H.R. 4061 The Financial Stability Oversight Council Improvement Act of 2017

Summary

SIFMA provided comments to the House of Representatives on H.R. 4061 , the Financial Stability Oversight Council Improvement Act of 2017

Excerpt

March 20, 2018

The Honorable Paul Ryan

Speaker of the House of Representatives

H-232, US Capitol

Washington, DC 20515

The Honorable Nancy Pelosi

Minority Leader, House of Representatives

H-204, US Capitol

Washington, DC 20515

Dear Speaker Ryan and Minority Leader Pelosi,

The Securities Industry and Financial Markets Association (SIFMA)1 urges the House of Representatives to approve H.R. 4061, the Financial Stability Oversight Council Improvement Act of 2017. Introduced by Representatives Ross (R-FL) and Delaney (D-MD), this bipartisan bill would codify into law the Financial Stability Oversight Council’s transparency and systemically important financial institution (SIFI) designation process improvements, and enable non-bank financial companies to self-cure by carrying out certain derisking activities prior to being designated SIFIs. By promoting transparency in the SIFI designation process,this legislation will facilitate clearer analysis of the methods that the FSOC uses to assess the unique characteristics of risk associated with the asset management industry.

The Securities Industry and Financial Markets Association’s Asset Management Group (SIFMA AMG) members represent a broad swath of the asset management industry, whose investors maintain legal ownership and control over their assets and make decisions on how their assets are allocated. The success or failure of an asset management firm does not impact investors’ assets; asset managers and the funds they manage therefore do not pose the systemic risks that may exist elsewhere. Designating an asset management company as a systemically important financial institution has significant consequences, imposing stringent, bank-like capital standards resulting in undue and burdensome costs that would be passed onto investors, ultimately harming their retirement savings and future financial security.

SIFMA believes that this commonsense, bipartisan legislation will help preserve fund managers’ ability to serve investors, facilitate capital formation, and drive economic growth, and we recommend House passage.

Sincerely,

Kenneth E. Bentsen, Jr.

President & CEO

Securities Industry and Financial Markets Association

CC: The Honorable Dennis Ross

The Honorable John Delaney

1 SIFMA is the voice of the U.S. securities industry. We represent the broker-dealers, banks and asset managers whose nearly 1 million employees provide access to the capital markets, raising over $2.5 trillion for businesses and municipalities in the U.S., serving clients with over $20 trillion in assets and managing more than $67 trillion in assets for individual and institutional clients including mutual funds and retirement plans. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA).