According to informed sources, the Federal Deposit Insurance Corporation (FDIC) has requested that asset management company BlackRock (BLK.US) accept an agreement by January 10, which will allow the agency to strengthen its review of investments in bank institutions under FDIC supervision.
The FDIC previously announced that it has reached an agreement with Vanguard to enhance oversight of the investment management giant, which holds a significant stake in large financial institutions in the U.S. The agreement grants the FDIC more power to monitor Vanguard's investment activities, aiming to ensure that the largest asset management companies, including Vanguard and BlackRock, do not influence the business decisions of the largest banks in the U.S., even if they hold substantial shares through index or passive investment funds. This is the latest development in a months-long tug-of-war between the FDIC and the two largest index mutual fund and exchange-traded fund management companies.
The FDIC is pushing both companies to adopt a &#34;passive agreement,&#34; which would provide regulators with more tools to supervise the compliance of asset management companies and commit to not influencing the business decisions of FDIC-regulated banks in which they invest.
Sources familiar with the negotiations between BlackRock and the FDIC stated that the company received the latest proposal from the regulator on Friday, less than an hour after the announcement of the Vanguard agreement. The source noted that the wording of the proposed agreement is &#34;essentially the same&#34; as that of the Vanguard agreement.
FDIC board member and Director of the Consumer Financial Protection Bureau (CFPB) Rohit Chopra stated in a statement released on Monday: &#34;We know that CEOs and board members of large companies closely monitor the policy statements of these large firms. If a large asset management company truly claims to be passive, then it should have no problem complying with the rules.&#34;
In a public comment submitted to the FDIC in October, BlackRock stated that it has made a legally binding commitment to the Federal Reserve to continue acting as a passive investor in the U.S. banking industry. BlackRock's head of regulatory affairs, Benjamin Tecmire, stated in the letter: &#34;BlackRock does not exercise control over FDIC-regulated institutions, nor does it seek to do so.&#34;
The FDIC has not specified what consequences may arise if BlackRock fails to comply by the January 10 deadline

The U.S. FDIC requires BlackRock to accept a regulatory agreement by January 10 to strengthen the review of its bank investments under FDIC supervision. This agreement aims to ensure that large asset management companies like BlackRock and Vanguard do not influence the business decisions of U.S. banks. The FDIC hopes to provide more regulatory tools through a "passive agreement" to ensure compliance. BlackRock has committed to continue as a passive investor to the Federal Reserve

- The FDIC has requested BlackRock to accept an agreement by January 10 that will enhance scrutiny of its investments in FDIC-regulated banks.  
- This follows a similar agreement with Vanguard, aimed at ensuring that major asset management firms do not influence the business decisions of the largest U.S. banks through significant shareholdings.  
- The proposed agreement is part of ongoing negotiations to implement a "passive agreement" that would provide the FDIC with more oversight tools, although consequences for non-compliance by BlackRock remain unspecified.