SIFMA today issued the following statement from SIFMA’s Asset Management Group (SIFMA AMG) regarding changes to guidance on nonbank financial company designations proposed today by the Financial Stability Oversight Council (FSOC):
“SIFMA AMG has long advocated a shift away from focusing on designating asset managers as systemically important given the agency-nature of the business-model. Asset managers are directed by investor clients, generally do not hold custody of assets and, therefore, have small balance sheets.
“Upon initial review, the removal of language requiring consideration of an activities-based approach prior to a firm’s designation, as well as the elimination of the cost-benefit analysis and an assessment of the likelihood of a firm’s material distress is concerning. We look forward to commenting after further examining the proposal.”+
