SIFMA, Financial Services Forum suggest changes to Fed rule on banks

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The Securities Industry and Financial Markets Association (SIFMA) and the Financial Services Forum (FFS) weighed in on a proposal by the Federal Reserve Board to alter the rules about the control of a bank.

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The proposal says that if a company has control over a bank, the company generally becomes subject to the board’s rules and regulations. Further, the proposal would establish a comprehensive regulatory framework for control determinations and request comment on the framework.

In a letter to the Federal Reserve Board, SIFMA and FFS detailed how the proposal could be improved to ensure banks remain competitive and can meet their customers’ needs.

“The FRB should adjust the proposal to facilitate investments in emerging companies and technologies so that U.S. financial markets can remain at the forefront of global innovation in financial services,” the letter stated. “The priority issues we have addressed in this respect — adding flexibility regarding business relationships, allowing typical minority protective rights, and clarifying the treatment of equity — would ensure that banking organizations are able to partner with promising fintech firms and other emerging companies and adapt to evolving market conditions. In addition, the proposal should be adjusted to facilitate customer-driven capital markets and asset management transactions and businesses.”

Specifically, SIFMA and FFS officials say the proposal should be revised to facilitate investments in emerging companies and technologies. In addition, they say the rule changes should facilitate customer-driven capital markets and asset management transactions and businesses.

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