Financial Stability Oversight Council Approves Rule To Designate Nonbank Financial Companies For Enhanced Oversight, Help Prevent Future Financial Crises
With this vote, the Council will begin a three-stage designations process. Secretary Geithner, the chairperson of the Council, has indicated that the Council will work to make the first of these designations this year.
At its meeting today, the Council approved a final rule and interpretive guidance on the Council's authority to require supervision and regulation of certain nonbank financial companies; a final rule regarding the Freedom of Information Act; and the minutes of the Council's meeting on
Final Rule and Interpretive Guidance on the Authority to Require Supervision and Regulation of Certain Nonbank Financial Companies
Section 113 of the Dodd-Frank Act authorizes the Council to require a nonbank financial company to be supervised by the
Using this authority, the Council can subject nonbank financial companies to a system of enhanced prudential standards, requiring them to operate in a manner that poses less risk to the financial system. This authority is critical in helping to protect the financial system from future crises. Before the recent crisis, the largest, most interconnected nonbank financial companies were not subject to the type of regulation and consolidated supervision that applied to bank holding companies.
This rule and guidance are the product of nearly 18 months of public dialogue and cooperation among the Council's members and their agencies and outline a robust process for reviewing nonbank financial companies. The rule and guidance provide companies with necessary clarity regarding the key factors the Council will assess but do not hinder the flexibility necessary for an effective evaluation of risks to the U.S. financial system. An advance notice of proposed rulemaking (ANPR) on determinations regarding nonbank financial companies was approved at the Council's
Final Rule Regarding the Freedom of Information Act The final rule, as approved by the Council today, is available at www.fsoc.gov.
Minutes from the Council's
In attendance at the Council meeting were:
For more information about each member agency's financial reform implementation efforts, please follow the links below.
Nonbank Financial Company Designations Final Rule and Interpretive Guidance
Fact Sheet http://www.treasury.gov/press-center/press- releases/Documents/Nonbank%20Financial%20Company%20Designations%20Final%20Rul e%20and%20Interpretive%20Guidance%20Fact%20Sheet.pdf
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