Today the Committee on Capital Markets Regulation submitted to the Financial Stability Oversight Council (FSOC) a comment letter on the December 2014 notice that seeks guidance on the relationship between asset management products/activities and systemic risk. The Committee supports the transition from an entity-based approach to products/activities-based approach, and points out that FSOC’s continuing focus on resolution is a holdover from the entity model. We express our belief that the resolution of an asset manager would not have an adverse effect on financial stability. We point out that asset manager resolution is straightforward, and that asset managers are frequently closed with no systemic consequences.
A PDF of the comment letter may be downloaded here.