FSOC to Give Earlier Notice in SIFI Designation Process
Recognized as a positive step towards increasing transparency during the systemically important financial institutions (SIFI) designation process, the Financial Stability Oversight Council (“FSOC”) will give financial companies an earlier notice when under consideration for tougher regulatory supervision by the Federal Reserve. Approved on February 4th, the FSOC’s decision is in response to criticism over non-bank companies unfairly receiving the designation under a process created by the Dodd-Frank Act.
The decision also changes the FSOC’s policy of informing prospective SIFI designees at three-part review process’ final stage. Instead, financial institutions will now be notified in the second phase of the review process. Additionally, the FSOC will make efforts to improve information exchanged with reviewed companies, strengthen communications during yearly reevaluations, and offer the public more data.
For more on the SIFI designation process, reach out to the experienced professionals of our Firm’s Financial Services Group.