BNY Mellon hit by £126m fine for failing to keep client money safe
GIANT custody bank BNY Mellon is paying a £126m fine for failing to properly protect client funds, the Financial Conduct Authority (FCA) said yesterday.
BNY is the world’s largest custodian, responsible for keeping assets safe – but in fact, had the bank collapsed, clients’ funds may not have been entirely safe.
Regulators found the London branch and the international arm failed to meet the rules, failing to prevent the co-mingling of assets from a range of accounts. The bank also failed to meet new rules which came into force in 2011 and 2012, and did not meet governance standards.
“Had the firms become insolvent, the total value of safe custody assets at risk would have been significant,” said FCA enforcement boss Georgina Philippou. “This is compounded by the fact that the breaches took place at a time when there was considerable stress in the market.”
During the affected period, the London branch’s safe custody assets peaked at £1.3 trillion.
“BNY Mellon is very mindful of the importance of safeguarding client assets and has been trusted by its clients to do so for 230 years,” the bank said in a statement.
“This trust could not have been earned without robust regulatory compliance in all of our operating jurisdictions, and we regret in this case that we did not meet our standards or those of the FCA.”