This time last year, it looked like Wall Street was about to be ejected from the “equity” part of private equity. Early versions of financial reform legislation included the so-called Volcker Rule, which would have prohibited banks from sponsoring or managing private equity funds (among other prohibitions).

But then Congress watered down Volcker with a fire-hose, allowing such sponsorship so long as the banks met four conditions:

1. The bank’s own commitment to the fund can not represent more than 3% of the bank’s Tier 1 capital
2. No more than 3% of the fund’s capital can be provided by the bank
3. The fund name can not be similar to the bank’s name
4. Bank employees would not be allowed to invest in the fund, unless they are directly working on the fund.

So how does this impact Goldman Sachs’ plan to raise up to $1.5 billion from bank clients, via a special purpose vehicle that would invest in Facebook? Let’s quickly dismiss the first three:

1. Irrelevant. This Facebook investment may be huge, but it’s barely a blip on Goldman’s $900 billion (or so) balance sheet.
2. This requirement also is irrelevant, since this SPV is solely for bank clients. Goldman is investing $500 million in Facebook off of its balance sheet, but likely not via the SPV (distinction without a difference to everyone except regulators).
3. Also irrelevant, unless everyone in Goldman’s compliance department is dropping Ambien.

It’s this fourth requirement where the Volcker Rule — or at least what now passes for it — could have at least a modest impact.

Banks like Goldman (GS) traditionally have offered certain employees the opportunity to invest in certain transactions, particularly via their private equity units. Under these new regulations, however, it seems that Goldman employees would be prevented from participating in the SPV.

“Wait a minute,” says hypothetical reader. “This isn’t a private equity fund. It’s a special purpose vehicle. And, if it’s going to be qualified as a fund at all, wouldn’t it be a ‘venture capital’ fund instead of a ‘private equity’ fund?”

Glad you asked, hypothetical reader.

Another section of Dodd-Frank asked the SEC to define “venture capital” funds as different from “private equity” funds, in order to exempt VC funds from registration requirements. The SEC took its first stab at it last month, and this initial language would not apply to Goldman’s Facebook vehicle.

For example, “venture capital” funds primarily provide operating or business expansion capital, rather than liquidity to existing shareholders. I’m sure that some of the $1.5 billion will be used to help Facebook hire, achieve world domination, etc… but some also is almost certain to be used to (partially) cash out existing backers. Moreover, “venture capital” funds need to control its portfolio companies or offer a significant amount of managerial assistance. Unless Goldman plans to argue that underwriting Facebook’s IPO is said assistance — and unless that quid pro quo is codified — then this would not seem to count. Remember, Goldman doesn’t even let its employees use Facebook.

As to the SPV vs. PE issue, Goldman and Facebook almost certainly are going to argue that this is a PE fund in which Goldman is the managing  general partner. By doing so, Facebook could claim all $1.5 billion as a single investor, rather than as hundreds of individual investors (thus helping to trigger rules that would require it to publicly disclose its financials). I’m still not sure it’s an argument that can be won, but losing would be a very drawn-out process (considering that the SEC is just beginning its inquiry into secondary private market trading).

So here’s the upshot: Goldman Sachs clients can buy a piece of Facebook. Its employees cannot. Oh, and neither can (most of) you.