FSB to Go Slow on Risk Analysis of Investment Funds; SIFMA AMG Applauds Decision (with Lofchie Comment)

The Financial Stability Board ("FSB") announced that it had decided to wait to finalize the assessment methodologies for non-bank, non-insurer, global systemically important financial institutions ("NBNI G-SIFIs") until the current FSB work on financial stability risks from asset management activities is completed. FSB stated that this will allow further analysis of potential financial issues associated with asset management entities and activities to inform the revised assessment methodology.

SIFMA Asset Management Group ("SIFMA AMG") applauded FSB's decision to prioritize a review of asset manager activities before considering any asset management entities for designation as systemically important. SIFMA AMG also stressed the need for FSB to proceed transparently and noted that industry engagement through a consultation process should precede the development of any activity-based policy recommendations. SIFMA AMG further recommended that FSB permanently conclude its asset management entity assessment workstream and allow time for specialized individual regulators to complete reviews of the activities of asset managers and their respective funds to evaluate if any additional oversight is needed.

Lofchie Comment: FSB's decision is consistent with prior SIFMA AMG recommendations.

See: SIFMA Press Release; FSB Statement: "Next Steps on the NBNI G-SIFI Assessment Methodologies."See also: SIFMA AMG Expresses Concern with FSB's Peer Review of Asset Management Industry (with Lofchie Comment) (July 24, 2015).