y obligations4 ,sec4 #ejc4 ,disclosures relat+ to ! m>ket+ ( private equity funds4 ,,title ,,vi--,re/rictions on securitiz+ risky corporate debt ,sec4 #fja4 ,risk ret5tion requirem5ts = securitization ( corporate debt4 ,,title ,,vii--,miscellane\s ,sec4 #gja4 ,anti-evasion4 ,sec4 #gjb4 ,sev]ability4 #b4 ,f9d+s ,congress f9ds ! foll[+3 7#a7 ,dur+ ! #bj-ye> p]iod prec$+ ! date ( enactm5t ( ?is ,act1 activity by private equity funds has explod$4 7#b7 ,millions ( p 9 communities across ! ,unit$ ,/ates rely on companies t are own$ by private equity funds1 includ+ almo/ #e1hjj1jjj individuals :o "w = companies own$ by ^? funds4 ,= millions ( additional individuals1 a private inve/m5t fund acts z a l&lord1 a l5d]1 or an own] ( a local groc]y /ore1 newspap]1 or hospital4 ,_m p5sion funds are also inve/ors 9 private inve/m5t funds4 7#c7 ,private inve/m5t funds h tak5 controll+ /akes 9 companies 9 a wide v>iety ( indu/ries1 includ+ ! f9ancial s]vices1 real e/ate1 m$ia1 & heal?c>e indu/ries1 b "s ( ! l>ge/ impacts f private inve/m5t funds h be5 9 ! retail sector4 ,9 ! #b ye>s prec$+ ! date ( enactm5t ( ?is ,act1 cases h be5 comm5c$ "u title #aa1 ,unit$ ,/ates ,code1 ) respect to doz5s ( retail]s 9 ! ,unit$ ,/ates1 includ+ ,se>s1 ,toys ,r ,u1 ,%opko1 ,payless ,shoe,source1 ,*>lotte ,russe1 ,bon-,ton1 ,n9e ,we/1 ,david's ,bridal1 ,claire's1 & ,s\!a/]n ,groc]s1 :i* 0 ! p>5t company = ,,bi-,,lo & ,w9n-,dixie4 7#d7 ,private inve/m5t funds h also t>get$ entities t s]ve l[-income or vuln]able populations1 includ+ af=dable h\s+ developm5ts1 =-pr(it colleges1 payday l5d]s1 m$ical provid]s1 & nurs+ homes4 7#e7 ,:ile private inve/m5t funds (t5 purport to take ov] /ruggl+ companies & make ^? companies viable1 ! opposite is (t5 true4 ,lev]ag$ buy\ts impose enorm\s debt loads on o!rwise viable companies & !n /rip ^? companies ( assets1 hobbl+ ! op]ations ( ^? companies & prev5t+ !m f mak+ necess>y inve/m5ts = future gr[?4 ,if an inve/m5t goes well1 ! fund reaps mo/ ( ! rew>ds1 b if ! inve/m5t does n g well1 work]s & cu/om]s ( ! company1 & ! community rely+ on ! company1 suff]4 7#f7 ,reg>dless ( ! p]=mance ( a private inve/m5t fund1 ! manag]s ( ! fund (t5 make pr(its ?r\gh fees1 divid5ds1 & o!r f9ancial eng9e]+4 ,private funds %\ld h a /ake 9 ! outcome ( _! inve/m5ts1 enjoy+ returns if ^? inve/m5ts are successful b absorb+ losses if ^? inve/m5ts fail4 7#g7 ,:5 a case is comm5c$ "u title #aa1 ,unit$ ,/ates ,code1 ) respect to a portfolio company1 work]s n only lose jobs1 b also lose wages & b5efits t are ow$1 sev]ance pay t has be5 promis$1 & p5sions t h be5 e>n$4 ,work]s %\ld n be s5t to ! back ( ! l9e beh9d o!r cr$itors if1 ?r\gh no fault ( ^? work]s1 an inve/m5t fails4 7#h7 ,! p]=mance ( private inve/m5t funds is cloak$ 9 secrecy4 ,^? funds h full control ov] ! in=mation t ! funds disclose to inve/ors1 :i* all[s ! funds to manufacture _! own p]=mance metrics & makes x difficult = an inve/or to comp>e ! returns to o!r inve/m5t options4 ,funds also increas+ly require inve/ors to waive ! fiduci>y obligations applicable to ! funds4 ,inve/ors %\ld h ! in=mation & b>ga9+ p[] to take control ov] _! own inve/m5ts4 7#i7 ,an increas+ am\nt ( risky debt is be+ introduc$ into ! m>ket & ! quality ( t debt is det]iorat+1 rais+ conc]ns ) regulators & lawmak]s ab\t sy/emic risk4 ,! in/itutions t make & securitize risky loans collect l>ge fees & !n pass on risk to unwitt+ inve/ors4 ,! f9ancial sy/em %\ld n be> all ( ! risk :ile l5d]s & securitiz]s reap ! rew>ds4 7#aj7 ,! ,f$]al ,gov]nm5t %\ld-- 7,a7 protect work]s1 companies1 consum]s1 & inve/ors 9 ! ,unit$ ,/ates2 & 7,b7 put an end to ! practice ( loot+ ( economically viable companies = ! enri*m5t ( private inve/m5t fund manag]s4 #c4 ,def9itions ,9 ?is ,act3 7#a7 ,affiliate ,! t]m affiliate means-- 7,a7 a p]son t directly or indirectly owns1 controls1 or holds ) p[] to vote1 #bj p]c5t or m ( ! out/&+ vot+ securities ( ano!r entity1 o!r ?an a p]son t holds su* securities-- 7i7 9 a fiduci>y or ag5cy capacity )\t sole discretion>y p[] to vote su* securities2 or 7ii7 solely to secure a debt1 if su* entity has n 9 fact ex]cis$ su* p[] to vote2 7,b7 a corporation #bj p]c5t or m ( ^: out/&+ vot+ securities are directly or indirectly own$1 controll$1 or held ) p[] to vote1 by ano!r entity 7ref]r$ to 9 ?is subp>agraph z a cov]$ entity71 or by an entity t directly or indirectly owns1 controls1 or holds ) p[] to vote1 #bj p]c5t or m ( ! out/&+ vot+ securities ( ! cov]$ entity1 o!r ?an an entity t holds su* securities-- 7i7 9 a fiduci>y or ag5cy capacity )\t sole discretion>y p[] to vote su* securities2 or 7ii7 solely to secure a debt1 if su* entity has n 9 fact ex]cis$ su* p[] to vote2 7,c7 a p]son ^: bus9ess is op]at$ "u a lease or op]at+ agreem5t by ano!r entity1 or p]son sub/antially all ( ^: prop]ty is op]at$ "u an op]at+ agreem5t ) t o!r entity2 or 7,d7 an entity t op]ates ! bus9ess or sub/antially all ( ! prop]ty ( ano!r entity "u a lease or op]at+ agreem5t4 7#b7 ,capital di/ribution ,! t]m capital di/ribution means-- 7,a7 a ca% or %>e divid5d2 7,b7 a %>e repur*ase2 7,c7 a %>e r$emption2 7,d7 a %>e buyback2 7,e7 a paym5t ( int]e/ or fee on a %>e ( /ock2 & 7,f7 any o!r transaction simil> to a transaction describ$ 9 subp>agraphs 7,a7 ?r\gh 7,e74 7#c7 ,*ange 9 control ,! t]m *ange 9 control means a *ange ( economic int]e/ ) respect to-- 7,a7 ! p[] to vote m ?an #ej p] c5tum ( any class ( vot+ securities ( a corporation t engages 9 int]/ate comm]ce2 or 7,b7 any less] p] c5tum ( any class ( vot+ securities ( a corporation t engages 9 int]/ate comm]ce t is suffici5t to make ! acquir] ( su* an int]e/ a p]son t has ! ability to direct ! actions ( t corporation4 7#d7 ,*ange 9 control transaction ,! t]m *ange 9 control transaction means a transaction t effects a *ange 9 control4 7#e7 ,commission ,! t]m ,commission means ! ,securities & ,ex*ange ,commission4 7#f7 ,control p]son ,! t]m control p]son-- 7,a7 means-- 7i7 a p]son-- 7,i7 t directly or indirectly owns1 controls1 or holds ) p[] to vote1 includ+ ?r\gh coord9ation ) o!r p]sons1 #bj p]c5t or m ( ! out/&+ vot+ int]e/s ( a t>get firm2 or 7,,ii7 t op]ates ! bus9ess or sub/antially all ( ! prop]ty ( a t>get firm "u a lease or op]at+ agreem5t2 7ii7 a corporation1 o!r ?an a t>get firm1 t has #bj p]c5t or m ( its out/&+ vot+ int]e/s directly or indirectly own$1 controll$1 or held ) p[] to vote by a p]son t directly or indirectly owns1 controls1 or holds ) p[] to vote1 includ+ ?r\gh coord9ation ) o!r p]sons1 #bj p]c5t or m ( ! out/&+ vot+ int]e/s ( a t>get firm2 & 7iii7 a p]son t o!rwise has ! ability to direct ! actions ( a t>get firm2 & 7,b7 does n include a p]son t-- 7i7 holds ! vot+ int]e/s ( a corporation solely-- 7,i7 9 a fiduci>y or ag5cy capacity )\t sole discretion>y p[] to vote ! securities2 or 7,,ii7 to secure a debt1 if ! p]son has n ex]cis$ ! p[] to vote2 or 7ii7 7,i7 is a limit$ p>tn] ) respect to a p]son describ$ 9 subp>agraph 7,a7 t is a p>tn]%ip2 & 7,,ii7 does n p>ticipate 9 ! direction ( ! managem5t or policy ( a corporation4 7#g7 ,corporation ,! t]m corporation means-- 7,a7 a jo9t-/ock company2 7,b7 a company or p>tn]%ip association organiz$ "u a law t makes only ! capital subscrib$ or callable up to a specifi$ am\nt responsible = ! debts ( ! association1 includ+ a limit$ p>tn]%ip & a limit$ liability company2 7,c7 a tru/2 & 7,d7 an association hav+ a p[] or privilege t a private corporation1 b n an individual or a p>tn]%ip1 possesses4 7#h7 ,hold] ( an economic int]e/ ,! t]m hold] ( an economic int]e/-- 7,a7 means a p]son t directly or indirectly has an economic int]e/ 9 a corporation or a "r to p>ticipate 9 ! gov]nance ( a corporation1 )\t reg>d to ! =m or s\rce ( t int]e/ or "r2 7,b7 if ! economic int]e/ describ$ 9 subp>agraph 7,a7 is a security1 does n include-- 7i7 an individual :o is engag$ 9 bus9ess z an und]writ] ( securities & :o acquires t security ?r\gh ! good fai? p>ticipation ( ! individual 9 a firm commitm5t und]writ+ regi/]$ "u ! ,securities ,act ( #aicc 7#ae ,u4,s4,c4 #gg;b7 until ! date t is #dj days aft] ! date on :i* t acquisition occurs2 or 7ii7 a memb] ( a national securities ex*ange solely because t memb] is ! record hold] ( t security &1 "u ! rules ( t ex*ange-- 7,i7 may direct ! vote ( t security1 )\t in/ruction1 on-- 7aa7 o!r ?an conte/$ matt]s2 or 7bb7 matt]s t may sub/antially affect ! rights or privileges ( ! hold]s ( ! security to be vot$2 & 7,,ii7 is o!rwise preclud$ f vot+ )\t in/ruction2 & 7,c7 does n include-- 7i7 a p]son t holds an economic int]e/ solely to secure a debt if t p]son does n ex]cise any vot+ o!r gov]nance rights ) respect to ! int]e/2 or 7ii7 a p]son t is n an insid] ) respect to a control p]son4 7#i7 ,insid] ,! t]m insid] means any-- 7,a7 director ( a corporation2 7,b7 (fic] ( a corporation2 7,c7 manag+ ag5t ( a corporation2 7,d7 control p]son ) respect to a corporation2 7,e7 affiliate ( a corporation2 7,f7 consultant or contractor reta9$ by a corporation2 7,g7 affiliate1 relative1 or ag5t ( a p]son describ$ 9 any ( subp>agraphs 7,a7 ?r\gh 7,e72 & 7,h7 affiliate1 relative1 or ag5t ( a p]son describ$ 9 subp>agraph 7,g74 7#aj7 ,inve/m5t advis] ,! t]m inve/m5t advis] has ! mean+ giv5 ! t]m 9 section #bjb7;a7 ( ! ,inve/m5t ,advis]s ,act ( #aidj 7#ae ,u4,s4,c4 #hj;b-#b7;a774 7#aa7 ,issu] ,! t]m issu] has ! mean+ giv5 ! t]m 9 section #c7;a7 ( ! ,securities ,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4 #gh;c7a774 7#ab7 ,national securities ex*ange ,! t]m national securities ex*ange means an ex*ange t is regi/]$ z a national securities ex*ange "u section #f ( ! ,securities ,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4 #gh;f74 7#ac7 ,private fund ,except z o!rwise expressly provid$1 ! t]m private fund-- 7,a7 means a company or p>tn]%ip t-- 7i7 w\ld be consid]$ an inve/m5t company "u section #c ( ! ,inve/m5t ,company ,act ( #aidj 7#ae ,u4,s4,c4 #hj;a-#c7 b = ! application ( p>agraph 7#a7 or 7#g7 ( subsection 7c7 ( su* section #c2 7ii7 directly or ?r\gh an affiliate1 acts z a control p]son2 & 7iii7 is n a v5ture capital fund1 z def9$ 9 section #bge4bjc7l7-#a ( title #ag1 ,code ( ,f$]al ,regulations1 z 9 effect on ! date ( enactm5t ( ?is ,act2 & 7,b7 does n include an in/itution select$ "u section #ajg ( ! ,community ,developm5t ,bank+ & ,f9ancial ,in/itutions ,act ( #aiid 7#ab ,u4,s4,c4 #dgjf74 7#ad7 ,relative ,! t]m relative has ! mean+ giv5 ! t]m 9 section #aja ( title #aa1 ,unit$ ,/ates ,code4 7#ae7 ,t>get firm ,! t]m t>get firm means a corporation t is acquir$ 9 a *ange 9 control transaction4 ,i ,corporate responsibility #aja4 ,jo9t & sev]al liability = controll+ private funds 7a7 ,9 g5]al ,not)/&+ any o!r provision ( law1 or ! t]ms ( any contract or agreem5t1 a private fund %all be jo9tly & sev]ally liable = all liabilities ( ea* t>get firm ) respect to ! private fund1 & any affiliate ( su* a t>get firm1 includ+-- 7#a7 any debt incurr$ by ! t>get firm or an affiliate ( ! t>get firm1 includ+ z "p ( ! acquisition ( ! t>get firm by ! private fund2 7#b7 any ,f$]al or ,/ate civil monet>y p5alty1 or obligation "u a settlem5t or cons5t ord] ) a ,f$]al or ,/ate gov]nm5tal ag5cy or in/rum5tality1 includ+ a consum] re/itution obligation1 = :i* ! t>get firm1 or an affiliate ( ! t>get firm1 is liable2 7#c7 any liability result+ f a violation ( section #c ( ! ,work] ,adju/m5t & ,retra9+ ,notification ,act 7#bi ,u4,s4,c4 #bajb7 by ! t>get firm or an affiliate ( ! t>get firm2 7#d7 any )drawal liability det]m9$ "u "p #a ( subtitle ,e ( title ,,iv ( ! ,employee ,retirem5t ,income ,security ,act ( #aigd 7#bi ,u4,s4,c4 #acha et seq47 t is incurr$ by ! t>get firm or an affiliate ( ! t>get firm2 & 7#e7 any claim = unfund$ b5efit liabilities ow$ to ! ,p5sion ,b5efit ,gu>anty ,corporation "u subtitle ,d ( title ,,iv ( ! ,employee ,retirem5t ,income ,security ,act ( #aigd 7#bi ,u4,s4,c4 #acfa et seq47 ) respect to ! t]m9ation ( a p5sion plan sponsor$ by ! t>get firm or an affiliate ( ! t>get firm4 7b7 ,rule ( con/ruction ,no?+ 9 ?is section may be con/ru$ to dim9i% exi/+1 z ( ! date ( ?is ,act1 controll$ gr\p liability "u ! ,employee ,retirem5t ,income ,security ,act ( #aigd 7#bi ,u4,s4,c4 #ajja et seq474 #ajb4 ,jo9t & sev]al liability = hold]s ( economic int]e/s 9 controll+ private funds 7a7 ,9 g5]al ,not)/&+ any o!r provision ( law1 or ! t]ms ( any contract or agreem5t1 a hold] ( an economic int]e/ 9 a private fund %all be jo9tly & sev]ally liable = all liabilities ( ea* t>get firm ) respect to ! private fund1 & any affiliate ( su* a t>get firm1 includ+-- 7#a7 any debt incurr$ by ! t>get firm or an affiliate ( ! t>get firm1 includ+ z "p ( ! acquisition ( ! t>get firm by ! private fund2 7#b7 any ,f$]al or ,/ate civil monet>y p5alty1 or obligation "u a settlem5t or cons5t ord] ) a ,f$]al or ,/ate gov]nm5tal ag5cy or in/rum5tality1 includ+ a consum] re/itution obligation1 = :i* ! t>get firm1 or an affiliate ( ! t>get firm1 is liable2 7#c7 any liability result+ f a violation ( section #c ( ! ,work] ,adju/m5t & ,retra9+ ,notification ,act 7#bi ,u4,s4,c4 #bajb7 by ! t>get firm or an affiliate ( ! t>get firm2 7#d7 any )drawal liability det]m9$ "u "p #a ( subtitle ,e ( title ,,iv ( ! ,employee ,retirem5t ,income ,security ,act ( #aigd 7#bi ,u4,s4,c4 #acha et seq47 t is incurr$ by ! t>get firm or an affiliate ( ! t>get firm2 & 7#e7 any claim = unfund$ b5efit liabilities ow$ to ! ,p5sion ,b5efit ,gu>anty ,corporation "u subtitle ,d ( title ,,iv ( ! ,employee ,retirem5t ,income ,security ,act ( #aigd 7#bi ,u4,s4,c4 #acfa et seq47 ) respect to ! t]m9ation ( a p5sion plan sponsor$ by ! t>get firm or an affiliate ( ! t>get firm4 7b7 ,rule ( con/ruction ,no?+ 9 ?is section may be con/ru$ to dim9i% exi/+1 z ( ! date ( ?is ,act1 controll$ gr\p liability "u ! ,employee ,retirem5t ,income ,security ,act ( #aigd 7#bi ,u4,s4,c4 #ajja et seq474 #ajc4 ,indemnification void z aga9/ public policy ,x %all be void z aga9/ public policy = a t>get firm1 or an affiliate ( a t>get firm1 to indemnify a private fund t is a control p]son ) respect to ! t>get firm1 or any affiliate ( ! t>get firm1 ) respect to ! liabilities ( ! fund or ! affiliate1 z applicable1 "u sections #aja & #ajb4 ,,ii ,anti-loot+ #bja4 ,limitations on po/-acquisition divid5ds1 di/ributions1 r$emptions1 & buybacks 7a7 ,9 g5]al ,no t>get firm may1 dur+ ! #b-ye> p]iod beg9n+ on ! clos+ date ( a *ange 9 control transaction t results 9 control ( ! t>get firm by a private fund-- 7#a7 make a capital di/ribution or simil>ly r$uce ! equity capital ( ! t>get firm2 or 7#b7 incur an obligation t commits ! t>get firm to mak+ a capital di/ribution or a simil> r$uction ( ! equity capital ( ! t>get firm aft] ! end ( t #b-ye> p]iod4 7b7 ,void ,any transf] made or obligation incurr$ by a t>get firm or an affiliate ) respect to a t>get firm 9 violation ( subsection 7a7 %all be void4 7c7 ,jo9t & sev]al liability = aid]s & abettors ,any control p]son t is a private fund1 any hold] ( an economic int]e/ 9 a control p]son t is a private fund1 or any affiliate ( a t>get firm t aids1 abets1 facilitates1 supports1 or in/ructs any violation ( subsection 7a7 %all be jo9tly & sev]ally liable "u ?is subsection = any transf] made or obligation incurr$1 includ+ = reasonable attorney's fees & co/s aw>d$ to a pla9tiff "u subsection 7d77#b74 7d7 ,cause ( action 7#a7 ,9 g5]al ,any employee or cr$itor1 or repres5tative ( an employee or cr$itor1 ( a t>get firm t is a debtor "u title #aa1 ,unit$ ,/ates ,code1 or ( an affiliate ( a t>get firm t is su* a debtor1 may br+ an action 9 an appropriate di/rict c\rt ( ! ,unit$ ,/ates aga9/ ! direct or indirect transf]ee or obligee or b5efici>y ( ! transf] or obligation to void ! transf] or obligation & recov] any transf]r$ prop]ty = ! t>get firm4 7#b7 ,aw>d ,9 a successful action to recov] a transf]1 ! c\rt %all also aw>d ! pla9tiff reasonable attorney's fees & co/s4 #bjb4 ,prev5tion ( fraudul5t transf]s 7a7 ,limitation on safe h>bors ,section #edf7;e7 ( title #aa1 ,unit$ ,/ates ,code1 is am5d$ by ins]t+ aft] #edh7;b7 ( ?is title1 ! foll[+3 & except 9 ! case ( a transf] made 9 connection ) a *ange 9 control transaction1 z def9$ 9 section #c ( ! ,/op ,wall ,/reet ,loot+ ,act1 or dur+ ! protect$ p]iod1 z def9$ 9 section #edh7;f7 ( ?is title14 7b7 ,presumption ( insolv5cy 9 transf]s und]tak5 9 connection ) *ange 9 control transactions ,section #edh ( title #aa1 ,unit$ ,/ates ,code1 is am5d$ by add+ at ! end ! foll[+3 7f7 7#a7 ,9 ?is subsection-- 7,a7 ! t]ms *ange 9 control transaction1 control p]son1 & t>get firm h ! mean+s giv5 ^? t]ms 9 section #c ( ! ,/op ,wall ,/reet ,loot+ ,act2 & 7,b7 ! t]m protect$ p]iod means ! %ort] (-- 7i7 ! #h-ye> p]iod beg9n+ on ! date on :i* a *ange 9 control transaction clos$2 or 7ii7 ! p]iod beg9n+ on ! date on :i* a *ange 9 control transaction clos$ & end+ on ! e>lie/ subsequ5t date on :i* a public (f]+ ( a controll+ %>e ( ! common equity securities ( ! t>get firm occurs4 7#b7 ,= purposes ( ?is section1 ! debtor is presum$ to h made a transf] or incurr$ an obligation describ$ 9 subp>agraphs 7,a7 & 7,b7 ( subsection 7a77#a7 if-- 7,a7 ! transf] is made to or obligation is incurr$ by a t>get firm or an affiliate 9 connection ) a *ange 9 control transaction2 or 7,b7 ! transf] is made to a t>get firm or an affiliate by1 or obligation is incurr$ by a t>get firm or an affiliate f1 a control p]son1 an affiliate1 or an insid] dur+ a protect$ p]iod4 7#c7 ,= ! purposes ( ?is section1 a c\rt %all1 9 analyz+ relat$ transactions1 l9k toge!r z a s+le transaction any int]relat$ yet =mally di/9ct /eps 9 an integrat$ transaction 7commonly kn[n z ! /ep transaction doctr9e74 4 7c7 ,/atute ( limitations ,section #ccjf7;b7 ( title #bh1 ,unit$ ,/ates ,code1 is am5d$-- 7#a7 9 p>agraph 7#b71 by /rik+ or at ! end2 7#b7 9 p>agraph 7#c71 by /rik+ ! p]iod at ! end & ins]t+ 2 or2 & 7#c7 by add+ at ! end ! foll[+3 7#d7 )9 #h ye>s aft] ! transf] 0 made or ! obligation 0 incurr$1 if ! transf] 0 made or ! obligation 0 incurr$-- 7,a7 9 connection ) a *ange 9 control transaction1 z def9$ 9 section #c ( ! ,/op ,wall ,/reet ,loot+ ,act2 or 7,b7 dur+ a protect$ p]iod1 z def9$ 9 section #edh7;f7 ( title #aa4 4 #bjc4 ,surtax on c]ta9 am\nts receiv$ by inve/m5t firms f controll$ t>get firms 7a7 ,imposition ( tax ,sub*apt] ,a ( *apt] #a ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new "p3 ,,viii ,surtax on c]ta9 am\nts receiv$ by inve/m5t firms ,sec4 #ei;,b4 ,surtax on c]ta9 am\nts receiv$ by inve/m5t firms f controll$ t>get firms4 #ei;,b4 ,surtax on c]ta9 am\nts receiv$ by inve/m5t firms f controll$ t>get firms 7a7 ,imposition ( tax 7#a7 ,9 g5]al ,if "o or m applicable paym5ts are includ$ 9 ! gross income ( a taxpay] = any taxable ye>1 !n !re is h]eby impos$ on ! taxpay] = ! taxable ye> a tax equal to ! applicable p]c5tage ( ! aggregate am\nt ( su* paym5ts4 ,su* tax %all be 9 addition to any o!r tax impos$ by ?is subtitle4 7#b7 ,applicable p]c5tage ,= purposes ( ?is subsection1 ! t]m applicable p]c5tage means #ajj p]c5t1 m9us ! highe/ rate ( tax "u section #a or #aa 7:i*ev] is applicable7 = ! taxable ye>4 7b7 ,applicable paym5t ,= purposes ( ?is section-- 7#a7 ,9 g5]al ,! t]m applicable paym5t means any am\nt paid or incurr$ by an applicable entity 7or any p]son relat$ )9 ! mean+ ( section #bfg7;b7 or #gjg7;b7 to su* entity7 to any o!r p]son :i*1 at ! "t su* am\nt is paid or incurr$1 is an applicable controll+ entity4 ,an am\nt %all be treat$ z an applicable paym5t )\t reg>d to :e!r x is paid or incurr$ to ! taxpay] includ+ x 9 gross income & to :i* subsection 7a7 applies4 7#b7 ,exceptions ,su* t]m %all n include any ( ! foll[+3 7,a7 ,int]e/ ,any am\nt paid or incurr$ :i* is treat$ z int]e/ = purposes ( ?is *apt]4 7,b7 ,di/ributions ( prop]ty ) respect to /ock ,any di/ribution ( prop]ty 7z def9$ 9 section #cag7;a77 to :i* section #cja7;a7 applies4 7c7 ,def9itions relat+ to entities ,= purposes ( ?is section-- 7#a7 ,applicable entity ,! t]m applicable entity means any p]son-- 7,a7 :i* is engag$ 9 ! active conduct ( a trade or bus9ess1 & 7,b7 ) respect to :i* any o!r p]son conducts activities 9 connection ) an applicable trade or bus9ess4 7#b7 ,applicable controll+ entity ,! t]m applicable controll+ entity means1 ) respect to any applicable entity1 any p]son-- 7,a7 :i* is engag$ 9 an applicable trade or bus9ess "s or all ( ! activities ( :i* are conduct$ 9 connection ) ! applicable entity1 & 7,b7 :i* controls 7or is relat$ )9 ! mean+ ( section #bfg7;b7 or #gjg7;b7 to a p]son :i* controls7 ! applicable entity4 7#c7 ,applicable trade or bus9ess ,! t]m applicable trade or bus9ess means any activity conduct$ on a regul>1 cont9u\s1 & sub/antial basis :i*1 reg>dless ( :e!r ! activity is conduct$ 9 "o or m entities1 consi/s1 9 :ole or 9 "p1 (-- 7,a7 rais+ or return+ capital1 & 7,b7 ei!r-- 7i7 inve/+ 9 or dispos+ ( specifi$ assets 7or id5tify+ specifi$ assets = su* inve/+ or disposition71 or 7ii7 develop+ specifi$ assets4 7#d7 ,specifi$ asset ,! t]m specifi$ asset means-- 7,a7 securities 7z def9$ 9 section #dge7;c77#b7 b )\t reg>d to ! phrase widely held or publicly trad$ 9 subp>agraph 7,b7 !re( & )\t reg>d to ! la/ s5t5ce !re(71 & 7,b7 real e/ate held = r5tal or inve/m5t4 7d7 ,rules & def9itions relat+ to own]%ip attribution & control ,= purposes ( ?is section-- 7#a7 ,con/ructive own]%ip rules us$ 9 det]m9+ relat$ p>ty ,9 det]m9+ :e!r p]sons are relat$ )9 ! mean+ ( section #bfg7;b7 or #gjg7;b71 ! con/ructive own]%ip rules ( section #cah %all apply 9 lieu ( ! con/ructive own]%ip rules :i* w\ld o!rwise apply1 except t 9 apply+ su* rules ! t]m /ock %all include capital1 pr(its1 or o!r b5eficial int]e/s 9 p]sons o!r ?an corporations4 7#b7 ,control 7,a7 ,corporations ,9 ! case ( a corporation1 ! t]m control has ! mean+ giv5 su* t]m by section #cjd7;c7 7)\t reg>d to p>agraph 7#c77;,b7 !re(74 7,b7 ,o!r entities ,9 ! case ( a p]son o!r ?an a corporation1 su* t]m means ! own]%ip1 directly or indirectly1 ( at lea/ #ej p]c5t ( ! capital1 pr(its1 or o!r b5eficial int]e/s 9 ! p]son4 7e7 ,regulations ,! ,secret>y %all prescribe su* regulations or o!r guidance z may be necess>y or appropriate to c>ry out ! provisions ( ?is section1 includ+ regulations-- 7#a7 provid+ = su* adju/m5ts to ! application ( ?is section z are necess>y to prev5t ! avoidance ( ! purposes ( ?is section1 includ+ ?r\gh ! use ( unrelat$ p]sons1 or conduit transactions1 & 7#b7 modify+ ! con/ructive own]%ip rules "u section #cah to ! ext5t necess>y to apply su* rules to capital1 pr(its1 or o!r b5eficial int]e/s z well z /ock4 4 7b7 ,disall[ance ( cr$its aga9/ tax ,subp>agraph 7,b7 ( section #bf7;b77#b7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by ins]t+ or section #ei;,b 7relat+ to surtax on c]ta9 am\nts receiv$ by inve/m5t firms f controll$ t>get firms7 aft] anti-abuse tax74 7c7 ,con=m+ am5dm5ts 7#a7 ,! table ( p>ts = sub*apt] ,a ( *apt] #a ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ aft] ! item relat+ to "p ,,vii ! foll[+ new item3 ,"p ,,viii4 ,surtax on c]ta9 am\nts receiv$ by inve/m5t firms 4 7#b7 ,section #hga7;b77#a7 ( su* ,code is am5d$ by ins]t+ & %all be taxable z provid$ 9 section #ei;,b on applicable paym5ts includ$ 9 gross income :i* are effectively connect$ ) ! conduct ( a trade or bus9ess )9 ! ,unit$ ,/ates aft] ,unit$ ,/ates4 7#c7 ,section #hhb7;a77#a7 ( su* ,code is am5d$ by ins]t+ & %all be taxable z provid$ 9 section #ei;,b on applicable paym5ts includ$ 9 gross income :i* are effectively connect$ ) ! conduct ( a trade or bus9ess )9 ! ,unit$ ,/ates aft] ,unit$ ,/ates4 7#d7 ,subp>agraph 7,a7 ( section #fdbe7;c77#a7 ( su* ,code is am5d$ by /rik+ plus at ! end ( clause 7i71 by /rik+ ov] at ! end ( clause 7ii7 & ins]t+ plus & by add+ at ! end ! foll[+ new clause3 7iii7 ! tax impos$ by section #ei;,b1 ov] 4 7#e7 ,p>agraph 7#a7 ( section #ffed7;f7 ( su* ,code is am5d$ by /rik+ tax ea* place x appe>s & ins]t+ taxes4 7#f7 ,subp>agraph 7,a7 ( section #ffee7;g77#a7 ( su* ,code is am5d$ by /rik+ plus at ! end ( clause 7ii71 by r$esignat+ clause 7iii7 z clause 7iv71 & by ins]t+ aft] clause 7ii7 ! foll[+ new clause3 7iii7 ! tax impos$ by section #ei;,b1 plus 4 7d7 ,effective date ,! am5dm5ts made by ?is section %all apply to applicable paym5ts 7z def9$ 9 section #ei;,b7b7 ( ! ,int]nal ,rev5ue ,code ( #aihf1 z add$ by ?is section7 paid or accru$ on or aft] ! date ( enactm5t ( ?is ,act4 #bjd4 ,limitation on d$uction = bus9ess int]e/ ( c]ta9 bus9esses own$ by private funds 7a7 ,9 g5]al ,section #afc7;j7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by r$esignat+ p>agraph 7#aj7 z p>agraph 7#aa7 & by ins]t+ aft] p>agraph 7#i7 ! foll[+ new p>agraph3 7#aj7 ,modification ( limitation = c]ta9 bus9esses own$ by private firms 7,a7 ,9 g5]al ,9 ! case ( a taxpay] :i* is an applicable entity controll$ by an applicable controll+ entity 7or any p]son relat$ )9 ! mean+ ( section #bfg7;b7 or #gjg7;b7 to su* entity7 at any "t dur+ ! taxable ye>-- 7i7 if ! ratio ( debt to equity ( ! taxpay] z ( ! close ( ! taxable ye> 7or on any o!r day dur+ ! taxable ye> z ! ,secret>y may prescribe 9 regulations7 exce$s #a1 !n p>agraph 7#a7 %all be appli$ by sub/itut+ p]c5t = #cj p]c5t1 & 7ii7 9 ! case ( ! election "u p>agraph 7#g77;,b7 to treat any trade or bus9ess ( ! taxpay] z an elect+ real prop]ty trade or bus9ess-- 7,i7 ! taxpay] may n make any su* election dur+ su* taxable ye>1 & 7,,ii7 any su* election ( ! taxpay] 9 effect z ( ! close ( ! taxable ye> prec$+ su* taxable ye> ) respect to a trade or bus9ess %all be revok$1 effective = su* taxable ye> & all succe$+ taxable ye>s4 7,b7 ,ratio ( debt to equity ,= purposes ( ?is p>agraph1 ! t]m ratio ( debt to equity means1 ) respect to any taxpay]1 ! ratio :i* ! total indebt$ness ( ! taxpay] be>s to ! sum ( ! taxpay]'s money & all o!r assets r$uc$ 7b n bel[ z]o7 by su* total indebt$ness4 ,= purposes ( ! prec$+ s5t5ce-- 7i7 ! am\nt tak5 into acc\nt ) respect to any asset %all be ! adju/$ basis !re( = purposes ( det]m9+ ga91 7ii7 ! am\nt tak5 into acc\nt ) respect to any indebt$ness ) orig9al issue disc\nt %all be its issue price plus ! portion ( ! orig9al issue disc\nt previ\sly accru$ z det]m9$ "u ! rules ( section #abgb 7det]m9$ )\t reg>d to subsection 7a77#g7 or 7b77#d7 !re(71 & 7iii7 !re %all be su* o!r adju/m5ts z ! ,secret>y may by regulations prescribe4 7,c7 ,coord9ation ) depreciation rules ,if ! alt]native depreciation sy/em "u section #afh7;g7 applies to prop]ty by reason ( an election "u p>agraph 7#g77;,b7 :i* is revok$ "u subp>agraph 7,a77ii77,,ii71 !n ! depreciation d$uction "u section #afg7;a7 ) respect to su* prop]ty = ! taxable ye> ( revocation & all succe$+ taxable ye>s %all be det]m9$ "u section #afh 9 ! same mann] z if su* revocation 7 a *ange 9 use ( ! prop]ty "u section #afh7;i77#e7 & ! regulations !reund]4 7,d7 ,def9itions & rules ,= purposes ( ?is p>agraph-- 7i7 any t]m us$ 9 ?is p>agraph :i* is also us$ 9 section #ei;,b %all h ! same mean+ z :5 us$ 9 su* section1 & 7ii7 ! con/ructive own]%ip rules ( section #cah %all apply 9 ! same mann] z su* rules apply = purposes ( section #ei;,b4 4 7b7 ,effective dates 7#a7 ,9 g5]al ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ on or aft] ! date ( enactm5t ( ?is ,act4 7#b7 ,revocation ( elections ,subp>agraphs 7,a77ii77,,ii7 & 7,c7 ( section #afc7;j77#aj7 ( ! ,int]nal ,rev5ue ,code ( #aihf1 z add$ by ?is section1 %all apply to taxable ye>s beg9n+ on or aft] ! date ( enactm5t ( ?is ,act1 ) respect to elections "u section #afc7;j77#g77;,b7 ( su* ,code made be=e1 on1 or aft] su* date4 ,,iii ,protect+ work]s :5 companies g bankrupt #cja4 ,increas$ priority = wages ,section #ejg7;a7 ( title #aa1 ,unit$ ,/ates ,code1 is am5d$-- 7#a7 9 p>agraph 7#d7-- 7,a7 by r$esignat+ subp>agraphs 7,a7 & 7,b7 z clauses 7i7 & 7ii71 respectively2 7,b7 9 ! matt] prec$+ clause 7i71 z s r$esignat$1 by ins]t+ 7,a7 be=e ,f\r?2 7,c7 9 subp>agraph 7,a71 z s designat$1 9 ! matt] prec$+ clause 7i71 z s r$esignat$-- 7i7 by /rik+ #aj1jjj & ins]t+ #bj1jjj2 7ii7 by /rik+ )9 #ahj days2 & 7iii7 by /rik+ or ! date ( ! cessation ( ! debtor's bus9ess1 :i*ev] occurs fir/2 & 7,d7 by add+ at ! end ! foll[+3 7,b7 ,sev]ance pay describ$ 9 subp>agraph 7,a77i7 %all be deem$ e>n$ 9 full ^u ! lay(f or t]m9ation ( employm5t ( ! individual to :om ! sev]ance pay is ow$4 2 & 7#b7 9 p>agraph 7#e7-- 7,a7 9 subp>agraph 7,a7-- 7i7 by /rik+ )9 #ahj days2 & 7ii7 by /rik+ or ! date ( ! cessation ( ! debtor's bus9ess1 :i*ev] occurs fir/2 & 7,b7 by /rik+ subp>agraph 7,b7 & ins]t+ ! foll[+3 7,b7 = ea* su* plan1 to ! ext5t ( ! numb] ( employees cov]$ by ea* su* plan multipli$ by #bj1jjj4 4 #cjb4 ,priority = sev]ance pay & contributions to employee b5efit plans ,section #ejc7;b7 ( title #aa1 ,unit$ ,/ates ,code1 is am5d$-- 7#a7 9 p>agraph 7#h77;,b71 by /rik+ & at ! end2 7#b7 9 p>agraph 7#i71 by /rik+ ! p]iod & ins]t+ a semicolon2 & 7#c7 by add+ at ! end ! foll[+3 7#aj7 sev]ance pay ow$ to employees ( ! debtor 7o!r ?an to an insid] ( ! debtor or a s5ior executive (fic] ( ! debtor71 "u a plan1 program1 or policy g5]ally applicable to employees ( ! debtor 7b n "u an individual contract ( employm5t71 or ow$ pursuant to a collective b>ga9+ agreem5t1 = lay(f or t]m9ation on or aft] ! date ( ! fil+ ( ! petition1 :i* pay %all be deem$ e>n$ 9 full ^u su* lay(f or t]m9ation ( employm5t2 & 7#aa7 any contribution due on or aft] ! date ( ! fil+ ( ! petition "u an employee b5efit plan4 4 #cjc4 ,priority = violations ( ,f$]al & ,/ate laws 7a7 ,all[ance ( adm9i/rative exp5ses 9 bankruptcy cases ,section #ejc7;b77#a77;,a77ii7 ( title #aa1 ,unit$ ,/ates ,code1 is am5d$ by ins]t+ aft] 7ii7 ! foll[+3 any back pay1 civil p5alty1 or damages = a violation ( any ,f$]al or ,/ate labor & employm5t law1 includ+ ! ,work] ,adju/m5t & ,retra9+ ,notification ,act 7#bi ,u4,s4,c4 #baja et seq47 & any comp>able ,/ate law1 &4 7b7 ,adm9i/ration & en=cem5t ( work] adju/m5t & retra9+ notification requirem5ts ,section #e7;a77#a7 ( ! ,work] ,adju/m5t & ,retra9+ ,notification ,act 7#bi ,u4,s4,c4 #bajd7;a77#a77 is am5d$1 9 ! matt] foll[+ subp>agraph 7,b7-- 7#a7 by ins]t+ :i* = purposes ( ?is s5t5ce %all consi/ ( ! days1 9 ! notification p]iod1 t are or t foll[ ! date ( ! prohibit$ clos+ or lay(f "u ?is ,act1 aft] p]iod ( ! violation12 & 7#b7 by ins]t+ cal5d> aft] #fj4 #cjd4 ,limitation on executive comp5sation enhancem5ts ,section #ejc7;c7 ( title #aa1 ,unit$ ,/ates ,code1 is am5d$-- 7#a7 9 ! matt] prec$+ p>agraph 7#a71 by ins]t+ & subject to section #cfc7;b77#c71 aft] ,not)/&+ subsection 7b712 7#b7 9 p>agraph 7#a71 9 ! matt] prec$+ subp>agraph 7,a7-- 7,a7 by ins]t+ 1 a s5ior executive (fic] ( ! debtor1 or any ( ! #bj next mo/ highly comp5sat$ employees ( ! debtor1 dep>tm5t or division manag]s ( ! debtor1 or consultants provid+ s]vices to ! debtor 7reg>dless ( :e!r ! executive (fic]1 employee1 manag]1 or consultant is an insid]7 aft] insid] ( ! debtor2 7,b7 by ins]t+ or = ! paym5t ( p]=mance or inc5tive comp5sation1 a bonus ( any k9d1 or any o!r f9ancial return design$ to replace or enhance inc5tive1 /ock1 or o!r comp5sation 9 effect be=e ! date ( ! comm5cem5t ( ! case1 aft] rema9 ) ! debtor's bus9ess12 & 7,c7 by ins]t+ cle> & conv9c+ be=e evid5ce 9 ! record2 7#c7 9 p>agraph 7#b71 9 ! matt] prec$+ subp>agraph 7,a71 by ins]t+ 1 a s5ior executive (fic] ( ! debtor1 or any ( ! #bj next mo/ highly comp5sat$ employees ( ! debtor1 dep>tm5t or division manag]s ( ! debtor1 or consultants provid+ s]vices to ! debtor 7reg>dless ( :e!r ! executive (fic]1 employee1 manag]1 or consultant is an insid]7 aft] an insid] ( ! debtor2 & 7#d7 by /rik+ p>agraph 7#c7 & ins]t+ ! foll[+3 7#c7 any o!r transf] or obligation to or = ! b5efit ( an insid] ( ! debtor1 a s5ior executive (fic] ( ! debtor1 or any ( ! #bj next mo/ highly comp5sat$ employees ( ! debtor1 dep>tm5t or division manag]s ( ! debtor1 or consultants provid+ s]vices to ! debtor 7reg>dless ( :e!r ! executive (fic]1 employee1 manag]1 or consultant is an insid]71 abs5t a f9d+ by ! c\rt1 bas$ ^u cle> & conv9c+ evid5ce 9 ! record1 & )\t def]5ce to a reque/ by ! debtor = su* paym5t1 t-- 7,a7 because ( ! ess5tial & p>ticul>iz$ nature ( ! s]vices provid$ by ! insid]1 executive (fic]1 employee1 manag]1 or consultant1 ! transf] or obligation is ess5tial to-- 7i7 ! survival ( ! bus9ess ( ! debtor2 or 7ii7 9 a case 9 :i* "s or all ( ! assets ( ! debtor are liquidat$1 ! ord]ly liquidation ( ! assets2 7,b7 9 ! case ( a transf] or obligation "u an inc5tive program1 ! transf] or obligation is "p ( a work=ce inc5tive program g5]ally applicable to ! nonmanagem5t work=ce ( ! debtor2 & 7,c7 ! co/ ( ! transf] or obligation-- 7i7 is reasonable2 7ii7 is n excessive 9 ! context ( ! f9ancial circum/ances ( ! debtor2 & 7iii7 is n disproportionate 9 light ( any economic loss incurr$ by ! nonmanagem5t work=ce ( ! debtor dur+ ! case4 4 #cje4 ,prohibition aga9/ special comp5sation paym5ts ,section #cfc ( title #aa1 ,unit$ ,/ates ,code1 is am5d$-- 7#a7 9 subsection 7b71 by add+ at ! end ! foll[+3 7#c7 ,no plan1 program1 or o!r transf] or obligation to or = ! b5efit ( an insid] ( ! debtor1 a s5ior executive (fic] ( ! debtor1 or any ( ! #bj next mo/ highly comp5sat$ employees ( ! debtor1 dep>tm5t or division manag]s ( ! debtor1 or consultants provid+ s]vices to ! debtor 7reg>dless ( :e!r ! executive (fic]1 employee1 manag]1 or consultant is an insid]7 %all be approv$ if ! debtor has1 on or aft] ! date t is #a ye> be=e ! date ( ! fil+ ( ! petition-- 7,a7 discont9u$ any plan1 program1 policy or practice ( pay+ sev]ance pay to ! nonmanagem5t work=ce ( ! debtor2 or 7,b7 modifi$ any plan1 program1 policy1 or practice describ$ 9 subp>agraph 7,a7 9 ord] to r$uce b5efits "u ! plan1 program1 policy or practice4 2 & 7#b7 9 subsection 7c77#a71 by ins]t+ be=e ! p]iod at ! end ! foll[+3 1 except t1 = any transaction t con/itutes a transf] or obligation subject to section #ejc7;c71 ! tru/ee %all be requir$ to obta9 ! prior approval ( ! c\rt aft] notice & an opportunity = a he>+4 #cjf4 ,executive comp5sation ^u exit f bankruptcy ,section #aabi7;a7 ( title #aa1 ,unit$ ,/ates ,code1 is am5d$-- 7#a7 9 p>agraph 7#d71 by add+ at ! end ! foll[+3 ,except = comp5sation subject to review "u p>agraph 7#e71 any paym5t or o!r di/ribution "u ! plan to or = ! b5efit ( an insid] ( ! debtor1 a s5ior executive (fic] ( ! debtor1 or any ( ! #bj next mo/ highly comp5sat$ employees ( ! debtor1 dep>tm5t or division manag]s ( ! debtor1 or consultants provid+ s]vices to ! debtor 7reg>dless ( :e!r ! executive (fic]1 employee1 manag]1 or consultant is an insid]71 %all n be approv$ by ! c\rt except z "p ( a program ( paym5ts or di/ributions g5]ally applicable to employees ( ! debtor1 & only to ! ext5t t ! c\rt det]m9es t ! paym5t or o!r di/ribution is n excessive or disproportionate 9 comp>ison to paym5ts or o!r di/ributions to ! nonmanagem5t work=ce ( ! debtor42 & 7#b7 9 p>agraph 7#e7-- 7,a7 9 subp>agraph 7,a77ii71 by /rik+ & at ! end2 7,b7 9 subp>agraph 7,b71 by /rik+ ! p]iod at ! end & ins]t+ 2 &2 & 7,c7 by add+ at ! end ! foll[+3 7,c7 ! comp5sation disclos$ pursuant to subp>agraph 7,b7 has be5 approv$ by1 or is subject to ! approval (1 ! c\rt z-- 7i7 reasonable 9 comp>ison to comp5sation paid to individuals hold+ comp>able positions at comp>able companies 9 ! same indu/ry2 & 7ii7 n disproportionate 9 light ( any economic concession made by ! nonmanagem5t work=ce ( ! debtor dur+ ! case4 4 #cjg4 ,collat]al sur*>ge = employee obligations ,section #ejf7;c7 ( title #aa1 ,unit$ ,/ates ,code1 is am5d$-- 7#a7 by ins]t+ 7#a7 be=e ,! tru/ee2 & 7#b7 by add+ at ! end ! foll[+3 7#b7 ,if "o or m employees ( ! debtor h n receiv$ wages1 accru$ vacation1 sev]ance1 or any o!r comp5sation ow$ "u a plan1 program1 policy1 or practice ( ! debtor1 or pursuant to ! t]ms ( a collective b>ga9+ agreem5t1 = s]vices r5d]$ on or aft] ! date ( ! comm5cem5t ( ! case1 or ! debtor has n made a contribution due "u an employee b5efit plan on or aft] ! date ( ! comm5cem5t ( ! case1 su* unpaid obligations %all be-- 7,a7 deem$-- 7i7 reasonable1 necess>y co/s & exp5ses ( pres]v+1 or dispos+ (1 prop]ty secur+ an all[$ secur$ claim2 & 7ii7 b5efit+ ! hold] ( ! all[$ secur$ claim2 & 7,b7 recov]$ by ! tru/ee = paym5t to ! employees or ! employee b5efit plan1 z applicable1 ev5 if ! tru/ee1 or a pr$ecessor or successor 9 int]e/1 has o!rwise waiv$ ! provisions ( ?is subsection "u an agreem5t ) ! hold] ( ! all[$ secur$ claim or a successor or pr$ecessor 9 int]e/ ( ! hold] ( ! all[$ secur$ claim4 4 #cjh4 ,voidability ( pref]5tial comp5sation transf]s ,section #edg ( title #aa1 ,unit$ ,/ates ,code1 is am5d$ by add+ at ! end ! foll[+3 7j7 7#a7 ,! tru/ee may avoid a transf] to or = ! b5efit ( an insid] ( ! debtor1 a s5ior executive (fic] ( ! debtor1 or any ( ! #bj next mo/ highly comp5sat$ employees ( ! debtor1 dep>tm5t or division manag]s ( ! debtor1 or consultants provid+ s]vices to ! debtor 7reg>dless ( :e!r ! executive (fic]1 employee1 manag]1 or consultant is an insid]71 t-- 7,a7 is made or incurr$ "u a ret5tion1 bonus1 or inc5tive plan devis$ be=e ! date ( ! fil+ ( ! petition2 & 7,b7 does n meet ! requirem5ts "u section #cfc7;b77#c7 or #ejc7;c74 7#b7 ,subsection 7c7 %all n con/itute a def5se aga9/ ! recov]y ( a transf] "u p>agraph 7#a7 ( ?is subsection4 7#c7 7,a7 ,! tru/ee1 or a committee appo9t$ "u section #aajb1 may comm5ce an action to recov] a transf] "u p>agraph 7#a7 ( ?is subsection4 7,b7 ,if nei!r ! tru/ee nor a committee comm5ces an action to recov] a transf] "u subp>agraph 7,a7 be=e ! date ( ! comm5cem5t ( a he>+ on ! confirmation ( a plan1 any p>ty 9 int]e/ may apply to ! c\rt = au?ority to recov] ! transf] = ! b5efit ( ! e/ate1 9 :i* case ! co/s ( recov]y %all be borne by ! e/ate4 4 #cji4 ,protection = employees 9 a sale ( assets 7a7 ,requirem5t relat+ to pres]v+ jobs & ma9ta9+ t]ms & conditions relat+ to employm5t ,section #cfc ( title #aa1 ,unit$ ,/ates ,code1 is am5d$ by add+ at ! end ! foll[+3 7q7 7#a7 ,9 approv+ a sale or lease ( prop]ty ( ! e/ate "u ?is section1 or "u a plan "u *apt] #aa1 ! c\rt %all give sub/antial weight to ! ext5t to :i* a prospective pur*as] or lessee1 respectively1 ( ! prop]ty w-- 7,a7 pres]ve ! jobs ( ! work=ce ( ! debtor2 & 7,b7 ma9ta9 ! t]ms & conditions ( employm5t ( ! work=ce ( ! debtor4 7#b7 ,if !re are #b or m (f]s to pur*ase or lease prop]ty ( ! e/ate "u ?is section1 or "u a plan "u *apt] #aa1 t qualify "u ! proc$ures = ! sale or lease1 respectively1 approv$ by ! c\rt1 ! c\rt %all approve ! (f] t be/-- 7,a7 pres]ves ! jobs ( ! work=ce ( ! debtor2 & 7,b7 ma9ta9s ! t]ms & conditions ( employm5t ( ! work=ce ( ! debtor4 7r7 7#a7 ,any p>ty seek+ to pur*ase or lease prop]ty ( ! e/ate "u ?is section1 or "u a plan "u *apt] #aa1 %all repres5t to ! c\rt ! effect ( su* a transaction ) respect to-- 7,a7 ! pres]vation ( ! jobs ( ! work=ce ( ! debtor2 & 7,b7 ! ma9t5ance ( ! t]ms & conditions ( employm5t ( ! work=ce ( ! debtor4 7#b7 ,! c\rt %all expressly include 9 an ord] approv+ a pur*ase or lease ( prop]ty ( ! e/ate "u ?is section1 or "u a plan "u *apt] #aa1 any repres5tation made by a pur*as] or lessee ( ! prop]ty "u p>agraph 7#a74 7#c7 ,) respect to a pur*ase or lease ( prop]ty ( ! e/ate "u ?is section1 or "u a plan "u *apt] #aa-- 7,a7 ! c\rt %all h jurisdiction ov] ! pur*as] or lessee ( ! prop]ty 9 ord] to en=ce ! t]ms ( ! ord] approv+ ! pur*ase or lease2 7,b7 ! pur*as] or lessee %all promptly disclose to ! c\rt any mat]ial noncompliance ) ! t]ms ( ! ord] describ$ 9 subp>agraph 7,a7 & expla9 ! basis = su* noncompliance2 & 7,c7 ) respect to mat]ial noncompliance describ$ 9 subp>agraph 7,b71 ! c\rt may impose any appropriate rem$y1 includ+ injunctive relief1 to address ! noncompliance4 4 7b7 ,plans "u *apt] #aa 7#a7 ,cont5ts ( plan ,section #aabc7;b77#d7 ( title #aa1 ,unit$ ,/ates ,code1 is am5d$ by ins]t+ 1 :i* sale %all be subject to ! requirem5ts "u subsections 7q7 & 7r7 ( section #cfc ( ?is title1 aft] prop]ty ( ! e/ate4 7#b7 ,confirmation ( plan ,section #aabi7;a7 ( title #aa1 ,unit$ ,/ates ,code1 is am5d$ by add+ at ! end ! foll[+3 7#ag7 ,if ! plan provides = ! sale ( all or sub/antially all ( ! prop]ty ( ! e/ate1 ! sale meets ! requirem5ts "u subsections 7q7 & 7r7 ( section #cfc ( ?is title4 4 #caj4 ,protection ( gift c>d pur*as]s 7a7 ,def9ition ( gift c>d ,section #aja7;a7 ( title #aa1 ,unit$ ,/ates ,code1 is am5d$ by ins]t+ aft] p>agraph 7#bf7 ! foll[+3 7#bf;,a7 ,! t]m gift c>d means a pap] or electronic promise1 pla/ic c>d1 or o!r paym5t code or device t is-- 7,a7 r$eemable at-- 7i7 a s+le m]*ant2 or 7ii7 an affiliat$ gr\p ( m]*ants t %>e ! same "n1 m>k1 or logo2 7,b7 issu$ 9 a specifi$ am\nt1 reg>dless ( :e!r t am\nt may be increas$ 9 value or reload$ at ! reque/ ( ! hold]2 7,c7 pur*as$ on a prepaid basis 9 ex*ange = paym5t2 & 7,d7 honor$ by ! s+le m]*ant or affiliat$ gr\p ( m]*ants describ$ 9 subp>agraph 7,a7 ^u pres5tation = goods or s]vices4 4 7b7 ,consum] deposit ,section #ejg7;a7 ( title #aa1 ,unit$ ,/ates ,code1 is am5d$ by /rik+ p>agraph 7#g7 & ins]t+ ! foll[+3 7#g7 ,sev5?1 all[$ unsecur$ claims ( individuals1 to ! ext5t ( #a1hjj = ea* su* individual1 aris+ f ! deposit1 be=e ! comm5cem5t ( ! case1 ( money 9 connection )-- 7,a7 ! pur*ase1 lease1 or r5tal ( prop]ty2 7,b7 ! pur*ase ( s]vices1 = ! p]sonal1 family1 or h\sehold use ( su* individuals1 t 7 n deliv]$ or provid$2 or 7,c7 ! pur*ase ( a gift c>d ) respect to :i* funds exi/ t h n be5 r$eem$4 4 #caa4 ,comm]cial real e/ate ,section #cfe7;d7 ( title #aa1 ,unit$ ,/ates ,code1 is am5d$-- 7#a7 by /rik+ p>agraph 7#d72 & 7#b7 by r$esignat+ p>agraph 7#e7 z p>agraph 7#d74 ,,iv ,clos+ ! c>ri$ int]e/ loophole #dja4 ,am5dm5t ( #aihf ,code ,except z o!rwise expressly provid$1 :5ev] 9 ?is title an am5dm5t or repeal is express$ 9 t]ms ( an am5dm5t to1 or repeal (1 a section or o!r provision1 ! ref]5ce %all be consid]$ to be made to a section or o!r provision ( ! ,int]nal ,rev5ue ,code ( #aihf4 #djb4 ,p>tn]%ip int]e/s transf]r$ 9 connection ) p]=mance ( s]vices 7a7 ,modification to election ,to include p>tn]%ip int]e/ 9 gross income 9 ye> ( transf] ,subsection 7c7 ( section #hc is am5d$ by r$esignat+ p>agraph 7#d7 z p>agraph 7#e7 & by ins]t+ aft] p>agraph 7#c7 ! foll[+ new p>agraph3 7#d7 ,p>tn]%ip int]e/s ,except z provid$ by ! ,secret>y-- 7,a7 ,9 g5]al ,9 ! case ( any transf] ( an int]e/ 9 a p>tn]%ip 9 connection ) ! provision ( s]vices to 7or = ! b5efit (7 su* p>tn]%ip-- 7i7 ! fair m>ket value ( su* int]e/ %all be treat$ = purposes ( ?is section z be+ equal to ! am\nt ( ! di/ribution :i* ! p>tn] w\ld receive if ! p>tn]%ip sold 7at ! "t ( ! transf]7 all ( its assets at fair m>ket value & di/ribut$ ! proce$s ( su* sale 7r$uc$ by ! liabilities ( ! p>tn]%ip7 to its p>tn]s 9 liquidation ( ! p>tn]%ip1 & 7ii7 ! p]son receiv+ su* int]e/ %all be treat$ z hav+ made ! election "u subsection 7b77#a7 unless su* p]son makes an election "u ?is p>agraph to h su* subsection n apply4 7,b7 ,election ,! election "u subp>agraph 7,a77ii7 %all be made "u rules simil> to ! rules ( subsection 7b77#b74 4 7b7 ,effective date ,! am5dm5ts made by ?is section %all apply to int]e/s 9 p>tn]%ips transf]r$ aft] ! date ( enactm5t ( ?is ,act4 #djc4 ,special rules = p>tn]s provid+ inve/m5t managem5t s]vices to p>tn]%ips 7a7 ,9 g5]al ,"p ,i ( sub*apt] ,k ( *apt] #a is am5d$ by add+ at ! end ! foll[+ new section3 #gaj4 ,special rules = p>tn]s provid+ inve/m5t managem5t s]vices to p>tn]%ips 7a7 ,treatm5t ( di/ributive %>e ( p>tn]%ip items ,= purposes ( ?is title1 9 ! case ( an inve/m5t s]vices p>tn]%ip int]e/-- 7#a7 ,9 g5]al ,not)/&+ section #gjb7;b7-- 7,a7 an am\nt equal to ! net capital ga9 ) respect to su* int]e/ = any p>tn]%ip taxable ye> %all be treat$ z ord9>y income1 & 7,b7 subject to ! limitation ( p>agraph 7#b71 an am\nt equal to ! net capital loss ) respect to su* int]e/ = any p>tn]%ip taxable ye> %all be treat$ z an ord9>y loss4 7#b7 ,re*>act]ization ( losses limit$ to re*>act]iz$ ga9s ,! am\nt treat$ z ord9>y loss "u p>agraph 7#a77;,b7 = any taxable ye> %all n exce$ ! excess 7if any7 (-- 7,a7 ! aggregate am\nt treat$ z ord9>y income "u p>agraph 7#a77;,a7 ) respect to ! inve/m5t s]vices p>tn]%ip int]e/ = all prec$+ p>tn]%ip taxable ye>s to :i* ?is section applies1 ov] 7,b7 ! aggregate am\nt treat$ z ord9>y loss "u p>agraph 7#a77;,b7 ) respect to su* int]e/ = all prec$+ p>tn]%ip taxable ye>s to :i* ?is section applies4 7#c7 ,allocation to items ( ga9 & loss 7,a7 ,net capital ga9 ,! am\nt treat$ z ord9>y income "u p>agraph 7#a77;,a7 %all be allocat$ ratably among ! items ( long-t]m capital ga9 tak5 into acc\nt 9 det]m9+ su* net capital ga94 7,b7 ,net capital loss ,! am\nt treat$ z ord9>y loss "u p>agraph 7#a77;,b7 %all be allocat$ ratably among ! items ( long-t]m capital loss & %ort-t]m capital loss tak5 into acc\nt 9 det]m9+ su* net capital loss4 7#d7 ,t]ms relat+ to capital ga9s & losses ,= purposes ( ?is section-- 7,a7 ,9 g5]al ,net capital ga91 long-t]m capital ga91 & long-t]m capital loss1 ) respect to any inve/m5t s]vices p>tn]%ip int]e/ = any taxable ye>1 %all be det]m9$ "u section #abbb1 except t su* section %all be appli$-- 7i7 )\t reg>d to ! re*>act]ization ( any item z ord9>y income or ord9>y loss "u ?is section1 7ii7 by only tak+ into acc\nt items ( ga9 & loss tak5 into acc\nt by ! hold] ( su* int]e/ "u section #gjb 7o!r ?an subsection 7a77#i7 !re(7 ) respect to su* int]e/ = su* taxable ye>1 & 7iii7 by treat+ prop]ty :i* is tak5 into acc\nt 9 det]m9+ ga9s & losses to :i* section #abca applies z capital assets held = m ?an #a ye>4 7,b7 ,net capital loss ,! t]m net capital loss means ! excess ( ! losses f sales or ex*anges ( capital assets ov] ! ga9s f su* sales or ex*anges4 ,rules simil> to ! rules ( clauses 7i7 ?r\gh 7iii7 ( subp>agraph 7,a7 %all apply = purposes ( ! prec$+ s5t5ce4 7#e7 ,special rule = divid5ds ,any divid5d allocat$ ) respect to any inve/m5t s]vices p>tn]%ip int]e/ %all n be treat$ z qualifi$ divid5d income = purposes ( section #a7;h74 7#f7 ,special rule = qualifi$ small bus9ess /ock ,section #abjb %all n apply to any ga9 f ! sale or ex*ange ( qualifi$ small bus9ess /ock 7z def9$ 9 section #abjb7;c77 allocat$ ) respect to any inve/m5t s]vices p>tn]%ip int]e/4 7b7 ,dispositions ( p>tn]%ip int]e/s 7#a7 ,ga9 7,a7 ,9 g5]al ,any ga9 on ! disposition ( an inve/m5t s]vices p>tn]%ip int]e/ %all be-- 7i7 treat$ z ord9>y income1 & 7ii7 recogniz$ not)/&+ any o!r provision ( ?is subtitle4 7,b7 ,gift & transf]s at dea? ,9 ! case ( a disposition ( an inve/m5t s]vices p>tn]%ip int]e/ by gift or by reason ( dea? ( ! taxpay]-- 7i7 subp>agraph 7,a7 %all n apply1 7ii7 su* int]e/ %all be treat$ z an inve/m5t s]vices p>tn]%ip int]e/ 9 ! h&s ( ! p]son acquir+ su* int]e/1 & 7iii7 any am\nt t w\ld h be5 treat$ z ord9>y income "u ?is subsection _h ! dec$5t sold su* int]e/ imm$iately be=e dea? %all be treat$ z an item ( income 9 respect ( a dec$5t "u section #fia4 7#b7 ,loss ,any loss on ! disposition ( an inve/m5t s]vices p>tn]%ip int]e/ %all be treat$ z an ord9>y loss to ! ext5t ( ! excess 7if any7 (-- 7,a7 ! aggregate am\nt treat$ z ord9>y income "u subsection 7a7 ) respect to su* int]e/ = all p>tn]%ip taxable ye>s to :i* ?is section applies1 ov] 7,b7 ! aggregate am\nt treat$ z ord9>y loss "u subsection 7a7 ) respect to su* int]e/ = all p>tn]%ip taxable ye>s to :i* ?is section applies4 7#c7 ,election ) respect to c]ta9 ex*anges ,p>agraph 7#a77;,a77ii7 %all n apply to ! contribution ( an inve/m5t s]vices p>tn]%ip int]e/ to a p>tn]%ip 9 ex*ange = an int]e/ 9 su* p>tn]%ip if-- 7,a7 ! taxpay] makes an irrevocable election to treat ! p>tn]%ip int]e/ receiv$ 9 ! ex*ange z an inve/m5t s]vices p>tn]%ip int]e/1 & 7,b7 ! taxpay] agrees to comply ) su* report+ & recordkeep+ requirem5ts z ! ,secret>y may prescribe4 7#d7 ,di/ributions ( p>tn]%ip prop]ty 7,a7 ,9 g5]al ,9 ! case ( any di/ribution ( prop]ty by a p>tn]%ip ) respect to any inve/m5t s]vices p>tn]%ip int]e/ held by a p>tn]1 ! p>tn] receiv+ su* prop]ty %all recognize ga9 equal to ! excess 7if any7 (-- 7i7 ! fair m>ket value ( su* prop]ty at ! "t ( su* di/ribution1 ov] 7ii7 ! adju/$ basis ( su* prop]ty 9 ! h&s ( su* p>tn] 7det]m9$ )\t reg>d to subp>agraph 7,c774 7,b7 ,treatm5t ( ga9 z ord9>y income ,any ga9 recogniz$ by su* p>tn] "u subp>agraph 7,a7 %all be treat$ z ord9>y income to ! same ext5t & 9 ! same mann] z ! increase 9 su* p>tn]'s di/ributive %>e ( ! taxable income ( ! p>tn]%ip w\ld be treat$ "u subsection 7a7 if1 imm$iately prior to ! di/ribution1 ! p>tn]%ip _h sold ! di/ribut$ prop]ty at fair m>ket value & all ( ! ga9 f su* disposition 7 allocat$ to su* p>tn]4 ,= purposes ( apply+ subsection 7a77#b71 any ga9 treat$ z ord9>y income "u ?is subp>agraph %all be treat$ z an am\nt treat$ z ord9>y income "u subsection 7a77#a77;,a74 7,c7 ,adju/m5t ( basis ,9 ! case a di/ribution to :i* subp>agraph 7,a7 applies1 ! basis ( ! di/ribut$ prop]ty 9 ! h&s ( ! di/ributee p>tn] %all be ! fair m>ket value ( su* prop]ty4 7,d7 ,special rules ) respect to m]g]s & divisions ,9 ! case ( a taxpay] :i* satisfies requirem5ts simil> to ! requirem5ts ( subp>agraphs 7,a7 & 7,b7 ( p>agraph 7#c71 ?is p>agraph & p>agraph 7#a77;,a77ii7 %all n apply to ! di/ribution ( a p>tn]%ip int]e/ if su* di/ribution is 9 connection ) a contribution 7or deem$ contribution7 ( any prop]ty ( ! p>tn]%ip to :i* section #gba applies pursuant to a transaction describ$ 9 section #gjh7;b77#b74 7c7 ,inve/m5t s]vices p>tn]%ip int]e/ ,= purposes ( ?is section-- 7#a7 ,9 g5]al ,! t]m inve/m5t s]vices p>tn]%ip int]e/ means any int]e/ 9 an inve/m5t p>tn]%ip acquir$ or held by any p]son 9 connection ) ! conduct ( a trade or bus9ess describ$ 9 p>agraph 7#b7 by su* p]son 7or any p]son relat$ to su* p]son74 ,an int]e/ 9 an inve/m5t p>tn]%ip held by any p]son-- 7,a7 %all n be treat$ z an inve/m5t s]vices p>tn]%ip int]e/ = any p]iod be=e ! fir/ date on :i* x is s held 9 connection ) su* a trade or bus9ess1 7,b7 %all n cease to be an inve/m5t s]vices p>tn]%ip int]e/ m]ely because su* p]son holds su* int]e/ o!r ?an 9 connection ) su* a trade or bus9ess1 & 7,c7 %all be treat$ z an inve/m5t s]vices p>tn]%ip int]e/ if acquir$ f a relat$ p]son 9 ^: h&s su* int]e/ 0 an inve/m5t s]vices p>tn]%ip int]e/4 7#b7 ,bus9esses to :i* ?is section applies ,a trade or bus9ess is describ$ 9 ?is p>agraph if su* trade or bus9ess prim>ily involves ! p]=mance ( any ( ! foll[+ s]vices ) respect to assets held 7directly or indirectly7 by "o or m inve/m5t p>tn]%ips ref]r$ to 9 p>agraph 7#a73 7,a7 ,advis+ z to ! advisability ( inve/+ 91 pur*as+1 or sell+ any specifi$ asset4 7,b7 ,manag+1 acquir+1 or dispos+ ( any specifi$ asset4 7,c7 ,arrang+ f9anc+ ) respect to acquir+ specifi$ assets4 7,d7 ,any activity 9 support ( any s]vice describ$ 9 subp>agraphs 7,a7 ?r\gh 7,c74 7#c7 ,inve/m5t p>tn]%ip 7,a7 ,9 g5]al ,! t]m inve/m5t p>tn]%ip means any p>tn]%ip if1 at ! end ( any two consecutive cal5d> qu>t]s end+ aft] ! date ( enactm5t ( ?is section-- 7i7 sub/antially all ( ! assets ( ! p>tn]%ip are specifi$ assets 7det]m9$ )\t reg>d to any section #aig intangible )9 ! mean+ ( section #aig7;d771 & 7ii7 less ?an #ge p]c5t ( ! capital ( ! p>tn]%ip is attributable to qualifi$ capital int]e/s :i* con/itute prop]ty held 9 connection ) a trade or bus9ess ( ! own] ( su* int]e/4 7,b7 ,look-?r\gh ( c]ta9 :olly own$ entities = purposes ( det]m9+ assets ( ! p>tn]%ip 7i7 ,9 g5]al ,= purposes ( det]m9+ ! assets ( a p>tn]%ip "u subp>agraph 7,a77i7-- 7,i7 any int]e/ 9 a specifi$ entity %all n be treat$ z an asset ( su* p>tn]%ip1 & 7,,ii7 su* p>tn]%ip %all be treat$ z hold+ its proportionate %>e ( ea* ( ! assets ( su* specifi$ entity4 7ii7 ,specifi$ entity ,= purposes ( clause 7i71 ! t]m specifi$ entity means1 ) respect to any p>tn]%ip 7h]eaft] ref]r$ to z ! upp]-ti] p>tn]%ip71 any p]son :i* engages 9 ! same trade or bus9ess z ! upp]-ti] p>tn]%ip & is-- 7,i7 a p>tn]%ip all ( ! capital & pr(its int]e/s ( :i* are held directly or indirectly by ! upp]-ti] p>tn]%ip1 or 7,,ii7 a =eign corporation :i* does n engage 9 a trade or bus9ess 9 ! ,unit$ ,/ates & all ( ! /ock ( :i* is held directly or indirectly by ! upp]-ti] p>tn]%ip4 7,c7 ,special rules = det]m9+ if prop]ty held 9 connection ) trade or bus9ess 7i7 ,9 g5]al ,except z o!rwise provid$ by ! ,secret>y1 solely = purposes ( det]m9+ :e!r any int]e/ 9 a p>tn]%ip con/itutes prop]ty held 9 connection ) a trade or bus9ess "u subp>agraph 7,a77ii7-- 7,i7 a trade or bus9ess ( any p]son closely relat$ to ! own] ( su* int]e/ %all be treat$ z a trade or bus9ess ( su* own]1 7,,ii7 su* int]e/ %all be treat$ z held by a p]son 9 connection ) a trade or bus9ess dur+ any taxable ye> if su* int]e/ 0 s held by su* p]son dur+ any #c taxable ye>s prec$+ su* taxable ye>1 & 7,,iii7 p>agraph 7#e77;,b7 %all n apply4 7ii7 ,closely relat$ p]sons ,= purposes ( clause 7i77,i71 a p]son %all be treat$ z closely relat$ to ano!r p]son if1 tak+ into acc\nt ! rules ( section #bfg7;c71 ! relation%ip betwe5 su* p]sons is describ$ 9-- 7,i7 p>agraph 7#a7 or 7#i7 ( section #bfg7;b71 or 7,,ii7 section #bfg7;b77#d71 b solely 9 ! case ( a tru/ ) respect to :i* ea* curr5t b5efici>y is ! grantor or a p]son ^: relation%ip to ! grantor is describ$ 9 p>agraph 7#a7 or 7#i7 ( section #bfg7;b74 7,d7 ,anti-abuse rules ,! ,secret>y may issue regulations or o!r guidance :i* prev5t ! avoidance ( ! purposes ( subp>agraph 7,a71 includ+ regulations or o!r guidance :i* treat conv]tible & cont+5t debt 7& o!r debt hav+ ! attributes ( equity7 z a capital int]e/ 9 ! p>tn]%ip4 7,e7 ,controll$ gr\ps ( entities 7i7 ,9 g5]al ,9 ! case ( a controll$ gr\p ( entities1 if an int]e/ 9 ! p>tn]%ip receiv$ 9 ex*ange = a contribution to ! capital ( ! p>tn]%ip by any memb] ( su* controll$ gr\p w\ld 79 ! h&s ( su* memb]7 con/itute prop]ty held 9 connection ) a trade or bus9ess1 !n any int]e/ 9 su* p>tn]%ip held by any memb] ( su* gr\p %all be treat$ = purposes ( subp>agraph 7,a7 z con/itut+ 79 ! h&s ( su* memb]7 prop]ty held 9 connection ) a trade or bus9ess4 7ii7 ,controll$ gr\p ( entities ,= purposes ( clause 7i71 ! t]m controll$ gr\p ( entities means a controll$ gr\p ( corporations z def9$ 9 section #aefc7;a77#a71 appli$ )\t reg>d to subsections 7a77#d7 & 7b77#b7 ( section #aefc4 ,a p>tn]%ip or any o!r entity 7o!r ?an a corporation7 %all be treat$ z a memb] ( a controll$ gr\p ( entities if su* entity is controll$ 7)9 ! mean+ ( section #ied7;d77#c77 by memb]s ( su* gr\p 7includ+ any entity treat$ z a memb] ( su* gr\p by reason ( ?is s5t5ce74 7,f7 ,special rule = corporations ,= purposes ( ?is p>agraph1 9 ! case ( a corporation1 ! det]m9ation ( :e!r prop]ty is held 9 connection ) a trade or bus9ess %all be det]m9$ z if ! taxpay] 7 an individual4 7#d7 ,specifi$ asset ,! t]m specifi$ asset means securities 7z def9$ 9 section #dge7;c77#b7 )\t reg>d to ! la/ s5t5ce !re(71 real e/ate held = r5tal or inve/m5t1 int]e/s 9 p>tn]%ips1 commodities 7z def9$ 9 section #dge7;e77#b771 ca% or ca% equival5ts1 or options or d]ivative contracts ) respect to any ( ! =ego+4 7#e7 ,relat$ p]sons 7,a7 ,9 g5]al ,a p]son %all be treat$ z relat$ to ano!r p]son if ! relation%ip betwe5 su* p]sons is describ$ 9 section #bfg7;b7 or #gjg7;b74 7,b7 ,attribution ( p>tn] s]vices ,any s]vice describ$ 9 p>agraph 7#b7 :i* is provid$ by a p>tn] ( a p>tn]%ip %all be treat$ z also provid$ by su* p>tn]%ip4 7d7 ,exception = c]ta9 capital int]e/s 7#a7 ,9 g5]al ,9 ! case ( any portion ( an inve/m5t s]vices p>tn]%ip int]e/ :i* is a qualifi$ capital int]e/1 all items ( ga9 & loss 7& any divid5ds7 :i* are allocat$ to su* qualifi$ capital int]e/ %all n be tak5 into acc\nt "u subsection 7a7 if-- 7,a7 allocations ( items are made by ! p>tn]%ip to su* qualifi$ capital int]e/ 9 ! same mann] z su* allocations are made to o!r qualifi$ capital int]e/s held by p>tn]s :o d n provide any s]vices describ$ 9 subsection 7c77#b7 & :o are n relat$ to ! p>tn] hold+ ! qualifi$ capital int]e/1 & 7,b7 ! allocations made to su* o!r int]e/s are significant comp>$ to ! allocations made to su* qualifi$ capital int]e/4 7#b7 ,au?ority to provide exceptions to allocation requirem5ts ,to ! ext5t provid$ by ! ,secret>y 9 regulations or o!r guidance-- 7,a7 ,allocations to portion ( qualifi$ capital int]e/ ,p>agraph 7#a7 may be appli$ sep>ately ) respect to a portion ( a qualifi$ capital int]e/4 7,b7 ,no or insignificant allocations to nons]vice provid]s ,9 any case 9 :i* ! requirem5ts ( p>agraph 7#a77;,b7 are n satisfi$1 items ( ga9 & loss 7& any divid5ds7 %all n be tak5 into acc\nt "u subsection 7a7 to ! ext5t t su* items are prop]ly allocable "u su* regulations or o!r guidance to qualifi$ capital int]e/s4 7,c7 ,allocations to s]vice provid]s' qualifi$ capital int]e/s :i* are less ?an o!r allocations ,allocations %all n be treat$ z fail+ to meet ! requirem5t ( p>agraph 7#a77;,a7 m]ely because ! allocations to ! qualifi$ capital int]e/ repres5t a l[] return ?an ! allocations made to ! o!r qualifi$ capital int]e/s ref]r$ to 9 su* p>agraph4 7#c7 ,special rule = *anges 9 s]vices & capital contributions ,9 ! case ( an int]e/ 9 a p>tn]%ip :i* 0 n an inve/m5t s]vices p>tn]%ip int]e/ & :i*1 by reason ( a *ange 9 ! s]vices ) respect to assets held 7directly or indirectly7 by ! p>tn]%ip or by reason ( a *ange 9 ! capital contributions to su* p>tn]%ip1 becomes an inve/m5t s]vices p>tn]%ip int]e/1 ! qualifi$ capital int]e/ ( ! hold] ( su* p>tn]%ip int]e/ imm$iately aft] su* *ange %all n1 = purposes ( ?is subsection1 be less ?an ! fair m>ket value ( su* int]e/ 7det]m9$ imm$iately be=e su* *ange74 7#d7 ,special rule = ti]$ p>tn]%ips ,except z o!rwise provid$ by ! ,secret>y1 9 ! case ( ti]$ p>tn]%ips1 all items :i* are allocat$ 9 a mann] :i* meets ! requirem5ts ( p>agraph 7#a7 to qualifi$ capital int]e/s 9 a l[]-ti] p>tn]%ip %all reta9 su* "* to ! ext5t allocat$ on ! basis ( qualifi$ capital int]e/s 9 any upp]-ti] p>tn]%ip4 7#e7 ,exception = no-self-*>g$ c>ry & managem5t fee provisions ,except z o!rwise provid$ by ! ,secret>y1 an int]e/ %all n fail to be treat$ z satisfy+ ! requirem5t ( p>agraph 7#a77;,a7 m]ely because ! allocations made by ! p>tn]%ip to su* int]e/ d n reflect ! co/ ( s]vices describ$ 9 subsection 7c77#b7 :i* are provid$ 7directly or indirectly7 to ! p>tn]%ip by ! hold] ( su* int]e/ 7or a relat$ p]son74 7#f7 ,special rule = dispositions ,9 ! case ( any inve/m5t s]vices p>tn]%ip int]e/ any portion ( :i* is a qualifi$ capital int]e/1 subsection 7b7 %all n apply to s mu* ( any ga9 or loss z be>s ! same proportion to ! entire am\nt ( su* ga9 or loss z-- 7,a7 ! di/ributive %>e ( ga9 or loss t w\ld h be5 allocat$ to ! qualifi$ capital int]e/ 7consi/5t ) ! requirem5ts ( p>agraph 7#a77 if ! p>tn]%ip _h sold all ( its assets at fair m>ket value imm$iately be=e ! disposition1 be>s to 7,b7 ! di/ributive %>e ( ga9 or loss t w\ld h be5 s allocat$ to ! inve/m5t s]vices p>tn]%ip int]e/ ( :i* su* qualifi$ capital int]e/ is a "p4 7#g7 ,qualifi$ capital int]e/ ,= purposes ( ?is section-- 7,a7 ,9 g5]al ,! t]m qualifi$ capital int]e/ means s mu* ( a p>tn]'s int]e/ 9 ! capital ( ! p>tn]%ip z is attributable to-- 7i7 ! fair m>ket value ( any money or o!r prop]ty contribut$ to ! p>tn]%ip 9 ex*ange = su* int]e/ 7det]m9$ )\t reg>d to section #geb7;a771 7ii7 any am\nts :i* h be5 includ$ 9 gross income "u section #hc ) respect to ! transf] ( su* int]e/1 & 7iii7 ! excess 7if any7 (-- 7,i7 any items ( income & ga9 tak5 into acc\nt "u section #gjb ) respect to su* int]e/1 ov] 7,,ii7 any items ( d$uction & loss s tak5 into acc\nt4 7,b7 ,adju/m5t to qualifi$ capital int]e/ 7i7 ,di/ributions & losses ,! qualifi$ capital int]e/ %all be r$uc$ by di/ributions f ! p>tn]%ip ) respect to su* int]e/ & by ! excess 7if any7 ( ! am\nt describ$ 9 subp>agraph 7,a77iii77,,ii7 ov] ! am\nt describ$ 9 subp>agraph 7,a77iii77,i74 7ii7 ,special rule = contributions ( prop]ty ,9 ! case ( any contribution ( prop]ty describ$ 9 subp>agraph 7,a77i7 ) respect to :i* ! fair m>ket value ( su* prop]ty is n equal to ! adju/$ basis ( su* prop]ty imm$iately be=e su* contribution1 prop] adju/m5ts %all be made to ! qualifi$ capital int]e/ to take into acc\nt su* diff]5ce consi/5t ) su* regulations or o!r guidance z ! ,secret>y may provide4 7,c7 ,te*nical t]m9ations1 etc41 disreg>d$ ,no increase or decrease 9 ! qualifi$ capital int]e/ ( any p>tn] %all result f a t]m9ation1 m]g]1 consolidation1 or division describ$ 9 section #gjh1 or any simil> transaction4 7#h7 ,treatm5t ( c]ta9 loans 7,a7 ,proce$s ( p>tn]%ip loans n treat$ z qualifi$ capital int]e/ ( s]vice provid+ p>tn]s ,= purposes ( ?is subsection1 an inve/m5t s]vices p>tn]%ip int]e/ %all n be treat$ z a qualifi$ capital int]e/ to ! ext5t t su* int]e/ is acquir$ 9 connection ) ! proce$s ( any loan or o!r advance made or gu>ante$1 directly or indirectly1 by any o!r p>tn] or ! p>tn]%ip 7or any p]son relat$ to any su* o!r p>tn] or ! p>tn]%ip74 ,! prec$+ s5t5ce %all n apply to ! ext5t ! loan or o!r advance is repaid be=e ! date ( enactm5t ( ?is section unless su* repaym5t is made ) ! proce$s ( a loan or o!r advance describ$ 9 ! prec$+ s5t5ce4 7,b7 ,r$uction 9 allocations to qualifi$ capital int]e/s = loans f nons]vice-provid+ p>tn]s to ! p>tn]%ip ,= purposes ( ?is subsection1 any loan or o!r advance to ! p>tn]%ip made or gu>ante$1 directly or indirectly1 by a p>tn] n provid+ s]vices describ$ 9 subsection 7c77#b7 to ! p>tn]%ip 7or any p]son relat$ to su* p>tn]7 %all be tak5 into acc\nt 9 det]m9+ ! qualifi$ capital int]e/s ( ! p>tn]s 9 ! p>tn]%ip4 7#i7 ,special rule = qualifi$ family p>tn]%ips 7,a7 ,9 g5]al ,9 ! case ( any specifi$ family p>tn]%ip int]e/1 p>agraph 7#a77;,a7 %all be appli$ )\t reg>d to ! phrase & :o are n relat$ to ! p>tn] hold+ ! qualifi$ capital int]e/4 7,b7 ,specifi$ family p>tn]%ip int]e/ ,= purposes ( ?is p>agraph1 ! t]m specifi$ family p>tn]%ip int]e/ means any inve/m5t s]vices p>tn]%ip int]e/ if-- 7i7 su* int]e/ is an int]e/ 9 a qualifi$ family p>tn]%ip1 7ii7 su* int]e/ is held by a natural p]son or by a tru/ ) respect to :i* ea* b5efici>y is a grantor or a p]son ^: relation%ip to ! grantor is describ$ 9 section #bfg7;b77#a71 & 7iii7 all o!r int]e/s 9 su* qualifi$ family p>tn]%ip ) respect to :i* significant allocations are made 7)9 ! mean+ ( p>agraph 7#a77;,b7 & 9 comp>ison to ! allocations made to ! int]e/ describ$ 9 clause 7ii77 are held by p]sons :o-- 7,i7 are relat$ to ! natural p]son or tru/ ref]r$ to 9 clause 7ii71 or 7,,ii7 provide s]vices describ$ 9 subsection 7c77#b74 7,c7 ,qualifi$ family p>tn]%ip ,= purposes ( ?is p>agraph1 ! t]m qualifi$ family p>tn]%ip means any p>tn]%ip if-- 7i7 all ( ! capital & pr(its int]e/s ( su* p>tn]%ip are held by-- 7,i7 specifi$ family memb]s1 7,,ii7 any p]son closely relat$ 7)9 ! mean+ ( subsection 7c77#c77;,c77ii77 to a specifi$ family memb]1 or 7,,iii7 any o!r p]son 7n describ$ 9 subclause 7,i7 or 7,,ii77 if su* int]e/ is an inve/m5t s]vices p>tn]%ip int]e/ ) respect to su* p]son1 & 7ii7 su* p>tn]%ip does n hold itself out to ! public z an inve/m5t advisor4 7,d7 ,specifi$ family memb]s ,= purposes ( subp>agraph 7,c71 individuals %all be treat$ z specifi$ family memb]s if su* individuals w\ld be treat$ z "o p]son "u ! rules ( section #acfa7;c77#a7 if ! applicable date 7)9 ! mean+ ( subp>agraph 7,b77iii7 !re(7 7 ! late/ (-- 7i7 ! date ( ! e/abli%m5t ( ! p>tn]%ip1 7ii7 ! e>lie/ date t ! common ance/or holds a capital or pr(its int]e/ 9 ! p>tn]%ip1 or 7iii7 ! date ( enactm5t ( ?is section4 7e7 ,o!r income & ga9 9 connection ) inve/m5t managem5t s]vices 7#a7 ,9 g5]al ,if-- 7,a7 a p]son p]=ms 7directly or indirectly7 inve/m5t managem5t s]vices = any inve/m5t entity1 7,b7 su* p]son holds 7directly or indirectly7 a disqualifi$ int]e/ ) respect to su* entity1 & 7,c7 ! value ( su* int]e/ 7or paym5ts !reund]7 is sub/antially relat$ to ! am\nt ( income or ga9 7:e!r or n realiz$7 f ! assets ) respect to :i* ! inve/m5t managem5t s]vices are p]=m$1 any income or ga9 ) respect to su* int]e/ %all be treat$ z ord9>y income4 ,rules simil> to ! rules ( subsections 7a77#e7 & 7d7 %all apply = purposes ( ?is subsection4 7#b7 ,def9itions ,= purposes ( ?is subsection-- 7,a7 ,disqualifi$ int]e/ 7i7 ,9 g5]al ,! t]m disqualifi$ int]e/ means1 ) respect to any inve/m5t entity-- 7,i7 any int]e/ 9 su* entity o!r ?an indebt$ness1 7,,ii7 conv]tible or cont+5t debt ( su* entity1 7,,iii7 any option or o!r "r to acquire prop]ty describ$ 9 subclause 7,i7 or 7,,ii71 & 7,,iv7 any d]ivative in/rum5t ent]$ into 7directly or indirectly7 ) su* entity or any inve/or 9 su* entity4 7ii7 ,exceptions ,su* t]m %all n include-- 7,i7 a p>tn]%ip int]e/1 7,,ii7 except z provid$ by ! ,secret>y1 any int]e/ 9 a taxable corporation1 & 7,,iii7 except z provid$ by ! ,secret>y1 /ock 9 an ,s corporation4 7,b7 ,taxable corporation ,! t]m taxable corporation means-- 7i7 a dome/ic ,c corporation1 or 7ii7 a =eign corporation sub/antially all ( ! income ( :i* is-- 7,i7 effectively connect$ ) ! conduct ( a trade or bus9ess 9 ! ,unit$ ,/ates1 or 7,,ii7 subject to a compreh5sive =eign income tax 7z def9$ 9 section #deg;,a7d77#b774 7,c7 ,inve/m5t managem5t s]vices ,! t]m inve/m5t managem5t s]vices means a sub/antial quantity ( any ( ! s]vices describ$ 9 subsection 7c77#b74 7,d7 ,inve/m5t entity ,! t]m inve/m5t entity means any entity :i*1 if x 7 a p>tn]%ip1 w\ld be an inve/m5t p>tn]%ip4 7f7 ,exception = dome/ic ,c corporations ,except z o!rwise provid$ by ! ,secret>y1 9 ! case ( a dome/ic ,c corporation-- 7#a7 subsections 7a7 & 7b7 %all n apply to any item allocat$ to su* corporation ) respect to any inve/m5t s]vices p>tn]%ip int]e/ 7or to any ga9 or loss ) respect to ! disposition ( su* an int]e/71 & 7#b7 subsection 7e7 %all n apply4 7g7 ,regulations ,! ,secret>y %all prescribe su* regulations or o!r guidance z is necess>y or appropriate to c>ry out ! purposes ( ?is section1 includ+ regulations or o!r guidance to-- 7#a7 require su* report+ & recordkeep+ by any p]son 9 su* mann] & at su* "t z ! ,secret>y may prescribe = purposes ( enabl+ ! p>tn]%ip to meet ! requirem5ts ( section #fjca ) respect to any item describ$ 9 section #gjb7;a77#i71 7#b7 provide modifications to ! application ( ?is section 7includ+ treat+ relat$ p]sons z n relat$ to "o ano!r7 to ! ext5t su* modification is consi/5t ) ! purposes ( ?is section1 7#c7 prev5t ! avoidance ( ! purposes ( ?is section 7includ+ ?r\gh ! use ( qualifi$ family p>tn]%ips71 & 7#d7 coord9ate ?is section ) ! o!r provisions ( ?is title4 7h7 ,cross ref]5ce ,= #dj p]c5t p5alty on c]ta9 und]paym5ts due to ! avoidance ( ?is section1 see section #fffb4 4 7b7 ,application ( section #gea to indirect dispositions ( inve/m5t s]vices p>tn]%ip int]e/s 7#a7 ,9 g5]al ,subsection 7a7 ( section #gea is am5d$ by /rik+ or at ! end ( p>agraph 7#a71 by ins]t+ or at ! end ( p>agraph 7#b71 & by ins]t+ aft] p>agraph 7#b7 ! foll[+ new p>agraph3 7#c7 inve/m5t s]vices p>tn]%ip int]e/s held by ! p>tn]%ip1 4 7#b7 ,c]ta9 di/ributions treat$ z sales or ex*anges ,subp>agraph 7,a7 ( section #gea7;b77#a7 is am5d$ by /rik+ or at ! end ( clause 7i71 by ins]t+ or at ! end ( clause 7ii71 & by ins]t+ aft] clause 7ii7 ! foll[+ new clause3 7iii7 inve/m5t s]vices p>tn]%ip int]e/s held by ! p>tn]%ip1 4 7#c7 ,application ( special rules 9 ! case ( ti]$ p>tn]%ips ,subsection 7f7 ( section #gea is am5d$-- 7,a7 by /rik+ or at ! end ( p>agraph 7#a71 by ins]t+ or at ! end ( p>agraph 7#b71 & by ins]t+ aft] p>agraph 7#b7 ! foll[+ new p>agraph3 7#c7 an inve/m5t s]vices p>tn]%ip int]e/ held by ! p>tn]%ip1 1 & 7,b7 by /rik+ p>tn]4 & ins]t+ p>tn] 7o!r ?an a p>tn]%ip 9 :i* x holds an inve/m5t s]vices p>tn]%ip int]e/744 7#d7 ,inve/m5t s]vices p>tn]%ip int]e/s2 qualifi$ capital int]e/s ,section #gea is am5d$ by add+ at ! end ! foll[+ new subsection3 7g7 ,inve/m5t s]vices p>tn]%ip int]e/s ,= purposes ( ?is section-- 7#a7 ,9 g5]al ,! t]m inve/m5t s]vices p>tn]%ip int]e/ has ! mean+ giv5 su* t]m by section #gaj7;c74 7#b7 ,adju/m5ts = qualifi$ capital int]e/s ,! am\nt to :i* subsection 7a7 applies by reason ( p>agraph 7#c7 !re( %all n include s mu* ( su* am\nt z is attributable to any portion ( ! inve/m5t s]vices p>tn]%ip int]e/ :i* is a qualifi$ capital int]e/ 7det]m9$ "u rules simil> to ! rules ( section #gaj7;d774 7#c7 ,exception = publicly trad$ p>tn]%ips ,except z o!rwise provid$ by ! ,secret>y1 9 ! case ( an ex*ange ( an int]e/ 9 a publicly trad$ p>tn]%ip 7z def9$ 9 section #ggjd7 to :i* subsection 7a7 applies-- 7,a7 ?is section %all be appli$ )\t reg>d to subsections 7a77#c71 7b77#a77;,a77iii71 & 7f77#c71 & 7,b7 su* p>tn]%ip %all be treat$ z own+ its proportionate %>e ( ! prop]ty ( any o!r p>tn]%ip 9 :i* x is a p>tn]4 7#d7 ,recognition ( ga9s ,any ga9 ) respect to :i* subsection 7a7 applies by reason ( p>agraph 7#c7 !re( %all be recogniz$ not)/&+ any o!r provision ( ?is title4 7#e7 ,coord9ation ) inv5tory items ,an inve/m5t s]vices p>tn]%ip int]e/ held by ! p>tn]%ip %all n be treat$ z an inv5tory item ( ! p>tn]%ip4 7#f7 ,prev5tion ( d\ble c\nt+ ,"u regulations or o!r guidance prescrib$ by ! ,secret>y1 subsection 7a77#c7 %all n apply ) respect to any am\nt to :i* section #gaj applies4 7#g7 ,valuation me?ods ,! ,secret>y %all prescribe regulations or o!r guidance :i* provide ! acceptable me?ods = valu+ inve/m5t s]vices p>tn]%ip int]e/s = purposes ( ?is section4 4 7c7 ,treatm5t = purposes ( section #ggjd ,subsection 7d7 ( section #ggjd is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#f7 ,income f c]ta9 c>ri$ int]e/s n qualifi$ 7,a7 ,9 g5]al ,specifi$ c>ri$ int]e/ income %all n be treat$ z qualify+ income4 7,b7 ,specifi$ c>ri$ int]e/ income ,= purposes ( ?is p>agraph-- 7i7 ,9 g5]al ,! t]m specifi$ c>ri$ int]e/ income means-- 7,i7 any item ( income or ga9 allocat$ to an inve/m5t s]vices p>tn]%ip int]e/ 7z def9$ 9 section #gaj7;c77 held by ! p>tn]%ip1 7,,ii7 any ga9 on ! disposition ( an inve/m5t s]vices p>tn]%ip int]e/ 7z s def9$7 or a p>tn]%ip int]e/ to :i* 79 ! h&s ( ! p>tn]%ip7 section #gea applies1 & 7,,iii7 any income or ga9 tak5 into acc\nt by ! p>tn]%ip "u subsection 7b77#d7 or 7e7 ( section #gaj4 7ii7 ,exception = qualifi$ capital int]e/s ,a rule simil> to ! rule ( section #gaj7;d7 %all apply = purposes ( clause 7i74 7,c7 ,coord9ation ) o!r provisions ,subp>agraph 7,a7 %all n apply to any item describ$ 9 p>agraph 7#a77;,e7 7or s mu* ( p>agraph 7#a77;,f7 z relates to p>agraph 7#a77;,e774 7,d7 ,special rules = c]ta9 p>tn]%ips 7i7 ,c]ta9 p>tn]%ips own$ by real e/ate inve/m5t tru/s ,subp>agraph 7,a7 %all n apply 9 ! case ( a p>tn]%ip :i* meets ea* ( ! foll[+ requirem5ts3 7,i7 ,su* p>tn]%ip is treat$ z publicly trad$ "u ?is section solely by reason ( int]e/s 9 su* p>tn]%ip be+ conv]tible into int]e/s 9 a real e/ate inve/m5t tru/ :i* is publicly trad$4 7,,ii7 ,fifty p]c5t or m ( ! capital & pr(its int]e/s ( su* p>tn]%ip are own$1 directly or indirectly1 at all times dur+ ! taxable ye> by su* real e/ate inve/m5t tru/ 7det]m9$ ) ! application ( section #bfg7;c774 7,,iii7 ,su* p>tn]%ip meets ! requirem5ts ( p>agraphs 7#b71 7#c71 & 7#d7 ( section #hef7;c74 7ii7 ,c]ta9 p>tn]%ips own+ o!r publicly trad$ p>tn]%ips ,subp>agraph 7,a7 %all n apply 9 ! case ( a p>tn]%ip :i* meets ea* ( ! foll[+ requirem5ts3 7,i7 ,sub/antially all ( ! assets ( su* p>tn]%ip consi/ ( int]e/s 9 "o or m publicly trad$ p>tn]%ips 7det]m9$ )\t reg>d to subsection 7b77#b774 7,,ii7 ,sub/antially all ( ! income ( su* p>tn]%ip is ord9>y income or section #abca ga9 7z def9$ 9 section #abca7;a77#c774 7,e7 ,transitional rule ,subp>agraph 7,a7 %all n apply to any taxable ye> ( ! p>tn]%ip beg9n+ be=e ! date :i* is #aj ye>s aft] ! date ( enactm5t ( ?is p>agraph4 4 7d7 ,imposition ( p5alty on und]paym5ts 7#a7 ,9 g5]al ,subsection 7b7 ( section #fffb is am5d$ by ins]t+ aft] p>agraph 7#h7 ! foll[+ new p>agraph3 7#i7 ,! application ( section #gaj7;e7 or ! regulations or o!r guidance prescrib$ "u section #gaj7;g7 to prev5t ! avoidance ( ! purposes ( section #gaj4 4 7#b7 ,am\nt ( p5alty 7,a7 ,9 g5]al ,section #fffb is am5d$ by add+ at ! end ! foll[+ new subsection3 7l7 ,increase 9 p5alty 9 case ( prop]ty transf]r$ = inve/m5t managem5t s]vices ,9 ! case ( any portion ( an und]paym5t to :i* ?is section applies by reason ( subsection 7b77#i71 subsection 7a7 %all be appli$ ) respect to su* portion by sub/itut+ #dj p]c5t = #bj p]c5t4 4 7,b7 ,con=m+ am5dm5t ,subp>agraph 7,b7 ( section #fffb;,a7e77#b7 is am5d$ by /rik+ or 7i7 & ins]t+ 1 7i71 or 7l74 7#c7 ,special rules = application ( reasonable cause exception ,subsection 7c7 ( section #fffd is am5d$-- 7,a7 by r$esignat+ p>agraphs 7#c7 & 7#d7 z p>agraphs 7#d7 & 7#e71 respectively2 7,b7 by /rik+ p>agraph 7#c7 9 p>agraph 7#e77;,a71 z s r$esignat$1 & ins]t+ p>agraph 7#d72 & 7,c7 by ins]t+ aft] p>agraph 7#b7 ! foll[+ new p>agraph3 7#c7 ,special rule = und]paym5ts attributable to inve/m5t managem5t s]vices 7,a7 ,9 g5]al ,p>agraph 7#a7 %all n apply to any portion ( an und]paym5t to :i* section #fffb applies by reason ( subsection 7b77#i7 unless-- 7i7 ! relevant facts affect+ ! tax treatm5t ( ! item are adequately disclos$1 7ii7 !re is or 0 sub/antial au?ority = su* treatm5t1 & 7iii7 ! taxpay] reasonably believ$ t su* treatm5t 0 m likely ?an n ! prop] treatm5t4 7,b7 ,rules relat+ to reasonable belief ,rules simil> to ! rules ( subsection 7d77#d7 %all apply = purposes ( subp>agraph 7,a77iii74 4 7e7 ,income & loss f inve/m5t s]vices p>tn]%ip int]e/s tak5 into acc\nt 9 det]m9+ net e>n+s f self-,employm5t 7#a7 ,int]nal ,rev5ue ,code 7,a7 ,9 g5]al ,section #adjb7;a7 is am5d$ by /rik+ & at ! end ( p>agraph 7#af71 by /rik+ ! p]iod at ! end ( p>agraph 7#ag7 & ins]t+ 2 &1 & by ins]t+ aft] p>agraph 7#ag7 ! foll[+ new p>agraph3 7#ah7 not)/&+ ! prec$+ provisions ( ?is subsection1 9 ! case ( any individual engag$ 9 ! trade or bus9ess ( provid+ s]vices describ$ 9 section #gaj7;c77#b7 ) respect to any entity1 inve/m5t s]vices p>tn]%ip income or loss 7z def9$ 9 subsection 7m77 ( su* individual ) respect to su* entity %all be tak5 into acc\nt 9 det]m9+ ! net e>n+s f self-employm5t ( su* individual4 4 7,b7 ,inve/m5t s]vices p>tn]%ip income or loss ,section #adjb is am5d$ by add+ at ! end ! foll[+ new subsection3 7m7 ,inve/m5t s]vices p>tn]%ip income or loss ,= purposes ( subsection 7a7-- 7#a7 ,9 g5]al ,! t]m inve/m5t s]vices p>tn]%ip income or loss means1 ) respect to any inve/m5t s]vices p>tn]%ip int]e/ 7z def9$ 9 section #gaj7;c77 or disqualifi$ int]e/ 7z def9$ 9 section #gaj7;e771 ! net (-- 7,a7 ! am\nts treat$ z ord9>y income or ord9>y loss "u subsections 7b7 & 7e7 ( section #gaj ) respect to su* int]e/1 7,b7 all items ( income1 ga91 loss1 & d$uction allocat$ to su* int]e/1 & 7,c7 ! am\nts treat$ z realiz$ f ! sale or ex*ange ( prop]ty o!r ?an a capital asset "u section #gea ) respect to su* int]e/4 7#b7 ,exception = qualifi$ capital int]e/s ,a rule simil> to ! rule ( section #gaj7;d7 %all apply = purposes ( apply+ p>agraph 7#a77;,b74 4 7#b7 ,social ,security ,act ,section #baa7;a7 ( ! ,social ,security ,act is am5d$ by /rik+ & at ! end ( p>agraph 7#ae71 by /rik+ ! p]iod at ! end ( p>agraph 7#af7 & ins]t+ 2 &1 & by ins]t+ aft] p>agraph 7#af7 ! foll[+ new p>agraph3 7#ag7 ,not)/&+ ! prec$+ provisions ( ?is subsection1 9 ! case ( any individual engag$ 9 ! trade or bus9ess ( provid+ s]vices describ$ 9 section #gaj7;c77#b7 ( ! ,int]nal ,rev5ue ,code ( #aihf ) respect to any entity1 inve/m5t s]vices p>tn]%ip income or loss 7z def9$ 9 section #adjb7m7 ( su* ,code7 %all be tak5 into acc\nt 9 det]m9+ ! net e>n+s f self-employm5t ( su* individual4 4 7f7 ,sep>ate acc\nt+ by p>tn] ,section #gjb7;a7 is am5d$ by /rik+ & at ! end ( p>agraph 7#g71 by /rik+ ! p]iod at ! end ( p>agraph 7#h7 & ins]t+ 1 &1 & by ins]t+ aft] p>agraph 7#h7 ! foll[+3 7#i7 any am\nt treat$ z ord9>y income or loss "u subsection 7a71 7b71 or 7e7 ( section #gaj4 4 7g7 ,con=m+ am5dm5ts 7#a7 ,subsection 7d7 ( section #gca is am5d$ by ins]t+ section #gaj7;b77#d7 7relat+ to di/ributions ( p>tn]%ip prop]ty71 aft] to ! ext5t o!rwise provid$ by4 7#b7 ,section #gda is am5d$ by ins]t+ or section #gaj 7relat+ to special rules = p>tn]s provid+ inve/m5t managem5t s]vices to p>tn]%ips7 be=e ! p]iod at ! end4 7#c7 ,! table ( sections = "p ,i ( sub*apt] ,k ( *apt] #a is am5d$ by add+ at ! end ! foll[+ new item3 ,sec4 #gaj4 ,special rules = p>tn]s provid+ inve/m5t managem5t s]vices to p>tn]%ips4 4 7#d7 7,a7 ,"p ,,iv ( sub*apt] ,o ( *apt] #a is am5d$ by /rik+ section #ajfa4 7,b7 ,! table ( sections = "p ,,iv ( sub*apt] ,o ( *apt] #a is am5d$ by /rik+ ! item relat+ to section #ajfa4 7h7 ,effective date 7#a7 ,9 g5]al ,except z o!rwise provid$ 9 ?is subsection1 ! am5dm5ts made by ?is section %all apply to taxable ye>s end+ aft] ! date ( enactm5t ( ?is ,act4 7#b7 ,p>tn]%ip taxable ye>s :i* include effective date ,9 apply+ section #gaj7;a7 ( ! ,int]nal ,rev5ue ,code ( #aihf 7z add$ by ?is section7 9 ! case ( any p>tn]%ip taxable ye> :i* includes ! date ( enactm5t ( ?is ,act1 ! am\nt ( ! net capital ga9 ref]r$ to 9 su* section %all be treat$ z be+ ! less] ( ! net capital ga9 = ! entire p>tn]%ip taxable ye> or ! net capital ga9 det]m9$ by only tak+ into acc\nt items attributable to ! portion ( ! p>tn]%ip taxable ye> :i* is aft] su* date4 7#c7 ,dispositions ( p>tn]%ip int]e/s 7,a7 ,9 g5]al ,section #gaj7;b7 ( su* ,code 7z add$ by ?is section7 %all apply to dispositions & di/ributions aft] ! date ( enactm5t ( ?is ,act4 7,b7 ,indirect dispositions ,! am5dm5ts made by subsection 7b7 %all apply to transactions aft] ! date ( enactm5t ( ?is ,act4 7#d7 ,o!r income & ga9 9 connection ) inve/m5t managem5t s]vices ,section #gaj7;e7 ( su* ,code 7z add$ by ?is section7 %all take effect on ! date ( enactm5t ( ?is ,act4 ,v ,inve/or protection & m>ket transp>5cy #eja4 ,disclosure ( fees & returns ,! ,inve/m5t ,company ,act ( #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq47 is am5d$ by add+ at ! end ! foll[+3 #ff4 ,disclosure ( fees & returns 7a7 ,def9itions ,9 ?is section1 ! t]ms private fund & t>get firm h ! mean+s giv5 ! t]ms 9 section #c ( ! ,/op ,wall ,/reet ,loot+ ,act4 7b7 ,rules ,n lat] ?an #a ye> aft] ! date ( enactm5t ( ?is section1 ! ,commission %all issue f9al rules t require a private fund to1 us+ g5]ally accept$ acc\nt+ pr9ciples1 annually report ! foll[+ in=mation ) respect to t private fund3 7#a7 ,! "n1 address1 & v9tage ye> ( ! fund4 7#b7 ,! "n ( ea* g5]al p>tn] ( ! fund4 7#c7 ,! "n ( ea* limit$ p>tn] ( ! fund4 7#d7 ,a li/ ( ea* entity ) respect to :i* ! fund owns a p]c5tage4 7#e7 ,9 doll>s1 ! total am\nt ( regulatory assets "u managem5t by ! fund4 7#f7 ,9 doll>s1 ! total am\nt ( net assets "u managem5t by ! fund4 7#g7 ,! p]c5tage ( fund equity contribut$ by ! g5]al p>tn]s ( ! fund & ! p]c5tage ( fund equity contribut$ by ! limit$ p>tn]s ( ! fund4 7#h7 ,in=mation on ! debt held by ! fund1 includ+-- 7,a7 ! doll> am\nt ( total debt2 7,b7 ! p]c5tage ( debt = :i* ! cr$itor is a f9ancial in/itution 9 ! ,unit$ ,/ates2 7,c7 ! p]c5tage ( debt = :i* ! cr$itor is a f9ancial in/itution outside ( ! ,unit$ ,/ates2 7,d7 ! p]c5tage ( debt = :i* ! cr$itor is an entity t is locat$ 9 ! ,unit$ ,/ates & is n a f9ancial in/itution2 & 7,e7 ! p]c5tage ( debt = :i* ! cr$itor is an entity t is locat$ outside ( ! ,unit$ ,/ates & is n a f9ancial in/itution4 7#i7 ,! gross p]=mance ( ! fund dur+ ! ye> cov]$ by ! report4 7#aj7 ,= ! ye> cov]$ by ! report1 ! diff]5ce obta9$ by subtract+ ! f9ancial ga9s ( ! fund by ! fees t ! g5]al p>tn]s ( ! fund *>g$ to ! limit$ p>tn]s ( ! fund 7commonly ref]r$ to z ! p]=mance net ( fees74 7#aa7 ,= ! ye> cov]$ by ! report1 an annual f9ancial /atem5t1 :i* %all include income /atem5ts1 a balance %eet1 & ca% fl[ /atem5ts4 7#ab7 ,! av]age debt-to-equity ratio ( ea* t>get firm ) respect to ! fund & ! debt-to-equity ratio ( ea* su* t>get firm4 7#ac7 ,! total gross asset value ( ea* t>get firm ) respect to ! fund & ! gross asset value ( ea* su* t>get firm4 7#ad7 ,! total am\nt ( debt held by ea* t>get firm ) respect to ! fund & ! total am\nt ( debt held by ea* su* t>get firm4 7#ae7 ,! total am\nt ( debt held by ea* t>get firm ) respect to ! fund t1 z ( ! date on :i* ! report is submitt$1 are categoriz$ z liabilities1 long-t]m liabilities1 & paym5t 9 k9d or z]o c\pon debt4 7#af7 ,! total numb] ( t>get firms ) respect to ! fund t exp]i5c$ default dur+ ! p]iod cov]$ by ! report1 includ+ ! "n ( any su* t>get firm4 7#ag7 ,! total numb] ( ! t>get firms ) respect to ! fund ) respect to :i* a case 0 comm5c$ "u title #aa1 ,unit$ ,/ates ,code1 dur+ ! p]iod cov]$ by ! report1 includ+ ! "n ( any su* t>get firm4 7#ah7 ,! p]c5tage ( ! equity ( ! fund t is own$ by-- 7,a7 citiz5s ( ! ,unit$ ,/ates2 7,b7 individuals :o are n citiz5s ( ! ,unit$ ,/ates2 7,c7 brok]s or deal]s2 7,d7 insurance companies2 7,e7 inve/m5t companies t are regi/]$ ) ! ,commission "u ?is ,act2 7,f7 private funds & o!r inve/m5t companies n requir$ to be regi/]$ ) ! ,commission2 7,g7 nonpr(it organizations2 7,h7 p5sion plans ma9ta9$ by ,/ate or local gov]nm5ts 7or an ag5cy or in/rum5tality ( ei!r72 7,i7 p5sion plans ma9ta9$ by nongov]nm5tal employ]s2 7,j7 ,/ate or municipal gov]nm5t entities2 7,k7 bank+ or ?rift in/itutions2 7,l7 sov]eign weal? funds2 & 7,m7 o!r inve/ors4 7#ai7 ,! total doll> am\nt ( aggregate fees & exp5ses collect$ by ! fund1 ! manag] ( ! fund1 or relat$ p>ties f t>get firms ) respect to ! fund1 :i* %all-- 7,a7 be categoriz$ by ! type ( fee2 & 7,b7 include a description ( ! purpose ( ! fees4 7#bj7 ,! total doll> am\nt ( aggregate fees & exp5ses collect$ by ! fund1 ! manag] ( ! fund1 or relat$ p>ties f ! limit$ p>tn]s ( ! fund1 :i* %all-- 7,a7 be categoriz$ by ! type ( fee2 & 7,b7 include a description ( ! purpose ( ! fees4 7#ba7 ,! total c>ri$ int]e/ claim$ by ! fund1 ! manag] ( ! fund1 or relat$ p>ties & ! total doll> am\nt ( c>ri$ int]e/ di/ribut$ to ! limit$ p>tn]s ( ! fund4 7#bb7 ,a description (1 dur+ ! ye> cov]$ by ! report1 any mat]ial *anges 9 risk factors at ! fund level1 includ+-- 7,a7 conc5tration risk2 7,b7 =eign ex*ange risk2 & 7,c7 extra-f9ancial risk1 includ+ environm5tal1 social1 & corporate gov]nance risk4 7#bc7 ,any o!r in=mation t ! ,commission det]m9es is necess>y & appropriate = ! protection ( inve/ors4 7c7 ,p]iodic review ,! ,commission %all1 ) respect to ! rules issu$ "u subsection 7b7-- 7#a7 review ! rules once e #e ye>s2 & 7#b7 revise ! rules z necess>y to ensure t ! disclosures requir$ "u ! rules reflect contempor>y 7z ( ! date on :i* ! rules are revis$7 tr5ds & *>act]i/ics ) respect to private inve/m5t m>kets4 7d7 ,public availability ,not)/&+ any provision ( section #bjd ( ! ,inve/m5t ,advis]s ,act ( #aidj 7#ae ,u4,s4,c4 #hj;b-#d71 ! in=mation disclos$ "u ! rules issu$ "u subsection 7b7 %all be made available to ! public4 4 #ejb4 ,fiduci>y obligations 7a7 ,fiduci>y duties "u ,,erisa ,section #dja7;b77#a7 ( ! ,employee ,retirem5t ,income ,security ,act ( #aigd 7#bi ,u4,s4,c4 #aaja7;b77#a77 is am5d$-- 7#a7 by ins]t+ or a private fund 7z def9$ 9 section #c ( ! ,/op ,wall ,/reet ,loot+ ,act7 be=e 1 ! assets2 & 7#b7 by ins]t+ or su* private fund1 z applicable be=e ! p]iod at ! end4 7b7 ,prohibition aga9/ waiv+ fiduci>y duties ,section #baa7;h7 ( ! ,inve/m5t ,advis]s ,act ( #aidj 7#ae ,u4,s4,c4 #hj;b-#aa7;h77 is am5d$-- 7#a7 9 p>agraph 7#a71 by /rik+ & at ! end2 7#b7 9 p>agraph 7#b71 by /rik+ ! p]iod at ! end & ins]t+ 2 &2 & 7#c7 by add+ at ! end ! foll[+3 7#c7 promulgate rules t prohibit an inve/m5t advis] f requir+ any p]son to :i* ! inve/m5t advis] provides inve/m5t advice1 includ+ a p5sion plan 7z def9$ 9 section #c ( ! ,employee ,retirem5t ,income ,security ,act ( #aigd 7#bi ,u4,s4,c4 #ajjb77 t is subject to title ,i ( ! ,employee ,retirem5t ,income ,security ,act ( #aigd 7#bi ,u4,s4,c4 #ajja et seq471 to1 z a condition ( ! inve/m5t advis] provid+ t advice1 sign a contract or o!r agreem5t 9 :i* t p]son waives a fiduci>y duty ow$ by t p]son to ano!r p]son4 4 7c7 ,applicability ( b5efits ,! g5]al p>tn] ( a private fund may n provide any t]m or b5efit to any limit$ p>tn] ( ! fund unless ! g5]al p>tn] provides t t]m or b5efit to all limit$ p>tn]s ( ! fund4 #ejc4 ,disclosures relat+ to ! m>ket+ ( private equity funds ,any inve/m5t advis] to a private fund %all disclose to pot5tial inve/ors ) respect to ! o!r private funds1 z def9$ 9 section #bjb7;a7 ( ! ,inve/m5t ,advis]s ,act ( #aidj 7#ae ,u4,s4,c4 #hj;b-#b7;a771 manag$ by t inve/m5t advis] 7ref]r$ to 9 ?is section z manag$ firms7 ! foll[+ in=mation3 7#a7 ,a li/ ( all manag$ firms ) respect to ! inve/m5t advis]1 includ+ ^? manag$ firms t1 z ( ! date on :i* ! disclosure is made-- 7,a7 h active inve/m5ts2 & 7,b7 h liquidat$ ! assets ( ! firms4 7#b7 ,= ea* manag$ firm li/$ "u p>agraph 7#a71 ! foll[+ in=mation3 7,a7 ,z applicable1 ! total t]m ( ! li/$ firm beg9n+ ) ! comm5cem5t ( ! commitm5t p]iod ) respect to ! firm & end+ on ! date on :i* ! firm is dissolv$1 includ+1 ) respect to a li/$ firm t1 z ( ! date on :i* ! disclosure is made1 is actively inve/+-- 7i7 ! t]m specifi$ by any limit$ p>tn]%ip agreem5t2 & 7ii7 ! nature ( any provisions t w\ld all[ = ! ext5sion ( t t]m4 7,b7 ,! p]=mance ( ! li/$ firm's net ( fees1 z measur$ by ! public m>ket equival5t or a simil> measure4 7,c7 ,a li/ ( t>get firms ) respect to :i* ! li/$ firm 0 a control p]son & ! p]iod ( t control4 7,d7 ,! numb] ( employees at ea* t>get firm id5tifi$ "u subp>agraph 7,c71 z ( ! date on :i* ! li/$ firm became a control p]son ) respect to ! t>get firm1 & ! date on :i* ! li/$ firm ceas$ to be a control p]son ) respect to ! t>get firm4 7,e7 ,a li/ ( t>get firms ) respect to ! li/$ firm ) respect to :i* a case has be5 comm5c$ "u title #aa1 ,unit$ ,/ates ,code4 7,f7 ,= ea* t>get firm ) respect to ! li/$ firm1 & ) respect to :i* ! li/$ firm is a control p]son-- 7i7 a li/ ( actions tak5 by any ,/ate or local regulatory ag5cy2 & 7ii7 any legal or regulatory p5alties paid1 or settlem5ts ent]$ into1 by ! g5]al p>tn]s ( ! t>get firm or ! t>get firm itself4 7#c7 ,! p]c5tage breakd[n ( ! means employ$ by ! inve/m5t advis] to dive/ own]%ip or control ( t>get firms1 includ+-- 7,a7 ! sale ( t>get firms to o!r private funds2 7,b7 ! sale ( t>get firms to private entities2 7,c7 ! sale ( t>get firms to issu]s1 ! securities ( :i* are trad$ on a national securities ex*ange2 7,d7 ! comm5cem5t ( cases "u title #aa1 ,unit$ ,/ates ,code1 ) respect to t>get firms2 & 7,e7 initial public (f]+s ) respect to t>get firms4 ,,vi ,re/rictions on securitiz+ risky corporate debt #fja4 ,risk ret5tion requirem5ts = securitization ( corporate debt ,section #ae;,g ( ! ,securities ,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4 #gho-#aa7 is am5d$-- 7#a7 9 subsection 7a77#c7-- 7,a7 9 subp>agraph 7,a71 by /rik+ or at ! end2 7,b7 9 subp>agraph 7,b71 by /rik+ & at ! end & ins]t+ or2 & 7,c7 by add+ at ! end ! foll[+3 7,c7 a manag] ( a collat]aliz$ debt obligation2 & 2 7#b7 by r$esignat+ subsection 7i7 z subsection 7j72 & 7#c7 by ins]t+ aft] subsection 7h7 ! foll[+3 7i7 ,rules ( con/ruction ,) respect to a securitiz] describ$ 9 subsection 7a77#c77;,c7-- 7#a7 any provision ( ?is section t requires t securitiz] to reta9 a portion ( ! cr$it risk = an asset t su* securitiz] does n hold1 or has nev] held1 %all be con/ru$ z requir+ t securitiz] to obta9 t portion ( ! cr$it risk = t asset2 & 7#b7 any ref]5ce 9 ?is section to an asset transf]r$ by ! securitiz] %all be con/ru$ to include any transf] caus$ by ! securitiz]4 4 ,,vii ,miscellane\s #gja4 ,anti-evasion ,x %all be unlawful to conduct any activity1 includ+ by ent]+ into an agreem5t or contract1 engag+ 9 a transaction1 or /ructur+ an entity1 to willfully evade or attempt to evade any provision ( ?is ,act4 #gjb4 ,sev]ability ,if any provision ( ?is ,act or ! application ( su* a provision to any p]son or circum/ance is held to be invalid or uncon/itutional1 ! rema9d] ( ?is ,act & ! application ( ! provisions ( ?is ,act to any p]son or circum/ance %all rema9 & %all n be affect$ by t hold+4