On March 30, 2016, the U.S. District Court for the District of Columbia issued a sealed opinion striking down MetLife, Inc.’s designation by the Financial Stability Oversight Council (the “FSOC”) as systemically important.2 Under Section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the FSOC is authorized to determine that a nonbank financial company’s material financial distress, or the nature, scope, size, scale, concentration, interconnectedness, or mix of its activities, could pose a threat to U.S. financial stability. Such systemically important companies become subject to supervision by the Federal Reserve and to enhanced prudential standards. The Treasury Department is appealing the District Court’s MetLife decision to the U.S. Court of Appeals for the District of Columbia Circuit. 

To date, in addition to MetLife, the FSOC has designated American International Group, Inc., General Electric Capital Corporation, Inc. and Prudential Financial, Inc. as systemically important entities. With respect to asset management firms (as reported in our prior Investment Management Update), in December 2014, the FSOC issued a notice inviting public comment on whether certain asset management products and activities could pose potential risks to the U.S. financial system. At the November 2015 FSOC open meeting, a Treasury staff member stated that the Treasury staff expected, in the spring of 2016, to be in a position to enable the FSOC to provide a public update on FSOC’s review of asset management firms’ products and activities.