On 29 May 2015, ALFI responded to the second FSB and IOSCO consultation on “Assessment methodologies for identifying non-bank non-insurer global systemically important financial institutions (NBNI G-SIFIs)”.
ALFI is of the view that highly regulated funds such as UCITS or regulated Alternative Investment Funds that comply with detailed diversification rules and are not highly leveraged are not systemically important and do not cause systemic risk. Moreover, ALFI believes asset managers are not a source of systemic risk. Managers are not the counterparty to trades they conduct on behalf of their clients (agency model). It is worth noting that many funds and asset managers exit the business every year, without giving rise to systemic risk.
As further explained in the response, ALFI considers it more appropriate to focus on market activities, such as the use of high leverage and derivatives that may cause systemic risk to the financial system.