The Federal Reserve Board approved the final rule that outlines the standard regulators will use to determine if a nonbank is systemically important.
"Under the Dodd-Frank Act, the Financial Stability Oversight Council can subject a nonbank to Fed supervision if it determines its activities are financial in nature and pose a risk to the economy," writes American Banker's Rob Blackwell.
The rule says a nonbank is considered to be "engaged in financial activities" if 85% or more of its revenues or assets are financial in nature under the Bank Holding Company Act.
"We see this as removing a hurdle to the Financial Stability Oversight Council designating nonbank financial firms as systemically significant," wrote Jaret Seiberg, an analyst with Guggenheim Partners.
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