Sifi status for funds could spark legal challenges
Regulators are preparing to label some mutual funds and hedge funds as systemically important – a tag that brings with it the possibility of heavy-handed intervention by bank supervisors. Buy-siders are already raising the prospect of legal retaliation. By Kris Devasabai
Speaking on the record, executives at large asset managers fret about plans to designate some large mutual funds and hedge funds as systemically important financial institutions (Sifis) – a badge that would expose them to the intrusive stewardship of the US Federal Reserve and other regulators.
Laura Merianos, a principal in the legal department at Vanguard in Philadelphia, says there is a danger of "serious conflicts". Kenneth Willman, chief legal officer at Russell Investments, warns Sifi
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