SIFMA Advocates against Determination that Asset Managers Are Systemically Significant

SIFMA released a statement from CEO and President Kenneth Bentsen regarding the Financial Stability Oversight Council ("FSOC") conference on the impact of the asset managers on financial stability.

Mr. Bentsen stated that, following the conference, SIFMA hoped that FSOC would continue its dialogue with industry participants to continue to study the asset management industry and make any findings transparent to the public before taking action regarding the designation of asset managers as systemically important financial institutions ("SIFIs").

Mr. Bentsen noted that SIFMA's view "remains that designating asset management firms or funds as SIFIs is unnecessary and would negatively impact investors," since asset managers serve as fiduciaries that invest money on behalf of their clients and do not guarantee investment returns or backstop investment losses experienced by clients. Therefore, he stated, the success or failure of an asset management firm does not affect investor assets or have a "meaningful" impact on financial stability.

Additionally, Mr. Bentsen stated, SIFMA believes that FSOC should allow the SEC to complete current reform initiatives and evaluate their cumulative impact before moving forward with any sort of SIFI designation.

See: SIFMA Statement on FSOC Asset Management Conference. Related news: SIFMA Says Asset Managers Do Not Pose Systemic Risk (with Lofchie Comment) (May 7, 2014); SIFMA AMG Submits Comments to the FSB on Assessment Methodologies for Identifying Non-Bank Non-Insurer G-SIFIs (April 4, 2014); SIFMA AMG Submits Comments to the FSB and SEC in Response to OFR Study and with Regard to Separate Accounts (April 7, 2014); SEC Commissioner Gallagher Submits Comment Letter in Opposition to FSOC Process (with Lofchie Comment) (May 15, 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); FSOC Issues 2014 Annual Report (with Lofchie Comment) (May 8, 2014); House Financial Services Committee Chairman Hensarling Urges Secretary Lew to Cease Using "Too Big to Fail" Designations (May 8, 2014).