Top SEC official raps U.S. risk council for seeking to grab power
By Sarah N. Lynch
WASHINGTON (Reuters) - A top U.S. Securities and Exchange Commission official on Thursday railed against the U.S. regulatory risk council for trying to grab the SEC's power in a "dangerous" quest to impose tougher rules on large asset managers.
SEC Republican Commissioner Daniel Gallagher vented his frustrations in a nine-page comment letter about the Financial Stability Oversight Council (FSOC) and its independent research arm, saying the FSOC is trying to impose bank-like rules on investment funds.
"I hereby register a vote of NO in the court of public opinion on the issue of whether to designate asset managers," Gallagher wrote.
"The FSOC process itself is far more dangerous to our financial markets than the purported risk factors it was purportedly created to address."
Gallagher's letter is unusual for an SEC commissioner, who typically does not submit formal comment letters on matters in which the SEC is soliciting public feedback.
On May 19, the FSOC will hold a public roundtable of industry experts and academics to review whether large fund managers such as BlackRock Inc and Fidelity pose systemic risks.
The FSOC, chaired by Treasury Secretary Jack Lew and made up of the heads of all financial regulators, can dub large financial firms as "systemic" and subject them to Fed oversight if it thinks they are too risky.
SEC Chair Mary Jo White, Federal Reserve Chair Janet Yellen and other regulators sit on the council. Board and commission members, such as Gallagher, are not FSOC members and do not get a vote in the designation process. Continued...