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ETF News

FACTBOX-New regulations limit banks' investments in hedge funds

 June 25 (Reuters) - The U.S. financial regulatory reform bill is set to
limit banks' investment in hedge funds and private equity firms, and Goldman
Sachs will have the most work to do.
 Under the law now before Congress, still subject to final approval, up to 3
percent of a bank's Tier 1 capital can be invested in private equity and hedge
funds. For Goldman, the gap between the investments potentially affected and
the 3 percent limit is biggest.
 But banks are expected to have multiple years to comply with the law,
making it not necessarily onerous.
 Below is a table of the five largest U.S. dealers' Tier 1 capital and the
amount they can set aside for investments in hedge funds and private equity.
 (Billions of dollars as of Dec. '09))
 COMPANY                 TIER 1 CAPITAL  INVESTMENTS   3 PERCENT    NOTES
                                         POTENTIALLY   OF TIER 1
                                         AFFECTED      
 JPMorgan Chase JPM.N     132.97            5.9         3.99           1
 Bank of America BAC.N    120.39           14.07        3.61
 Citigroup C.N            104.50            5           3.14           2
 Goldman Sachs GS.N        64.64           15.92        1.94
 Morgan Stanley MS.N       46.67            4.9         1.40
 Notes:
 1) JPMorgan figure includes only private equity investments, and does not
include hedge funds or real estate
 2) According to person familiar with the matter; all other banks disclosed
information in their regulatory filings
 (Compiled by Bangalore and New York newsrooms)


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