Much attention has been focused on the Financial Stability Oversight Council (“FSOC”) as it moves to issue final rules concerning the process by which it will designate nonbank financial companies as systemically impor-tant financial institutions (“SIFIs”) that will be subject to supervision by the Board of Governors of the Federal Reserve System (“FRB”). Both SIFIs and bank holding companies (“BHCs”) with assets of $50 billion or more (together “Covered Companies”) will be subject to enhanced prudential standards and early remediation requirements (“Enhanced Standards”) that will be implemented by the FRB. The FRB has issued a proposed rule regarding the Enhanced Standards (“Proposal”) which is open for comment until March 31, 2012.

The FSOC has not yet issued final rules regarding the designation of SIFIs. See DechertOnPoint FSOC Issues New Proposed SIFI Designation Rule. Even when final rules are issued, it is likely to be many months before the first designation of a SIFI is finalized. However, the FRB is acting now on the Enhanced Standards that would apply to a company that may in the future be designated as a SIFI. The Enhanced Standards are likely to have a significant impact on a company designated as a SIFI.

Please see full update below for more information.