U.S. regulators to review BlackRock, Fidelity for risks
WASHINGTON Nov 5 (Reuters) - U.S. regulators will review whether asset managers including BlackRock Inc. and Fidelity Investments pose a potential risk to the financial system, Bloomberg News reported late Tuesday.
The decision by the Financial Stability Oversight Council to review the two firms does not mean it will necessarily designate them as systemically important, the newswire said.
The review follows a study the U.S. Treasury Department released in September that said some activities of asset managers could pose risks to the broader marketplace.
The FSOC, which called for the study, has been contemplating whether certain large, complex asset management firms should be designated as "systemically important financial institutions."
Last week the group held "an initial discussion" on the report.
Any firms given the systemic tag will face new capital requirements and oversight by the Federal Reserve in addition to any current regulations.
The FSOC is a council of regulators chaired by Treasury Secretary Jack Lew and comprised of the country's top financial regulators.
A Treasury Department representative declined comment.
"We believe that the asset management industry, and mutual funds in particular, do not present the types of risk that the FSOC was designed to address," Fidelity spokesman Vincent Loporchio said.
BlackRock did not immediately respond to a request for comment.