Bank of New York Mellon has agreed to pay $3m in settling a state investigation into problems it faced in calculating net asset values on some 1,200 mutual funds last August, Massachusetts' top securities regulator said on Monday.
Reuters reports that Massachusetts Secretary of the Commonwealth William Galvin said the New York trust bank had subcontracted the calculations to a third party and lacked a backup plan when the sub-contractor was unable to calculate net asset values for the funds. The lack of the plan "represents a departure from high standards of commercial honor," the settlement agreement states, according to Galvin's office.
The glitch unsettled broad parts of the fund industry last summer and highlighted how reliant BNY Mellon remained on a patchwork of technology platforms.
The outage left BNY Mellon unable to calculate net asset values on the funds for about 66 clients by the close of trading on August 24, according to a statement by Galvin's office, which added that BNY Mellon has since improved its internal controls and supervisory procedures.
To access the complete Reuters article hit the link below: