By Suzanne McGee and Ross Kerber
(Reuters) – BlackRock (NYSE:) has asked the U.S. Federal Deposit Insurance Corp. to extend its deadline to reach an agreement on how the agency would oversee the giant asset manager's investments in U.S.-regulated banking organizations. FDIC from Friday through March 31, according to a letter the company sent to regulators on Thursday and obtained by Reuters.
The letter is the latest move in a months-long tug-of-war between the FDIC and the largest managers of index mutual funds and exchange-traded funds over the rules governing their passive investments at FDIC-regulated banks. In late December, Vanguard Investments negotiated the terms of that standstill agreement with the FDIC, which immediately thereafter asked BlackRock to sign a very similar agreement before a Friday deadline.
“We are not aware of any imminent or ongoing issues that would justify accelerating the completion of an entirely new regulatory framework over a two-week period,” Ben Tecmire, head of U.S. regulatory affairs at BlackRock, wrote in the letter to the FDIC.
This is especially true, he added, since “all banks that would be covered by its proposed deal with BlackRock are subject to the Federal Reserve's regulatory oversight.”
In the letter, Tecmire said BlackRock wants to avoid “inconsistent and uncertain requirements” that could result from the company's banking holdings being overseen by multiple banking regulators.
He said in the letter that BlackRock understands that the agreement between the FDIC and Vanguard was reached only after several months of negotiation. A person familiar with the matter said BlackRock's attempts in the final months of 2024 to meet with FDIC officials had been rebuffed.
The FDIC did not respond to a request for comment on the letter or the negotiations.
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