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U.S. Regulators Rethink Non-bank Entities to Designate Who is Systemic

Investment Executive | James Langton | Apr 25, 2023

Systemic risk dominoes financial system - U.S. Regulators Rethink Non-bank Entities to Designate Who is Systemic

According to Fitch credit rating agency, Hedge funds, asset managers and even crypto firms face increased oversight

  • Rating agency highlights FSOC's recent proposals aimed at bolstering market resilience through expanded regulatory oversight. Non-bank entities, including broker-dealers, insurers, and infrastructure firms, may be designated as systemically important, leading to increased capital requirements and compliance costs.
  • These changes could reshape firms' product offerings, business lines, and market competition.
  • Large, leveraged hedge funds may face additional scrutiny due to their potential systemic risks.
  • The debate around investment managers' systemic implications may resurface, while the crypto sector could be subject to further regulatory examination after recent bankruptcies and market stress.

See:  Speech by OSFI Superintendent Peter Routledge: Looming risks and long-term resilience

Report said:

Certain large and leveraged hedge funds could attract greater regulatory scrutiny given their potential to pose broader systemic risk in times of market stress

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NCFA Jan 2018 resize - U.S. Regulators Rethink Non-bank Entities to Designate Who is SystemicThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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