SIFMA Expresses Concern with IMF’s Financial System Stability Assessment that Targets the Asset Management Industry

Release Date: July 8, 2015
Contact: Liz Pierce, 212-313-1173, lpierce@sifma.org

SIFMA Expresses Concern with the IMF’s Financial System Stability Assessment that Targets the Asset Management Industry

Washington, DC, July 8, 2015 –SIFMA today issued the following statement after the International Monetary Fund (“IMF”) released a Financial System Stability Assessment (“the Assessment”) that focuses on investment funds such as mutual funds, exchange traded funds and pension funds:

Kenneth E. Bentsen, Jr., SIFMA president and CEO, said:
“We are concerned that the IMF’s Assessment makes assertions about risk posed by mutual funds, exchange traded funds and pension funds that are not backed by empirical evidence or analysis. Further, the Assessment is at odds with recent direction from the International Organization of Securities Commissions that asset management activities and products should be the immediate focus of international efforts to identify potential systemic risks and vulnerabilities. As demonstrated by SIFMA and numerous others in comments to regulators, asset managers and the funds they manage do not present systemic risk. Speculative and unsubstantiated reports that target asset managers and disregard basic facts about the industry could hamper managers’ ability to serve investors, and disrupt the broader capital markets system.”

Timothy Cameron, managing director and head of SIFMA’s Asset Management Group (SIFMA AMG), added:
“Systemic designation and the imposition of bank-like regulation for asset management funds could lead to increased costs and other negative consequences for investors and capital markets without addressing any systemic risk concerns. SIFMA AMG has demonstrated in letters to the Financial Stability Oversight Counsel, the Financial Stability Board and the International Organization of Securities Commissions how a review of asset manager products and activities is the most effective way to assess risk in this industry. We support the Securities and Exchange Commission’s current review of products and activities that will ensure the industry is properly overseen and regulated, and we are encouraged by recent statements from global regulators that they will follow course. These national and international regulatory initiatives to assess products and activities should demonstrate to the IMF and others that no additional regulation is warranted.”