FSOC Reproposes the Nonbank SIFI Designation Rule

December 22, 2011

On December 19, 2011, BNA’s Securities Regulation & Law Report published an article entitled, “FSOC Reproposes the Nonbank SIFI Designation Rule: A Revised Procedure, but No Greater Clarity Regarding Who Will be Designated or When.”

Co-authored by Cleary Gottlieb partner Derek Bush and associate Shara Chang, the article provides an overview of the three-stage process proposed by the Financial Stability Oversight Council (the “FSOC”) to determine which nonbank financial companies will be designated as systemically important, or “Nonbank SIFIs”.   Under Section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Nonbank SIFIs will be subject to prudential standards and supervision by the Board of Governors of the Federal Reserve System.  This article also highlights a number of open issues that will need to be addressed as the rule is finalized.

If you have any questions on the FSOC’s proposed approach to designating Nonbank SIFIs, please feel free to contact any of your regular contacts at the firm or any of our partners and counsel listed under Banking and Financial Institutions.