PEPPER HAMILTON, LLP – CLIENT ALERT
On April 3, 2012 at a public meeting, the Financial Stability Oversight Council (FSOC) finalized a rule that establishes a protocol for determining which non-bank financial companies (including private equity firms, insurance companies, and hedge funds) may be classified as a “systemically important financial institution” (SIFI).
The final rule was passed pursuant to Section 113 of the Dodd-Frank Act, which authorizes the FSOC to require a non-bank to be supervised by the Federal Reserve Board and be subject to prudential standards, if the FSOC determines that material financial distress at the SIFI could pose a threat to financial stability.