Home Financial Stability Resource Center
The fund industry plays an important role in Americans’ investment and savings, managing more than $18 trillion through mutual funds, exchange-traded funds, closed-end funds, and unit investment trusts.
Asset management is an agency business. This means that firms manage, but do not own, the assets that they invest on behalf of funds or other clients. Asset managers generally decide where and how to invest assets on behalf of their investors—but any profits or losses belong to the investors, not the manager. As regulators in the United States and around the world discuss systemic risk and consider imposing new regulations on asset managers that could ultimately be paid for by fund investors, this is an important distinction for policymakers and the public to understand.
Among those regulators is the Financial Stability Oversight Council (FSOC), which is charged with identifying and monitoring potential risks posed by “large, interconnected bank holding companies or nonbank financial companies” to the US financial system. FSOC has been examining the asset management industry to determine if—and, if so, how—any asset management firms should be designated as systemically important financial institutions, or SIFIs. This designation would subject firms to enhanced supervision and bank-style regulation, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010—regulation that would be inappropriate, unnecessary, and costly to capital markets and the American savers who rely on them.
Regulated funds also face the possibility of inappropriate and costly regulation from international regulators, including the Financial Stability Board (FSB)—a global group of regulators dominated by central bankers that is examining regulated funds for possible designation as global SIFIs. If US regulators were to follow a recommendation by the FSB to designate any funds or their managers as SIFIs, US savers would pay the costs as these funds—already regulated by the Securities and Exchange Commission—came under an additional and unnecessary layer of bank-style regulation from the Federal Reserve.
ICI and its members remain committed to the promotion of financial stability; to sensible, deliberate, and data-driven regulation; and to advancing the public understanding of mutual funds and the key role they play in the financial system. This resource center contains the latest news, analysis, and resources from ICI and others on the regulatory developments around financial stability and the asset management industry.
ICI Viewpoints Blog
- Matching Models to Reality: Bond Market Investors Don’t Follow the “First-Mover” ScriptJul 18, 2016
- Matching Models to Reality: In a Falling Market, the Real “Movers” May Be...the BuyersJul 15, 2016
- Matching Models to Reality: The Real-World Challenges to Regulators’ “First-Mover” HypothesisJul 14, 2016
- Matching Models to Reality: Doomsayers Are Disappointed—Again—as Funds Weather Brexit ShockJul 13, 2016
- The Liquidity Provided by ETFs Is No MirageJun 20, 2016
- ICI Credits FSB’s Focus on Asset Management Activities and Delegation to Securities Regulators
Sep 21, 2016
- FSOC Lacks Evidence That Mutual Funds’ Liquidity, Redemptions Raise Financial Stability Concerns
Jul 18, 2016
- ICI Responds to Financial Stability Board Report
Jun 22, 2016
- ICI Responds to FSOC Report
Apr 18, 2016
- House Committee Passes Critical Changes to SIFI Designation Process
Nov 4, 2015
Speeches and Statements
- Opinion: A MetLife Victory Won't Solve FSOC's Biggest Problems, American BankerJun 13, 2016
- ICI Letter Supporting H.R. 1550, the Financial Stability Oversight Council Improvement Act (pdf)
Oct 30, 2015
- Oral Testimony for Senate Hearing: "The Role of the Financial Stability Board in the U.S. Regulatory Framework"
Jul 8, 2015
- ICI Statement for Senate Hearing: "The Role of the Financial Stability Board in the U.S. Regulatory Framework" (pdf)
Jul 8, 2015
- ICI Letter to Secretary Lew, Chair Yellen, and Chair White Expressing Concern About the FSB's Consultation (pdf)
May 28, 2015