The Basel Committee is consulting on a three-step decision tree framework for applying capital requirements to banks' equity investments in funds. As a general principle, banks should apply a look-through approach to identify the risks of the underlying assets. If that is not possible, banks would have to resort to a mandate-based approach. In the absence of investment mandate information, a fall-back approach would require the application of a 1,250% risk weight. The resulting capital requirements would also have to reflect the fund's leverage. It asks for comments by 4 October. (Source: Consultation on Capital for Banks’ Equity Investments in Funds)