- A special committee in the U.S. Congress announced a probe into the financial activities of BlackRock and MSCI.
- The firms are accused of funding blacklisted counterparties. It lists organizations suspected of cooperating with Chinese authorities and spying.
The U.S. House of Representatives Special Committee on the Communist Party of China announced investigations into the BlackRock Foundation and index provider MSCI. Authorities suspect the companies of funding firms on the sanctions list.
“It should be unacceptable for any U.S. counterparty to profit from investments that fuel the advancement of America’s primary foreign opponent and support attacks on human rights. This is the reason for our request,” the committee said in an official letter.
BlackRock CEO Lawrence Fink and MSCI CEO Henry Fernandez received the same treatment. The companies have been given until mid-August to provide all necessary information.
This includes:
- a complete list of indexes, Chinese companies and the positions they hold;
- factors and mechanism for selecting firms for targeted investments;
- all documentation, procedures and guidelines that relate to managing the risk of conflict of interest;
- complete information on each index held by the companies in question.
According to the committee, five BlackRock investment funds invested a total of $429 million in blacklisted Chinese companies. The lawmakers also identified about 40 counterparties that are listed in MSCI indexes and yet registered in the PRC.
In a statement to CNN, BlackRock commented:
“The majority of our clients’ investments in China are made through index funds. Our company is one of only 16 in the United States to provide these services. In doing so, BlackRock complies with all applicable U.S. laws. We will continue to engage with the Special Committee during the investigation.”
The MSCI limited itself to saying that management is aware of the investigation and will cooperate with authorities.
In mid-June 2023, the BlackRock fund filed an application with the SEC to register a spot bitcoin-ETF. The company’s CEO is confident that cryptocurrency has the potential to revolutionize the world of finance.
The firm also plans to enter the Indian market by forming a joint organization with service provider Jio Financial Services.
The firm also plans to enter the Indian market by forming a joint organization with service provider Jio Financial Services.