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(Added company and industry history, paragraphs 4 and 6-8)
The Federal Deposit Insurance Corporation has given BlackRock BLK.N another deadline until Feb. 10 to resolve an issue over oversight of the asset manager’s investments in FDIC-regulated banking organizations, Bloomberg News reported Sunday , citing three people with knowledge of the matter.
The FDIC could open an investigation into BlackRock and demand more information from the company if it doesn’t make enough progress to resolve the problems, according to the report.
The FDIC’s decision follows a Jan. 10 deadline that BlackRock failed to meet, according to the report.
The FDIC declined to comment, while BlackRock did not immediately respond to a request for comment Sunday.
BlackRock has asked the FDIC to extend the deadline to March 31 to reach an agreement on how the agency would oversee the asset manager’s investments in FDIC-regulated banking organizations, according to a letter the company released. sent to regulators on Thursday and which Reuters was able to consult.
The letter is the latest step in a months-long standoff between the FDIC and the largest managers of index mutual funds and exchange-traded funds over the rules governing their passive investments in banks regulated by the FDIC.
In late December, Vanguard Investments outlined the terms of such a holdover agreement with the FDIC, which immediately required BlackRock to sign a similar agreement by the January 10 deadline.
BlackRock, Vanguard and State Street collectively control some $26 trillion in assets today. Since the 2009 financial crisis, investors have flocked to their low-cost index funds, catapulting the three companies to become the largest owners of most major U.S. companies.
