Treasury's Third Report on Financial System Regulation Focuses on the Asset Management and Insurance Industries

March 09, 2018
The Banking Law Journal

The U.S. Department of the Treasury (“Treasury”) recently released a report examining the regulatory framework for the asset management and insurance industries (“Report”). The Report is the third in a series of four reports that Treasury has undertaken in response to Executive Order 13772, which sets forth seven core principles for financial services regulation. Each report focuses on different segments of the financial services industry and examines the current regulatory framework, with the goal of identifying areas out of alignment with the core principles and making recommendations to align these areas.

The Report includes several recommendations for legislative and regulatory action in the asset management and insurance industries. Treasury believes these actions will lead to enhanced systemic risk management, more efficient regulation, strengthened U.S. engagement in international regulation, eco­nomic growth, and more informed investors. However, it is unclear what effect the Report and Treasury’s legislative and regulatory recommendations will have, if any, given the current practical requirement to obtain 60 votes to move legislation in the Senate (which would require bipartisan support) and the status of the Securities and Exchange Commission (“SEC”) and the Commod­ity Futures Trading Commission (“CFTC”) as independent regulatory agencies.

Although the Report includes recommendations related to insurance regu­lation generally, this article focuses on Treasury’s recommendations in the Report that are related to the asset management industry.

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