Acting unanimously to implement a key plank of President Trump’s regulatory-relief agenda, FSOC has approved final guidance to repeal the current standards determining which nonbanks are designated as systemically-important financial institutions (SIFIs) subject then to FRB supervision and regulation. Although designations could still be made in rare or emergency circumstances, the new approach provides considerably more opportunities to contest it.  It also creates an “activity-based” framework that relies on the willingness and authority of primary regulators to govern activities or practices FSOC identifies as financial-stability risks.

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