The Dodd-Frank Act authorized the Council to issue rules regarding the FSOC's Authority to Require Supervision and Regulation of Certain Nonbank Financial Companies, Authority to Designate Financial Market Utilities as Systematically Important, and Implementation of the Freedom of Information Act.
The Council provided notice and sought public comment on each of these rulemakings before issuing the final rules described below. As Chairperson of the Council, the Treasury Secretary is also required to coordinate two other major rulemakings under the Dodd-Frank Act, the joint rulemaking on credit risk retention for asset-backed securities and the issuance of final regulations implementing the Volcker Rule.
FINAL RULES AND GUIDANCE
Section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act authorizes the Council to determine that a nonbank financial company shall be supervised by the Board of Governors of the Federal Reserve System and shall be subject to prudential standards, in accordance with Title I of the Dodd-Frank Act, if the Council determines that material financial distress at the nonbank financial company, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the nonbank financial company, could pose a threat to the financial stability of the United States. This interpretive guidance describes the process the Financial Stability Oversight Council intends to undertake in determining whether to subject a nonbank financial company to prudential standards and supervision by the Board of Governors of the Federal Reserve System under section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The Council’s Analytic Framework for Financial Stability Risk Identification, Assessment, and Response describes the approach the Council expects to take in identifying, assessing, and responding to certain potential risks to U.S. financial stability.
On November 16, 2017, the FSOC adopted a final rule making revisions to the FSOC’s regulations under the Freedom of Information Act as required by the FOIA Improvement Act of 2016.
Section 804 of the Dodd-Frank Act gives the Council the authority to designate as systemically important a Financial Market Utility (FMU) if the Council determines that its failure or a disruption to its operations could create or increase the risk of significant liquidity or credit problems spreading among financial institutions or markets and thereby threaten the stability of the U.S. financial system. An FMU designated by the Council as systemically important would become subject to the requirements of Title VIII of the Dodd-Frank Act, including risk management standards and additional examinations.”
On March 6, 2019, the Council adopted a final rule that will require the Council to seek public comment before adopting any future amendments to its nonbank financial company designations guidance.