In a comment letter submitted to the Financial Stability Board (FSB) last week, the Investment Company Institute (ICI) praised the shift in focus undertaken by the FSB to concentrate on trends across the sector, rather than individual investment funds and asset managers.
“The latest work out of the FSB demonstrates an important evolution in its approach. By focusing on activities across the sector—rather than singling out individual funds or asset managers for possible SIFI designation—the FSB rightly recognizes that any reforms to mitigate potential risk must be broad based,” ICI President and CEO Paul Schott Stevens said. “We also applaud the FSB’s decision to charge IOSCO and national securities regulators with shaping those reforms.”
ICI also indicated its approval of increased entrustment of further work to securities regulators, whose skills and experiences afford them greater insight into risk evaluation in asset management, but called for the adoption of higher standards and rigorous reforms moving forward.
“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,” Stevens said. “Unfortunately, public comments on FSB’s work—including factual rebuttals of its conjectures—seem to have precious little impact on its deliberations.”