Financial Stability Oversight Counsel

Federal District Court Rules against Designation of MetLife as a “SIFI” under Dodd-Frank Act

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On March 30, the D.C. federal District Court ruled against the designation by the Financial Stability Oversight Counsel (“FSOC”) of MetLife as a “systemically important financial institution” under the Dodd-Frank Act.  The FSOC has designated just four non-banks as SIFIs, but MetLife was the only one to file a lawsuit protesting it.

The overall impact of the ruling remains unclear, however, because it is under based on longstanding concerns about the protection of the firm’s proprietary business information and it widely anticipated that the FSOC will appeal the ruling.

Federal Reserve Board Seeks Public Comment on the Application of Enhanced Prudential Standards to General Electric Capital Corporation

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On November 25, the Federal Reserve Board (the “Board”) released proposed enhanced prudential standards and reporting requirements to be applied to General Electric Capital Corporation (“GECC”) and requested public comment on the application thereof.  GECC is designated by the Financial Stability Oversight Counsel as a non-bank systemically important financial institution that needs to be supervised by the Board and be subject to enhanced prudential standards similar to those applicable to certain bank holding companies.  Release.

SEC Proposed Rule on Systemic Risk Reporting

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On January 26, the SEC proposed a rule that would implement Sections 404 and 406 of the Dodd-Frank Act by requiring registered advisers to hedge funds and other private funds to periodically report information to the Financial Stability Oversight Counsel to use in monitoring risk to the U.S. financial system. Comments to the proposed rule must be submitted within 60 days of publication in the Federal Register. SEC Release.