At its last meeting in 2014 (see Client Report FSOC15), FSOC officially threw in the towel on designating individual asset-management companies as SIFIs. This is a major victory for the industry, which rallied formidable opposition against firm-specific designation in the U.S. following an OFR report seemingly supporting it (see Client Report SYSTEMIC74) and an international proposal laying out designation criteria (see FSM Report SYSTEMIC70). However, sometimes getting what you want turns out to be far from the hoped-for happy result. With a broad focus now on new SEC rules for the industry (see Client Report MMF14) and FSOC’s systemic standards, the next round will force fundamental structural changes across the full spectrum of asset-management – hedge funds, insurance companies, and big banks included. What might these be?
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