Mutual Funds Could Avoid Fed Stress TestsBy
Mutual funds are probably the major sector within the asset manager category that will theoretically be a little freer to invest in company stocks and bonds if the Senate passes the Alleviating Stress Test Burdens to Help Investors Act (H.R. 4566), which the House passed by a vote of 395-19 on March 30, 2018.
It exempts nonbank financial institutions not under supervision by the Federal Reserve from the stress-testing requirements of the Dodd-Frank Act of 2010. Dodd-Frank applied stress tests to bank holding companies with total consolidated assets of $50 billion or more and nonbank financial companies designated by the Financial Stability Oversight Council for heightened prudential supervision by the Federal Reserve. The bill addresses the latter category of affected asset managers.