By Suzanne McGee and Ross Kerber
(Reuters) – BlackRock (NYSE:) has requested the U.S. Federal Deposit Insurance coverage Company to increase its deadline to succeed in an settlement on how the company would oversee the enormous asset supervisor’s investments in FDIC-regulated banking organizations from Friday till March 31, in accordance with a letter the agency despatched to regulators on Thursday and obtained by Reuters.
The letter is the most recent transfer in a months-long tug of battle between the FDIC and the largest managers of index-based mutual funds and exchange-traded funds over the foundations governing their passive investments in FDIC-regulated banks. In late December, Vanguard Investments hammered out phrases of such a passivity settlement with the FDIC, which instantly afterward requested BlackRock to signal a really related settlement by the Friday deadline.
“We aren’t conscious of any imminent or ongoing points that will warrant hastening the finalization of a very new regulatory framework in a two-week interval,” wrote Ben Tecmire, head of U.S. regulatory affairs at BlackRock, within the letter to the FDIC.
That’s very true, he added, since “all of the banks that will be lined by your proposed settlement with BlackRock are topic to regulatory oversight by the Federal Reserve.”
Within the letter, Tecmire stated BlackRock needs to keep away from “inconsistent and unsure necessities” which may end result from the agency’s financial institution holdings being overseen by a number of financial institution regulators.
He stated within the letter that BlackRock’s understanding is that the settlement between the FDIC and Vanguard was reached solely after a number of months of negotiation. A person aware of the matter stated BlackRock’s makes an attempt within the last months of 2024 to fulfill with FDIC officers had been rebuffed.
The FDIC didn’t reply to a request for touch upon the letter or the negotiations.
