Rather, the minimum haircuts envisioned by the FSB would apply only to SFTs in which entities not subject to capital and liquidity regulation (e.g., hedge funds) receive financing from entities that are subject to regulation (i.e., banks and broker-dealers), and only to transactions in which the collateral is something other than government or agency securities.
In this sense, there is a close relationship between the FSB minimum-haircut proposal and the specific variant of the capital-surcharge idea that I mentioned a moment ago. Both have the potential to act as a restraint on those SFTs that are intermediated by regulated broker-dealer firms, but both are vulnerable to an evolution of the business away from this intermediated mode.