Friday, August 1, 2014

FSOC May Seek Better Regulation in Lieu of SIFI Designation for Asset Management Industry

Council Adopts a "Wait and See" Attitude

Author: David Schwartz J.D. CPA
In an apparent reaction to strong criticism from legislators, asset management industry groups, and even the Securities and Exchange Commission,  the Financial Stability Oversight Counsel (FSOC) has indicated that it may encourage stronger regulation of the asset management industry, rather than designating certain industry participants as SIFIs.  In the FSOC's press release for its July 31, 2014 meeting, the Council indicated that it was encouraged by the new money market rules finalized by the SEC one week prior, and would take a step back to observe their effectiveness before moving forward with implementation of SIFI designations for asset managers and mutual fund groups.
Comments (0)
Number of views (5779)

Tuesday, May 20, 2014

Congress Raises More Concerns Regarding SIFI Designation

Congress Calls into Question FSB's Role in SIFI Designation

Author: David Schwartz J.D. CPA
Congress has once again raised concerns about the Fed's plans for non-bank SIFIS.  In a May 9, 2014 letter to Treasury Secretary Jack Lew, Fed Chair Yellen, and SEC Chair Mary Jo White, members of the US House of Representatives Committee on Financial Services questioned the role of the Financial Stability Board, an international body which is an unincorporated Swiss association with no authority or oversight under US law, in the process for designation of G-SIFIs. The authors of letter are generally concerned “about decisions being made that could have a significant impact on the U.S. economy and its citizens through a nontransparent process, by an international body that is not accountable to the American people.”
Comments (0)
Number of views (7266)

Wednesday, April 23, 2014

FSOC Takes Heat from Congress over Asset Manager SIFI Designation

A Bipartisan Congressional Demand for More Transparency and Cooperation

Author: David Schwartz J.D. CPA

Congress has once again expressed concerns about SIFI designation and the asset management industry, and in particular the openness and integrity of the regulatory bodies developing SIFI policy. In reaction to the Office of Financial Research's (OFR) September 2013 report analyzing the potential systemic risks of the asset management industry, 41 members of Congress penned an April 9, 2013 letter to the Financial Stability Oversight Council requesting that any further review of the asset management industry take place “in an open and transparent manner.” The bipartisan letter also harshly criticizes the OFR report substantively and requests that the FSOC revisit its process and findings to “precisely identify the systemic risks it is trying to address” and “explain in detail how any identified risks would be mitigated” by subjecting asset management firms to supervision by the Federal Reserve. In addition, the letter urges that any regulatory action ultimately implemented should “not limit access to these services or cause them to become cost-prohibitive.”

Comments (0)
Number of views (7285)
RSS
12