On Monday afternoon, the Board of Governors of the Federal Reserve System issued a supervisory letter setting forth guidelines relating to banking entities’ applications to obtain an extension of the permitted seeding period for investments in hedge funds or private equity funds under Section 13 of the Bank Holding Company Act of 1956, as amended, commonly known as the “Volcker Rule,” and issued an order delegating the authority to approve such applications to the Federal Reserve Banks. Today’s Supervisory Letter and Order create a streamlined process for banking entities to seek approval to hold seed investments in covered funds for up to three years, subject to the procedural guidelines set forth in the Supervisory Letter and the other requirements of the Supervisory Letter and Order.