SIFMA's Asset Management Group today released the following statement from Timothy Cameron, managing director and head of SIFMA's Asset Management Group, in response to the American Action Forum's new research on "The Investor Cost of Designating Investment Funds as Systemically Important Financial Institutions."
"The study underscores SIFMA's view that designating asset management firms or funds as SIFIs is unnecessary and would negatively impact investors and the broader financial system. Bottom line, asset managers are very different from banks and other financial institutions. It's imperative that the FSOC recognize the tremendous volume of research and data that demonstrate these differences before moving forward with the designation process. Asset managers invest money on behalf of their investor clients, and there is a legal separation between client "assets under management" and a firm's balance sheet. The success or failure of an asset management firm does not impact investor assets - certainly not in a fashion which would require taxpayer support or a government bailout.
"SIFMA continues to believe that an activities-based approach is the most effective way to regulate the types of behavior that could impact financial stability. The FSOC should allow asset managers' primary regulators, the SEC and the CFTC, to complete current reform initiatives and evaluate their cumulative impact on the mitigation of systemic risk, prior to moving forward with any sort of SIFI designation."
SIFMA's comment letter to FSB and IOSCO on assessing systemic risk posed by investment funds is available here: http://www.sifma.org/newsroom/2014/sifma_amg_comments_on_assessment_methodologies_for_identifying_nbni_g-sifis_and_provides_data_on_separate_accounts/ .
SIFMA's comment letter on the OFR Study of Asset Managers is available here: http://www.sifma.org/newsroom/2013/sifma-amg-and-iaa-express-concerns-with-ofr-study-on-asset-managers-seek-withdrawal-of-the-study/.