Big four fund groups summoned to talks over size
BlackRock, Fidelity, Pimco and Vanguard were summoned to meet global regulators in London last week to discuss whether large asset managers should be considered as systemically important financial institutions (SIFIs).
Such classification would subject the four managers to much greater scrutiny and require costly changes to their operating models.
Similar proposals by US regulators have met stiff industry resistance. The influential former Congressman, Barney Frank, one of the main authors of US reform legislation after the financial crisis, has also expressed surprise that asset managers might be considered as SIFIs.
But the London meetings, which took place at the headquarters of the Financial Conduct Authority, suggest global regulators are determined to pursue reform.
A consultation process was started in January by the Financial Stability Board, the body that co-ordinates financial regulators, and the International Organisation of Securities Commissions (Iosco), the umbrella body for global market regulators.
Unlike US regulators, which are considering whether asset management groups should be considered as SIFIs, the FSB and Iosco are focusing on large funds, suggesting those with assets of more than $100bn should be assessed for their systemic importance.
Just 14 US funds exceed this threshold, including five Vanguard passive index funds and three money market funds.