S. 2663 — Merchant Banking Modernization Act

This section requires Federal Reserve regulations under the Bank Holding Company Act of 1956 to authorize a general holding period for merchant banking investments of not less than 15 years (from 10 years). It further requires that any such investment held on the date of enactment of the Merchant Banking Modernization Act have a permitted holding period of not less than 15 years from its initial investment date. (As background, merchant banking permits financial holding companies to acquire equity in nonfinancial companies for resale—rather than control or long-term ownership—with holding periods set by Federal Reserve regulation.)