meta_id 3003090

On March 25, 2026, the Financial Stability Oversight Council (FSOC) voted unanimously to issue proposed interpretative guidance on nonbank financial company designations for public comment. The guidance reintroduces elements from the Council's 2019 interpretive guidance while incorporating enhancements reflecting the Council's current understanding of financial stability risks. The proposed guidance establishes four key priorities. First, it incorporates economic growth and economic security into the Council's analysis of risks to financial stability, recognising that economic growth provides the foundation for financial stability and that economic security supports economic growth. Second, it prioritises an activities-based approach to identifying, assessing, and addressing potential risks to U.S. financial stability, with entity-specific designations pursued only when risks cannot be adequately addressed through activities-based measures. Third, it enhances analytical rigor by requiring the Council to perform a cost-benefit analysis before designating any nonbank financial company, making a designation only if expected benefits justify expected costs. The Council will also assess the likelihood of material financial distress as part of this analysis. Fourth, the guidance provides a pre-designation "off-ramp" and promotes greater transparency by identifying steps nonbank financial companies or financial regulators could take to address potential threats to financial stability, allowing time for material risks to be mitigated before formal designation. The proposed guidance is available for a 45-day public comment period following its publication in the Federal Register. Comments can be submitted during this period, with the full text of the proposed guidance accessible through the U.S. Department of the Treasury website. **References:** U.S. Department of the Treasury. (2026, March 25). Financial Stability Oversight Council Issues Proposed Guidance on Nonbank Financial Company Designations. Retrieved from https://home.treasury.gov/news/press-releases/jy2570