As U.S. and foreign regulators consider applying stricter regulations to non-bank firms deemed critical to the stability of the economy, industry groups are warning that such a move could saddle the mutual fund and insurance sectors with ill-conceived, burdensome regulations, and potentially spill over to other players like broker-dealers.

Those fears got an airing Wednesday at a Senate Banking Committee hearing, where industry officials and several lawmakers expressed concerns about the process by which the Financial Stability Board, an international regulatory consortium, and the U.S.-based Financial Stability Oversight Council are evaluating firms for designation as systemically important financial institutions, or SIFIs.

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