(1) On the making of an election by a filing constituent entity, a constituent entity that is an investment entity shall be treated as a tax transparent entity for the purposes of this Part if -
(a) the constituent entity-owner is subject to tax in the jurisdiction in which it is located under a fair market value or a similar regime based on the annual changes in the fair value of its ownership interest in such entity, and
(b) the tax rate applicable to the constituent entity-owner on the annual changes in the fair value of its ownership interest referred to in paragraph (a) equals or exceeds the minimum tax rate.
(2) For the purposes of subsection (1), a constituent entity that indirectly owns an ownership interest in an investment entity (in this subsection referred to as the 'first-mentioned investment entity') through a direct ownership interest in another investment entity (in this subsection referred to as the 'second-mentioned investment entity') shall be considered to be subjec
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