Regulatory Compliance Association Reviews

The Financial Stability Oversight Council and Non-Bank Financial Institutions – Bank-style Regulation Reaches U.S. Capital Markets

Practice Edge 02

The Financial Stability Oversight Council and Non-Bank Financial Institutions – Bank-style Regulation Reaches U.S. Capital Markets™

Date: September 24, 2014
General Session: 12 Noon to 1:30 PM
Location: Webcast (Free)

Interested in Continuing Compliance Education™, CLE or CPE (A & A hours), attend via the RCA’s Online University (On Demand) – free for Practice Edge Elite Members

To become a Practice Edge Elite Member, Click Here

The Dodd-Frank Act created a body called the “Financial Stability Oversight Council” or “FSOC,” chaired by the Treasury Secretary. FSOC’s members are presidential appointees, some of them agency heads.

FSOC may determine that any non-bank financial company is systemically important, if it “could pose a threat to the financial stability of the United States.” The non-bank would then be supervised by the Federal Reserve, the nation’s principal banking regulator.

So far, FSOC has designated 11 non-bank “systemically important financial institutions” or “SIFIs” and is now focused on the asset management industry and its products (e.g., mutual funds). This parallels a similar international initiative.

Subjecting non-banks to banking-style regulation raises two fundamental questions: (1) What might FSOC do based on what criteria?
(2) What are the implications – for firms, their products, investors, markets, and the financial system, of subjecting elements of the asset management industry to the Fed’s prudential supervision?

Our presenters will put these unprecedented developments into their policy and historical perspective. Specifically, presenters will acquaint participants with:

• FSOC’s jurisdiction, composition, processes, and standards.

• FSOC’s past and anticipated future activities.

• The Federal Reserve’s regulatory toolbox for prudential supervision.

• Regulatory structures currently applicable to principal types of non-banks.

• Implications of adding the Fed’s prudential supervision to regulation by a non-bank SIFI’s existing regulator (e.g., SEC, CFTC, or state authorities).

• Relevant international initiatives that are taking place contemporaneously.


Session Chairman:
Walter Zebrowski, JD, CPA, Principal, Hedgemony Partners
Chairman, Regulatory Compliance Association

Senior Fellow from Practice:
Paul Atkins, JD Chief Executive Officer, Patomak Global Partners, LLC

Guest Lecturers:

Kathleen Casey, JD Senior Advisor, Patomak Global Partners, LLC
Brian Cartwright, PhD, JD Senior Advisor, Patomak Global Partners, LLC