Is the FSB's plan to determine whether asset managers in the mutual fund business "fundamentally flawed?" It is according to Fidelity's
In its public comment reported
, Fidelity's comment said the Financial Stability Board's plan is "out of step with other regulators, academics and industry experts."
While the FSB and FSOC and "too-big-to-fail" are terms one heard frequently at the ICI's recent GMM and sees covered in the major papers, there is a different question for most fund firms: does the issue really matter for typical fund firm?
From a competitive perspective, the rules would put the largest U.S. asset managers on the same playing field as the world's major banks. Unfortunately it would do so by hobbling the fund without materially protecting or helping fund shareholders.
Of course, smaller fund shops, those unaffiliated with banks and boutiques would remain unhobbled. That may make the European driven rules a good thing for most fund firms that have to compete with the behemoths. But you won't hear that analysis from the ICI (or the SEC).
Finally, anyone looking to read more about the issue should head over to SEC Commissioner Michael Piwowar speech
at the ICI's Mutual Funds and Investment Management Conference last March.
Sean Hanna, Editor in Chief
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