investment asset
(1) Substantial risk of forfeiture (A) In general The rights of a person to compensation shall be treated as subject to a substantial risk of forfeiture only if such person’s rights to such compensation are conditioned upon the future performance of substantial services by any individual. (B) Exception for compensation based on gain recognized on an investment asset (i) In general To the extent provided in regulations prescribed by the Secretary, if compensation is determined solely by reference to the amount of gain recognized on the disposition of an investment asset, such compensation shall be treated as subject to a substantial risk of forfeiture until the date of such disposition. (ii) Investment asset For purposes of clause (i), the term “investment asset” means any single asset (other than an investment fund or similar entity)— (I) acquired directly by an investment fund or similar entity, (II) with respect to which such entity does not (nor does any person related to such entity) participate in the active management of such asset (or if such asset is an interest in an entity, in the active management of the activities of such entity), and (III) substantially all of any gain on the disposition of which (other than such deferred compensation) is allocated to investors in such entity. (iii) Coordination with special rule Paragraph (3)(B) shall not apply to any compensation to which clause (i) applies.