the amount of partnership distributions, the value of partnership assets, or the results of partnership operations). (ii) Exception for non-convertible debt Such term shall not include a financial instrument or contract if such instrument or contract— (I) is treated as debt for Federal tax purposes, and (II) is not convertible into or exchangeable for any partnership interest and does not provide for a payment of similar or equivalent value. (3) Applicable trade or business (A) In general For purposes of paragraph (1)(A), the term applicable trade or business means any activity conducted on a regular, continuous, and substantial basis which, regardless of whether the activity is conducted in one or more entities, consists, in whole or in part, of— (i) raising or returning capital, and (ii) either— (I) investing in (including acquiring or disposing of) specified assets (or identifying specified assets for such investing, acquisition, or disposition), or (II) developing specified assets. (B) Specified assets (i) In general The term specified assets means securities, commodities, real estate held for rental or investment, cash or cash equivalents, options or derivative contracts with respect to any of the foregoing, and an interest in a partnership if such partnership has a direct or indirect interest in any of the foregoing. (ii) Securities For purposes of clause (i), the term securities has the meaning given such term under section 475(c)(2), determined— (I) by applying subparagraph (B) thereof without regard to whether the partnership or trust is widely held or publicly traded, and (II) without regard to the last sentence thereof. (iii) Commodities For purposes of clause (i), the term commodities has the meaning given such term under section 475(e)(2), except that such term shall not include commodities held in connection with the active conduct of a commodities business as a producer, processor, merchant, or handler of commodities. (4) Applicable loan (A) In general The term applicable loan means, with respect