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SIFMA’s Asset Management Group (SIFMA AMG) today issued the following comment regarding changes to guidance on nonbank financial company designations as proposed by the Financial Stability Oversight Council (FSOC):
“FSOC’s decision today to finalize its interpretive guidance and risk framework is disappointing. As we explained in our comment letter, the changes proposed are entirely unnecessary for many nonbank financial companies, like asset managers, which are already subject to stringent federal oversight by the SEC and have shown consistent resilience in times of economic stress. SIFMA AMG has long supported FSOC’s activities-based approach in identifying and addressing systemic risk, as this approach reduces the potential for competitive distortions among companies and in markets that could arise from entity-specific regulation and supervision. As acknowledged by the FSOC in its 2019 guidance, an activities-based approach also better ensures that FSOC may ‘identify and address the sources of risk to financial stability on a system-wide basis, rather than addressing risks only at a particular nonbank financial company that may be designated.’ We are closely examining the details of today’s release, and we continue to urge FSOC to only consider entity-based designations as a last resort.”
