Under the 2010 Dodd-Frank Act, regulators have the authority to apply tighter regulations on firms that pose a significant threat to the financial system-and they are doing just that with asset management firms.
According to a report by the Office of Financial Research released Monday, U.S. regulators are considering authorizing tougher regulation of asset management firms that oversee trillions of dollars.
Regulators are looking at how firms such as BlackRock Inc., Vanguard Group Inc., Fidelity Investments could create vulnerabilities in the financial system. The OFR's 34-page report did not examine how risky the top 20 asset management firms were.
The OFR noted in the report that the Financial Stability Oversight Council, which requested the report in April 2012, opted to "study the activities of asset management firms to better inform its analysis of whether - and how - to consider such firms for enhanced prudential standards and supervision."
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