WASHINGTON — The Federal Reserve Board is expected to approve a final rule on Wednesday governing the merchant banking activities of financial holding companies.

The rule, which implements part of the Gramm-Leach-Bliley Act of 1999, stirred controversy when it was introduced in interim form last March. Bankers and others objected to a cap that limited their merchant banking activities to the lesser of $6 billion or 30% of the financial holding company’s Tier 1 capital. They also complained about a 10-year time limit on how long institutions may hold such investments.

The Fed has not indicated what, if any, elements of the final rule will be changed in response to these comments.

A separate proposal, also issued in March, would have required banks to hold 50 cents in capital for every dollar of merchant banking investments. That proposal provoked such a firestorm of negative comment from the industry that the central bank has indicated that it will not finalize the rule, but will issue an alternative proposal for comment. The Fed has not said when the new proposal will be released.

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