NEW YORK (Reuters) – The New York Federal Reserve released the fee structure and terms for its agreement to hire the asset management firm BlackRock to guide some of the central bank’s massive bond buying operations.
The New York Fed said earlier this week that it hired BlackRock to manage bond purchases and oversee certain liquidity facilities, including the secondary market corporate credit facility, which will purchase corporate bonds and exchange-traded funds.
Asset management fees paid to the firm will be tiered in breakpoints and will have a total fee cap. BlackRock will earn a quarterly fee equal to an annualized 2 basis points on the first $20 billion of assets under management, 1.25 basis points on the next $30 billion of assets and no fee for amounts above $50 billion under management.
BlackRock will not earn any other fees or income, including from securities lending, in connection with the facility’s purchase of exchange-traded funds.
(Reporting by Jonnelle Marte, Editing by Franklin Paul)
