DUBLIN (Reuters) – Ireland’s central bank on Thursday fined Bank of New York Mellon Corp’s Irish fund administrating arm 10.8 million euros ($11.9 million) for 16 regulatory breaches compounded by the firm providing misleading information while under investigation.
It was the largest fine Ireland has ever handed down to a fund service provider. With just over 1.13 trillion euros in assets under administration, BNY Mellon Ireland is the second largest fund administrator in the country, which is a hub for the global funds industry.
Like other operators, BNY Mellon Fund Services (Ireland) provides fund administration or “back office” services on behalf of fund managers and investment funds in Ireland and around the world.
The regulator said the breaches arose due to BNY Mellon Ireland’s failure to comply with its regulatory obligations and have an adequate governance framework in place for these outsourcing activities that are integral to its operating model.
This undermined its ability to effectively identify and manage the risks associated with its outsourcing arrangements and created unnecessary potential risks to its clients, investors and the financial markets, the central bank said.
“The investigation found systemic weakness across its entire outsourcing framework. Despite intervention by the Central Bank over a number of years, BNY DAC (BNY Mellon Ireland) repeatedly failed to address these deficiencies,” Central Bank Director of Enforcement Seana Cunningham said in a statement
BNY Mellon Ireland, whose parent group is the world’s largest custodian bank, admitted to the 16 breaches, the first of which was identified in 2014, and has taken the necessary steps to rectify the deficiencies, the central bank said.
Its fine was reduced from 15.4 million euros in accordance with a settlement discount.
($1 = 0.9101 euros)
(Reporting by Padraic Halpin;Editing by Elaine Hardcastle)
