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to this section or 2 years after the date on which the entity or company becomes a nonbank financial company supervised by the Board. The Board may, by rule or order, extend this two-year period for not more than one year at a time, if, in the judgment of the Board, such an extension is consistent with the purposes of this section and would not be detrimental to the public interest. The extensions made by the Board under the preceding sentence may not exceed an aggregate of 3 years. ‘‘(3) EXTENDED TRANSITION FOR ILLIQUID FUNDS.— ‘‘(A) APPLICATION.—The Board may, upon the applica- tion of a banking entity, extend the period during which the banking entity, to the extent necessary to fulfill a contractual obligation that was in effect on May 1, 2010, may take or retain its equity, partnership, or other owner- ship interest in, or otherwise provide additional capital to, an illiquid fund. ‘‘(B) TIME LIMIT ON APPROVAL.—The Board may grant 1 extension under subparagraph (A), which may not exceed 5 years. ‘‘(4) DIVESTITURE REQUIRED.—Except as otherwise provided in subsection (d)(1)(G), a banking entity may not engage in any activity prohibited under subsection (a)(1)(B) after the ear- lier of— ‘‘(A) the date on which the contractual obligation to invest in the illiquid fund terminates; and ‘‘(B) the date on which any extensions granted by the Board under paragraph (3) expire. ‘‘(5) ADDITIONAL CAPITAL DURING TRANSITION PERIOD.—Not- Regulations. withstanding paragraph (2), on the date on which the rules are issued under subsection (b)(2), the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission shall issue rules, as provided in subsection (b)(2), to impose additional capital requirements, and any other restrictions, as appropriate, on any equity, partnership, or ownership interest in or sponsor- ship of a hedge fund or private equity fund by a banking entity. ‘‘(6) SPECIAL RULEMAKING.—Not later than 6 months after Deadline. the date of enactment of this section, the Board shall issues rules to implement paragraphs (2) and (3). ‘‘(d) PERMITTED ACTIVITIES.— ‘‘(1) IN GENERAL.—Notwithstanding the restrictions under subsection (a), to the extent permitted by any other provision of Federal or State law, and subject to the limitations under paragraph (2) and any restrictions or limitations that the appro- priate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, may determine, the following activities (in this section referred to as ‘permitted activities’) are permitted: ‘‘(A) The purchase, sale, acquisition, or disposition of obligations of the United States or any agency thereof, obligations, participations, or other instruments of or issued by the Government National Mortgage Association, the Federal National Mortgage Association, the Federal Home LAWS Loan Mortgage Corporation, a Federal Home Loan Bank, the Federal Agricultural Mortgage Corporation, or a Farm Credit System institution chartered under and subject toPUBLIC with on anorris VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00249 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203