SIFMA today released the following statement from Kenneth E. Bentsen, Jr., SIFMA president and CEO, regarding the Financial Stability Oversight Council (FSOC) conference on the impact of asset managers on financial stability:
“We are encouraged that FSOC has taken a step to engage with the asset management industry at today’s conference. It’s vital that the FSOC engage in meaningful dialogue with industry participants and further study the asset management industry and its unique characteristics before making any decisions regarding the designation of asset managers as SIFIs. Following today’s conference, we hope the FSOC will continue this dialogue with the industry and make any findings transparent to the public before taking any action. SIFMA’s view remains that designating asset management firms or funds as SIFIs is unnecessary and would negatively impact investors. An activities-based approach is the most effective way to regulate the types of behavior that could impact financial stability. Further, the FSOC should allow asset managers’ primary regulator, the SEC, to complete current reform initiatives and evaluate their cumulative impact before moving forward with any sort of SIFI designation.
“Asset managers have a distinct legal, corporate and operating structure that the FSOC must clearly recognize in comparison to banks and other types of financial institutions. Asset managers serve as fiduciaries that invest money on behalf of their clients. There is a legal separation between client assets under management and a firm’s balance sheet, and asset managers do not guarantee investment returns or backstop investment losses experienced by clients. The success or failure of an asset management firm does not affect investor assets and does not have a meaningful impact on financial stability.”
SIFMA’s comment letter to FSB and IOSCO on assessing systemic risk posed by investment funds is available here: http://www.sifma.org/newsroom/2014/sifma_amg_comments_on_assessment_methodologies_for_identifying_nbni_g-sifis_and_provides_data_on_separate_accounts/ .
SIFMA’s comment letter on the OFR Study of Asset Managers is available here: http://www.sifma.org/newsroom/2013/sifma-amg-and-iaa-express-concerns-with-ofr-study-on-asset-managers-seek-withdrawal-of-the-study/.
