If you are a regular follower of our Financial Services update, you are well aware of our devil-in-the-details mantra for the implementation of the Dodd-Frank Act. This week, there are a couple of items that bear mention and a bit of refreshing our collective recollection.

Shortly, the Financial Stability Oversight Council ("FSOC") will be releasing its views for review and comments on what "systemically important" means within the context of the Dodd-Frank Act. This designation is important, since a firm (financial and non-financial institutions) labeled "systemically important" will be subject to a heightened level of scrutiny and supervision.

To refresh our recollection, we need to recall that the FSOC is a 10-member council of regulators comprised of: Secretary of the Treasury (Chair), Chairman of the Federal Reserve Board, Comptroller of the Currency, Director of the new Bureau of Consumer Financial Protection, Chairman of the SEC, Chairperson of the FDIC, Chairperson of the CFTC , Director of FHFA (the GSE oversight agency), Chairman of NCUA, and an insurance expert.

The FSOC's reason for existence, you may recall, is to: identify risks to financial stability; eliminate expectations that the federal government will shield creditors and counterparties from losses; and to respond to emerging threats to the stability of our financial system.

In order to discharge these duties, the FSOC will: collect information; direct the new Office of Financial Research; monitor the financial services marketplace; monitor domestic and international financial regulatory proposals, including accounting issues; facilitate coordination among agencies; recommend to member agencies general supervisory priorities; require Federal Reserve Board supervision of systemically significant nonbank financial companies; recommend prudential standards for such companies; identify such firms; recommend new standards; and review accounting principles.

A word about the Office of Financial Research ("OFR"). Under the Dodd-Frank Act, the OFR may submit information to the FSOC, and the FSOC will act through the OFR to require submission of reports from any nonbank financial company and bank holding company. The OFR will be headed by a director (with a six-year term) appointed by the President, and pay rates for OFR employees will not be the usual government pay rates. The OFR will have rulemaking authority and subpoena power, and will possess authority to make direct reports to Congress.

The OFR will have a data center that is designed under the Dodd-Frank Act to prepare and publish financial company reference and instrument reference databases, and to provide "certain data" to the public to increase market transparency and facilitate research on the financial system.

The OFR will also have a research and analysis center that is designed under the Dodd-Frank Act to develop metrics and reporting systems for risks to financial stability; monitor and report (to the FSOC and Congress) on changes in system-wide risk levels and patterns; to conduct research to improve financial regulation; and to evaluate stress tests.

Just a few things to remember as you are reviewing the proposed rule. We will be preparing a specific client briefing on the proposed rule when it is issued, and your Winston & Strawn contact can also assist you if you have questions about the FSOC or the OFR and their potential effect on your business.