The SIFMA Asset Management Group ("SIFMA AMG") and the Investment Company Institute ("ICI") (collectively, the "Associations") offered comments on the Financial Stability Board's ("FSB") Proposed Policy Recommendations to Address Structural Vulnerabilities from Asset Management Activities. The Associations' recommendations addressed aspects of the FSB proposal concerning: (i) liquidity risk management and redemptions; (ii) leverage; (iii) operational risk; and (iv) securities lending activities.
The ICI called on the FSB to "consider formal adoption of more exacting principles and standards to enhance its processes." Moreover, the ICI generally urged the policy community "to step back and reexamine whether [the proposal's] hypotheses are consistent with empirical evidence." ICI President & CEO Paul Schott Stevens remarked that:
Since the FSB first began looking at asset management in 2014, ICI has provided extensive data, analysis, and commentary demonstrating that regulated funds and their managers do not pose risks to global financial stability. Unfortunately, public comments on FSB's work – including factual rebuttals of its conjectures – seem to have precious little impact on its deliberations.
SIFMA AMG urged the FSB to continue to view asset management as "unique" and not akin to the banking industry. The Association affirmed that asset management was "well-equipped to continue its track record for successfully meeting shareholder redemptions through normal and stress conditions without presenting a systemic risk to global financial stability."
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