SIFMA AMG and Other Associations Submit Petition to FSOC on Rulemaking Related to Supervision and Regulation of Non-SIFIs

The Asset Management Group of SIFMA ("SIFMA AMG") and the American Council of Life Insurers, the American Financial Services Association, the Association of Institutional Investors and the Financial Services Roundtable (collectively, the "Associations") submitted a petition to the Financial Stability Oversight Council ("FSOC") to amend the FSOC's existing rules concerning the designation of nonbank systemically important financial institutions ("SIFIs") for supervision by the Board of Governors of the Federal Reserve System.

According to the Associations, the current designation rules used by FSOC consist of standards and procedures that are "vague and opaque both on their face and as applied." Furthermore, the Associations stated, the current rules deprive nonbank financial companies of fair notice of the information on which FSOC is relying as well as FSOC's reasoning at various stages of the designation process, therefore denying companies "a reasonable opportunity to evaluate and contest [FSOC]'s preliminary conclusions."

In short, the amendments to the designation rules sought by the Associations would (i) improve the scope and quality of the data and information available to FSOC, (ii) improve the notice provided to a nonbank financial company being considered for a proposed or final determination, and (iii) ensure that primary financial regulatory agencies are afforded a meaningful opportunity to participate in any proposed or final determination.

See: SIFMA AMG and the Associations' Petition to FSOC. Related news: Representative Maloney Recommends Changes to FSOC Designation Process (with Lofchie Comment) (August 4, 2014); SEC Commissioner Piwowar Slams FSOC (with Lofchie Comment) (July 15, 2014); House Financial Services Committee Schedules Markup of FSOC Bills (June 17, 2014) House Financial Services Committee Hearing: "Examining the Dangers of the FSOC's Designation Process and Its Impact on the U.S. Financial System" (with Delta Strategy Group Summary) (May 21, 2014) House Financial Services Committee Chairman Calls on FSOC to Cease and Desist (May 20, 2014); House Financial Services Subcommittee Chairmen Send Letter to FSB and FSOC Requesting Information on Methodologies Used to Designate G-SIFIs (with Lofchie Comment) (May 9, 2014); House Financial Services Committee Chairman Hensarling Urges Secretary Lew to Cease Using "Too Big to Fail" Designations (May 8, 2014); Representative Garrett Questions the SIFI Designation Authority Granted to FSOC by Dodd-Frank (with Lofchie Comment) (May 6, 2014); House Subcommittee Chair Garrett Delivers Opening Remarks at Oversight of SEC Hearing, Focuses on FSOC and NMS (with Lofchie Comment) (April 29, 2014); House Financial Services Subcommittee Chairman Introduces Legislation to Reform FSOC (with Lofchie Comment) (April 3, 2014); SEC Commissioner Aguilar Gives FSOC Thumbs-down on Mutual Funds, Discusses Cybersecurity and Reg. NMS (with Lofchie Comment) (April 2, 2014).