“WASHINGTON—Senior U.S. officials are clashing over whether the asset-management industry poses risks to the financial system, setting up a fight over whether the industry should face tougher oversight.

“Officials at the Securities and Exchange Commission, which currently regulates asset managers, have pushed back against a powerful yet little-known Treasury Department office that is laying the groundwork for Federal Reserve oversight of companies like Fidelity Investments and BlackRock Inc. 

“The regulatory battle, described by people familiar with the situation, could complicate Washington’s efforts to rein in nonbank financial companies that regulators believe pose risks to the broader financial system.

“The SEC sits on a council of top regulators that must determine whether financial firms like asset managers are “systemically important” and should be drawn in for Fed oversight.”

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