Comment Letter on Proposed Rulemaking for Systemically Significant Institutions

February 25, 2011

From: MFA, Richard Baker


Treasury Secretary Timothy Geithner, Financial Stability Oversight Council
Sheila Blair, FDIC
Ben Bernanke, Federal Reserve System; Edward DeMarco, Federal Housing Agency; Gary Gensler, CFTC; Debbie Matz, National Credit Union Administration; Mary Schapiro, SEC; John Walsh, Comptroller of the Currency

MFA submitted a letter to the Financial Stability Oversight Council in response to the Councils proposed rule regarding the criteria to designate systemically significant nonbank financial institutions. In our letter, we made the following points: (i) in light of the six categories of criteria proposed by the Council, we believe it is unlikely that any hedge fund is systemically significant; (ii) we urge the Council to publish for public review and comment the metrics and weightings it will use to analyze the statutory criteria; (iii) we urge the Council to have regular discussions with market participants prior to beginning a formal designation process; and (iv) we encourage the Council members to consult and coordinate with each other, particularly with respect to data collection.