Last year, when the FSB proposed similar policies to those published on Thursday, BlackRock, Vanguard and Fidelity Investments praised the FSB for shifting its scrutiny of the industry to specific trading activities rather than the size or systemic importance of firms. The Investment Company Institute, an industry trade association, said on Thursday that there is “no basis for considering regulated funds and their managers” as systemically-important.
“We remain concerned that the FSB states an intent to return to its prior work on methodologies to identify global systemically important financial institutions outside of the banking and insurance sectors,” Paul Schott Stevens, president and chief executive of the ICI, said in a statement.
The ICI said regulators had made other changes that were helpful. The industry has opposed system-wide stress-testing, arguing that there are too many different types of funds for the tests to be valuable. On Thursday, the FSB that system-wide testing “is still at its exploratory stage.”
The FSB also said that pension and sovereign wealth funds could present threats to the financial system and that regulators would assess the industries further.
This article was provided by Bloomberg News.