The Federal Reserve Board ("FRB"), the FDIC and the OCC provided no-action relief to asset managers and other institutions from Regulation O ("Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks") until January 1, 2021. Regulation O establishes quantitative limits and qualitative restrictions on extensions of credit by depository institutions to "insiders" (i.e., executive officers, directors, and principal shareholders and affiliates).

In their "Statement Regarding Status of Certain Investment Funds and Their Portfolio Investments for Purposes of Regulation O and Reporting Requirements under Part 363 of FDIC Regulations," the banking agencies announced that they will not recommend enforcement actions in connection with certain loans where the fund complex has less than 15% interest in the bank, the fund complex does not try to have a representative serve as an officer, agent or employee of the bank, the fund complex does not seek to exercise controlling influence over the bank's management or to control the bank's lending policies, and the bank can demonstrate that the loan was made on the same terms as a loan made to an unrelated party.

In the interim, the FRB, FDIC, and OCC stated they will assess whether they should amend the treatment of extensions of credit by banks to portfolio companies that are part of a fund complex that owns more than 10% of the bank. The agencies expressed concern that as fund complexes become owners of 10% or more of the voting securities of banks, the effect of Regulation O will be to prohibit loans by the 10% owned bank to a large number of other entities in which the fund complex has a 10% ownership interest. As a result, the agencies are concerned that Regulation O might financially impact the bank by forcing it to discontinue a large number of pre-existing lending relationships and reduce credit availability to a significant swath of financial and non-financial companies.