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Introduction (partial) "This document sets out, for public consultation, the proposed assessment methodologies for identifying NBNI G-SIFIs, extending the SIFI framework that currently covers banks and insurers to all other financial institutions. This is challenging as the high-level framework and specific methodologies have to capture a wide range of business models and risk profiles, while maintaining broad consistency with the methodologies for banks and insurers. Also, unlike banks and insurers, the NBNI financial entities generally face limitations in the data availability. While this document proposes specific methodologies for the identification of NBNI G-SIFIs, it does not propose any specific entities for designation, nor any policy measures that would apply to NBNI G-SIFIs. In a report to the G20 Leaders published in September 2013, the FSB explained that these steps will be taken at a later stage. In developing the methodologies, the FSB based its work on the following principles: (i) The overarching objective in developing the methodologies is to identify NBNI financial entities whose distress or disorderly failure, because of their size, complexity and systemic interconnectedness, would cause significant disruption to the global financial system and economic activity across jurisdictions; and (ii) The general framework for the methodologies should be broadly consistent with methodologies for identifying G-SIBs and G-SIIs, i.e. an indicator-based measurement approach where multiple indicators are selected to reflect the different aspects of what generates negative externalities and makes the distress or disorderly failure of a financial entity critical for the stability of the financial system (i.e. “impact factors” such as size, interconnectedness, and complexity). This document, first of all, explains how the financial distress or disorderly failure of an NBNI financial entity could be transmitted to other financial entities and markets, and thereby pose a threat to global financial stability (Section 1). It then sets out a high-level framework for identifying G-SIFIs and implementation approaches that will apply across all NBNI financial entities (Sections 2 and 3). This is followed by descriptions of detailed NBNI financial sector-specific methodologies (Sections 4-6) for (i) finance companies, (ii) market intermediaries (securities broker-dealers), and (iii) investment funds (including hedge funds). The FSB led the development of (i), while the development of (ii) and (iii) was led by IOSCO. Finally, there is a guiding methodology for assessing the global systemic importance of all other NBNI financial entities (or entity types) as a “backstop” to identify any potential G-SIFIs not captured by the above NBNI G-SIFI methodologies (Section 7)."

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