US Regulator Sets February Deadline for BlackRock on Bank Stakes, Says Bloomberg
US Regulator Sets February Deadline for BlackRock on Bank Stakes, Says Bloomberg
The Federal Deposit Insurance Corporation has set a new deadline of February 10 for BlackRock to address an issue relating to oversight of the asset manager’s investments in banks regulated by the FDIC, as reported by Bloomberg News on Sunday, citing three sources familiar with the situation. If BlackRock does not make adequate progress in resolving these issues, the FDIC may initiate an investigation into the firm and request more information, according to the report.
The report indicates that this latest action by the FDIC came after BlackRock failed to meet the January 10 deadline. The FDIC chose not to comment, and BlackRock did not provide an immediate response to a request for comment on Sunday. BlackRock had requested the FDIC to extend its deadline for reaching an agreement on the agency’s oversight of the asset manager’s investments in FDIC-regulated banks to March 31, as stated in a letter the company sent to regulators on Thursday that was reviewed by Reuters. This letter reflects the ongoing negotiations between the FDIC and the leading managers of index-based mutual funds and exchange-traded funds regarding the regulations surrounding their passive investments in FDIC-regulated banks. In late December, Vanguard Investments successfully negotiated the terms of a similar passivity agreement with the FDIC, prompting BlackRock to finalize a similar deal by the January 10 deadline. BlackRock, Vanguard, and State Street hold approximately $26 trillion in assets. Following the financial crisis 2009, investors have increasingly invested in their low-cost index funds, elevating the three firms to significant ownership positions in most large U.S. corporations.
Source: Reuters
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