BlackRock, MSCI probed by lawmakers over China investments

BlackRock, MSCI probed by lawmakers over China investments
Congressional committee is investigating whether the asset managers facilitated investments into blacklisted firms.
AUG 02, 2023
By  Bloomberg

A US congressional committee is investigating BlackRock Inc. and MSCI Inc. for allegedly helping to facilitate American investment into Chinese companies that the government has blacklisted for human rights abuses and aiding the military.

The House Select Committee on the Chinese Communist Party demanded information by mid-August from BlackRock about the inclusion of Chinese companies in its mutual and other funds, according to a letter the panel sent on July 31 to BlackRock Chief Executive Officer Larry Fink. 

The panel identified companies that present national security risks, use or support forced labor or are affiliated with China’s military and security apparatus. The committee estimated that five BlackRock funds, for example, have more than $429 million invested in Chinese companies “against the interests of” the US.

“It is unconscionable for any US company to profit from investments that fuel the military advancement of America’s foremost foreign adversary and facilitate human rights abuses,” Representative Mike Gallagher, a Republican from Wisconsin, and Raja Krishnamoorthi, an Illinois Democrat, wrote in the letter. 

BlackRock said in an e-mailed statement that it is one of 16 asset managers offering US index funds investing in Chinese companies. 

“With all investments in China and markets around the world, BlackRock complies with all applicable US government laws,” the company said in a statement.

MSCI said in a statement that the company is reviewing the committee’s requests, which were first reported by the Wall Street Journal.

US officials are weighing new proposals to screen and possibly prohibit investment in China’s semiconductor, quantum-computing and artificial intelligence sectors, people familiar with the plans have said recently. China’s government said last month that it would respond to any new limitations on investment.

Latest News

Advisor moves: LPL and Raymond James add veteran advisors in California
Advisor moves: LPL and Raymond James add veteran advisors in California

LPL welcomes a Beverly Hills-based practice from Wedbush Securities as RayJay adds a Stifel alum to its employee advisor arm.

Is the SEC's private fund exemption rule about to change?
Is the SEC's private fund exemption rule about to change?

House bill seeks inflation-based adjustment to private fund advisor exemption.

Congress pushes to make fintech oversight offices permanent at SEC, CFTC
Congress pushes to make fintech oversight offices permanent at SEC, CFTC

A new House measure would enshrine FinHub and LabCFTC as permanent fixtures, deepening ties with financial technology sector.

CFP Board names Barry Gersten head technology officer
CFP Board names Barry Gersten head technology officer

The seasoned IT leader arrives as the credentialing body for CFP professionals considers AI's implications for the future of financial planning.

FINRA and advisors' other work
FINRA and advisors' other work

The brokerage industry regulator once again takes a stab at updating rules for independent brokers with other businesses and jobs

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave