SOF III - 1081 Southern Financial LLC Volcker Rule. Section 619 of the Dodd-Frank Act established a new section 13 of the BHC Act, commonly referred to as the "Volcker Rule". Among other things, the Volcker Rule generally prohibits "banking entities" from sponsoring, or investing in, "covered funds," except to the extent permitted pursuant to an available exemption. In addition, a "banking entity" and its affiliates are prohibited from entering into certain transactions with (such as extending credit to or purchasing assets from) any "covered fund" that the banking entity sponsors, organizes and offers or for which it serves, directly or indirectly, as investment manager, investment adviser or commodity trading adviser. Although Deutsche Bank is a German banking corporation, it is treated as a bank holding company for purposes of the BHC Act. As a consequence, Deutsche Bank and each of its subsidiaries and affiliates (including the Master Fund Manager and Investment Manager) are "banking entities" for purposes of the Volcker Rule and, therefore, subject to its requirements. In addition, it is anticipated that the Master Fund and the Feeder Funds will be offered to US residents on a private placement basis and will constitute "covered funds" pursuant to the Volcker Rule. As a consequence, the Master Fund Manager and the Investment Manager will be required to comply with the requirements of the so-called "asset management exemption" under Section _.11 of the rules to implement the Volcker Rule (the "Implementing Regulations"). The applicable US federal regulators have only recently issued final versions of the Implementing Regulations and these final rules are still being reviewed and analyzed. In conjunction with the issuance of the final rules, US federal regulators have given banking entities until July 2015 to come into compliance with them; during this period, Deutsche Bank will analyze the final rules and devise the appropriate compliance