Nov. 6 (Bloomberg) — A panel of regulators is taking a first step to focus on risky practices of the asset management industry rather than singling out firms such as BlackRock Inc. and Fidelity Investments for stricter oversight.

The Financial Stability Oversight Council is planning to solicit views from the industry and the public on which asset management activities could threaten the financial system, according to two people with knowledge of the matter.

The request marks a new approach by the council, led by Treasury Secretary Jacob J. Lew, to examine areas such as investments in hard-to-sell assets instead of deeming the companies systemically important. It's also the strongest sign yet that a four-year lobbying campaign by the largest asset managers to avoid heightened federal scrutiny is succeeding.

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Staffers from agencies that make up the council, including the Treasury Department, Federal Reserve, Securities and Exchange Commission and Federal Deposit Insurance Corp., have been working on the request for comment, said the people, who asked not to be identified because the information isn't public. The solicitation could be published in the Federal Register in the next few months, they said.

Financial firms designated by the FSOC are put under Fed supervision and can be subjected to stricter capital, leverage and liquidity requirements.

After initially considering BlackRock and Fidelity for greater oversight in October 2013, the FSOC, under pressure from the industry and Congress, slowed its deliberations on individual asset managers.

Analyzing risks

Treasury spokeswoman Suzanne Elio referred to minutes from the FSOC's Oct. 6 meeting, when the council discussed potential areas of focus and risks in asset management and possible ways to seek input and evaluate information. She declined to elaborate.

The largest U.S. asset managers have campaigned against systemic-risk designations since shortly after the council was created in 2010. The industry's lobbying included meetings with officials from FSOC member agencies and briefings to both Democrats and Republicans in Congress.

The opposition intensified when the Treasury's Office of Financial Research published a study in September 2013 warning that the largest asset firms could disrupt financial markets by "herding" investors seeking higher returns. The report also said exchange-traded funds could "amplify financial shocks" by pooling assets into illiquid investments.

Political pressure

In July, Representatives Dennis Ross, a Florida Republican, and John Delaney, a Maryland Democrat, introduced the first bipartisan bill calling for FSOC to lift some of its secrecy. The legislation would require that the council give companies earlier notice that they could be designated systemically important.

FSOC's focus on asset managers is part of the government's effort under the 2010 Dodd-Frank Act to bolster oversight of the financial system and avoid a repeat of the chaos that stemmed from the failure of Lehman Brothers Holdings Inc. in 2008.

Asset managers, which are now overseen by the SEC, argue that they differ from banks because their funds aren't backed by U.S. government guarantees and fund companies don't make big trades with their own assets. Clients also direct their own investments and can withdraw them at any time.

David Hirschmann, president of the U.S. Chamber of Commerce's Center for Capital Markets competitiveness, said FSOC's request for comment would be embraced by financial firms.

'Inclusive' debates

"If they do that it would be a welcome step," said Hirschmann, whose center has been at the forefront of pushing the council to make its processes more open. "We want these debates to be as data driven and inclusive as possible."

Seeking a request for comment doesn't necessarily mean the council will take any action. It also doesn't eliminate the possibility that the council could eventually designate an asset firm systemically important.

Separately, the FSOC will meet with industry groups and consumer advocates on Nov. 12 to address concerns that the council needs to be more transparent. Among those scheduled to attend are the Securities Industry and Financial Markets Association, according to people with knowledge of the meeting.

The council has designated as systemically important General Electric Co.'s finance unit as well as insurers American International Group Inc. and Prudential Financial Inc.

The council has also proposed naming MetLife Inc. MetLife challenged the decision and made its case to the council on Nov. 3. The FSOC has 60 days to decide whether to confirm its proposed designation. If it does, MetLife can appeal the decision in court.

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