It’s been a hellish seven days for BNY Mellon, but the financial institution may be finally starting to put a high-profile technology failure behind it.
The bank’s systems for calculating net asset values are back to normal after a glitch in a SunGard accounting system caused mayhem last week. The custody bank said it is working to ensure a similar failure does not reoccur.
At 7 p.m. Eastern time on Monday, BNY Mellon said on its website that it was in the process of producing system-generated net asset values for all mutual funds and exchange-traded funds for that day, and the firm aimed to finish processing by 1 a.m. Tuesday. BNY Mellon said it would provide individual clients with NAVs on a rolling basis as they are completed.
Earlier on Monday, the firm said that it had completed production of all system-generated NAVs for ETF and mutual fund clients through last Friday.
The glitch in SunGard’s system, which SunGard hosts and supports for BNY Mellon’s asset servicing business, occurred as SunGard was conducting an operating system change for BNY Mellon’s U.S. instance of InvestOne on Saturday, Aug. 22.
The breakdown of the accounting system that calculates the prices of mutual funds and ETFs led to confusion among investors.
According to The Financial Times, the affected fund companies, such as Federated Investors, Guggenheim Partners, and Prudential Financial, will have to compare the final numbers generated by SunGard with the alternatively calculated NAVs used to process investments and withdrawals last week and adjust customer balances accordingly.
In a conference call Sunday night, BNY Mellon’s chief executive Gerald Hassell said the firm activated its business continuity team last week and created “war rooms” that included bringing together engineers and technical experts from SunGard, BNY Mellon, Oracle, IBM and others from around the world to attack the problem.
The firm also established and resourced a separate reconciliation team and has begun the process of validating the activity of the past week.
“We do not yet know the root cause of the failure, but we will be conducting a thorough analysis, including engaging a separate, independent third-party to assist us,” Hassell said.
BNY Mellon said the failure of the platform affected 66 of its fund accounting clients and about 1,200 fund structures.