In a recent letter, Senator Mark Warner, one of the authors of Title I and Title II of Dodd-Frank, urged that any SIFI designation of an asset manager “should follow a rigorous and transparent process, using reliable data, so that regulators and the marketplace can be armed with the best information possible.” With respect to data gathering, he encouraged the FSOC and OFR to review comments the SEC received from the public on the OFR Report, take advantage of the FSOC’s May 19 conference on the asset management industry, and directly engage with the industry
Citing a Wall Street Journal article from April that indicated that the FSOC had advanced to step 2 of a three step designation process, Senator Warner concluded that size could be “the only basis for that decision.” Unlike banks, the letter reminded Secretary Lew that Congress “believed an institution’s potential for system risk should be evaluated through the lens of its size, activities, complexity, interconnectedness, and global/cross-border activity, inter alia.” He stated that “size alone should not be dispositive.”