v3.19.3.a.u2
Net Capital Requirements
 12 Months Ended
Dec. 31, 2019
Regulatory Capital Requirements [Abstract]  
Net Capital Requirements

21. Net Capital Requirements

The Company is required to maintain net capital in certain regulated subsidiaries within a number of jurisdictions, which is partially maintained by retaining cash and cash equivalent investments in those subsidiaries or jurisdictions. As a result, such subsidiaries of the Company may be restricted in their ability to transfer cash between different jurisdictions and to their parents. Additionally, transfers of cash between international jurisdictions may have adverse tax consequences that could discourage such transfers.

Banking Regulatory Requirements. BTC, a wholly owned subsidiary of the Company, is chartered as a national bank whose powers are limited to trust and other fiduciary activities and which is subject to regulatory capital requirements administered by the Office of the Comptroller of the Currency. Federal banking regulators would be required to take certain actions and permitted to take other actions in the event of BTC’s failure to meet minimum capital requirements that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.  

Quantitative measures established by regulators to ensure capital adequacy require BTC to maintain a minimum Common Equity Tier 1 capital and Tier 1 leverage ratio, as well as Tier 1 and total risk-based capital ratios. Based on BTC’s calculations as of December 31, 2019 and 2018, it exceeded the applicable capital adequacy requirements.

 

 

 

Actual

 

 

For Capital

Adequacy

Purposes

 

 

To Be Well

Capitalized

Under Prompt

Corrective Action

Provisions

 

(in millions)

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital (to risk weighted assets)

 

$

686

 

 

 

137.7

%

 

$

40

 

 

 

8.0

%

 

$

50

 

 

 

10.0

%

Common Equity Tier 1 capital (to risk weighted assets)

 

$

686

 

 

 

137.7

%

 

$

22

 

 

 

4.5

%

 

$

32

 

 

 

6.5

%

Tier 1 capital (to risk weighted assets)

 

$

686

 

 

 

137.7

%

 

$

30

 

 

 

6.0

%

 

$

40

 

 

 

8.0

%

Tier 1 capital (to average assets)

 

$

686

 

 

 

72.8

%

 

$

38

 

 

 

4.0

%

 

$

47

 

 

 

5.0

%

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital (to risk weighted assets)

 

$

572

 

 

 

131.1

%

 

$

35

 

 

 

8.0

%

 

$

44

 

 

 

10.0

%

Common Equity Tier 1 capital (to risk weighted assets)

 

$

572

 

 

 

131.1

%

 

$

20

 

 

 

4.5

%

 

$

28

 

 

 

6.5

%

Tier 1 capital (to risk weighted assets)

 

$

572

 

 

 

131.1

%

 

$

26

 

 

 

6.0

%

 

$

35

 

 

 

8.0

%

Tier 1 capital (to average assets)

 

$

572

 

 

 

58.0

%

 

$

39

 

 

 

4.0

%

 

$

49

 

 

 

5.0

%

 

Broker-dealers. BlackRock Investments, LLC and BlackRock Execution Services are registered broker-dealers and wholly owned subsidiaries of BlackRock that are subject to the Uniform Net Capital requirements under the Securities Exchange Act of 1934, which requires maintenance of certain minimum net capital levels.

Capital Requirements. At December 31, 2019 and 2018, the Company was required to maintain approximately $1.9 billion and $1.8 billion, respectively, in net capital in certain regulated subsidiaries, including BTC, entities regulated by the Financial Conduct Authority and Prudential Regulation Authority in the United Kingdom, and the Company’s broker-dealers. The Company was in compliance with all applicable regulatory net capital requirements.