FSOC Issues Final Rule on Nonbank Financial Companies

The Financial Stability Oversight Council issued a final rule on Authority to Require Supervision and Regulation of Certain Nonbank Financial Companies.( Download Nonbank Designations - Final Rule and Guidance[1])  Section 113 of the Dodd-Frank Act authorizes the Financial Stability Oversight 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 final rule and the interpretive guidance attached as an appendix describe the manner in which the Council intends to apply the statutory standards and considerations, and the processes and procedures that the Council intends to follow, in making determinations under section 113 of the Dodd-Frank Act.