The U.S. banking regulator has given BlackRock a February deadline for bank stakes, Bloomberg reports
(Reuters) – The Federal Deposit Insurance Corporation has given BlackRock a new deadline of Feb. 10 to resolve a problem related to oversight of the asset manager’s investments in FDIC-regulated banking organizations, Bloomberg News reported on Sunday, citing three people with knowledge of the matter. .
The FDIC could open an investigation into BlackRock and request more information from the company if it does not make sufficient progress in resolving the issues, the report said.
The FDIC’s move followed a Jan. 10 deadline that BlackRock missed, according to the report.
The FDIC declined to comment, while BlackRock did not immediately respond to a request for comment on Sunday.
Ends: January 10th at 4:00:02 PM EST
BlackRock has asked the FDIC to extend its deadline to reach an agreement on how the agency will oversee the asset manager’s investments in FDIC-regulated banking organizations until March 31, according to a letter the company sent to regulators on Thursday, seen by Reuters had an insight.
The letter was the latest move in a months-long tussle between the FDIC and the largest managers of index-based mutual funds and exchange-traded funds over rules governing their passive investments in FDIC-regulated banks.
In late December, Vanguard Investments negotiated the terms of such a passive agreement with the FDIC, which immediately asked BlackRock to sign a similar agreement by a Jan. 10 deadline.
BlackRock, Vanguard and State Street now collectively control about $26 trillion in assets. Since the 2009 financial crisis, investors have poured money into their low-cost index funds, catapulting the three companies into the ranks of the largest owners of most major US corporations.
(Reporting by Gnaneshwar Rajan in Bengaluru Editing by Matthew Lewis)
