BlackRock has been granted regulatory clearance to allow its funds to lend money to one another. The company said it would use the new capital to buy back shares from existing shareholders and pay dividends. BlackRock last year asked the regulatory agency to let the funds borrow cash from one another, for instance to meet a hypothetical spike in requests by clients to redeem shares. Other asset managers, including Vanguard and Fidelity, already have approval to engage in similar lending activities designed to assist managers to comply with mutual fund laws, requiring them to honour redemption requests within seven days.
BlackRock has been granted regulatory clearance to allow its funds to lend money to one another. The company said it would use the new capital to buy back shares from existing shareholders and pay dividends. Other asset managers, including Vanguard and Fidelity, already have approval to engage in similar lending activities designed to assist managers to comply with mutual fund laws, requiring them to honour redemption requests within seven days.