SIFMA’s Asset Management Group (SIFMA AMG) today issued the following statement from Lindsey Keljo, managing director and head of the AMG, related to the postponement of rule proposals from the FDIC on asset managers regarding “control”:
“SIFMA AMG appreciates Director McKernan and Director Chopra’s decision to table their proposals that would revise the FDIC’s approach to passivity agreements and assessments of noncontrolling investments in FDIC-supervised institutions. As we note in our letter filed with the FDIC earlier this week, we believe the FDIC’s current approach has worked well and is not in need of reevaluation. We also noted that some of the suggestions that were under consideration could have serious unintended consequences, including a detrimental impact on bank capital, as noted by Vice Chair Hill at today’s meeting. By withdrawing the proposals today, we believe the FDIC will have the opportunity to further engage with industry and more thoughtfully consider proposed changes before determining whether to proceed. We also think it is important to consider Acting Comptroller of the Currency Hsu’s concerns regarding ensuring any regulatory process includes all relevant regulatory agencies.
“Millions of Americans save for retirement and other financial goals with the help of funds managed by asset managers. Investors benefit from economies of scale and are paying lower fees than ever before, largely due to the lower costs of index investing. Such funds provide investors with exposure to many sectors of the economy including banking and as such are an important source of capital for the sector. Any reevaluation of asset managers’ investments in FDIC-supervised institutions should be done through a thoughtful, transparent and public notice-and-comment process that is designed to avoid limiting banks’ access to capital and risk unduly disincentivizing investment in banks and increasing the cost of investment for retail investors in the United States. We stand ready to work with the FDIC and its Directors as it considers what changes, if any, are necessary that would address concerns without negatively impacting our markets.”
