According to a Bloomberg report citing anonymous sources, the FDIC may launch an investigation and request additional information from BlackRock if sufficient progress is not made by this date.
The extension follows BlackRock’s failure to meet an earlier deadline of 10 January. BlackRock had requested the FDIC to extend its deadline to 31 March, as indicated in a letter the firm sent to regulators last week. The letter, seen by Reuters, reflects the asset manager's ongoing discussions with the FDIC to define the parameters of oversight regarding its passive investments in banking entities under the agency’s jurisdiction.
This development is part of broader efforts by the FDIC to formalize agreements with major asset managers over their passive stakes in FDIC-regulated banks. In December, Vanguard Investments finalized a passivity agreement with the FDIC, after which BlackRock was asked to sign a similar agreement by the initial January deadline.
These agreements aim to clarify the boundaries of asset managers' influence over banks in which they hold significant, though passive, investments. BlackRock, Vanguard, and State Street collectively manage around USD 26 trillion in assets, primarily through index-based mutual funds and exchange-traded funds.
Their influence as significant shareholders in many US corporations has grown substantially since the financial crisis of 2009, driven by increased investor demand for low-cost, diversified investment options.
The FDIC and BlackRock have not issued public statements about the situation. The FDIC declined to comment, while BlackRock has not responded to inquiries. The matter highlights ongoing tensions between regulatory oversight and the operations of large asset management firms in the financial sector.
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