- Galvin queries record keeper and six large fund providers.
- Billions of dollars in assets were affected, officials say.
Massachusetts’ chief securities regulator is investigating a technology failure that caused delays in the pricing of mutual funds and exchange-traded funds for several days last month.
Secretary William Galvin has asked Bank of New York Mellon Corp. and six mutual fund providers how the “glitch” in fund accounting affected individual investors, his office said Friday in a statement.
Technology used by BNY Mellon to generate net asset values broke down on Aug. 24. The software, provided by SunGard Data Systems Inc., prevented the bank from issuing NAVs, the equivalent of closing prices, for many funds.
The issue affected at least 46 investment companies, hundreds of funds and billions of dollars of assets, according to the statement. Some fund companies calculated their own prices during the breakdown and BNY Mellon worked with clients to use alternative methods. But that caused delays in posting NAVs and corrections of some of them in the days thereafter. The technology took about a week to be restored and catch up.
The initial probe involves BNY Mellon and six of the largest firms affected: Goldman Sachs Group Inc., Deutsche Bank AG, First Trust Advisors, Guggenheim Partners, Prudential Financial Inc. and Federated Investors Inc. The inquiry asks them to detail the scope of the problem and any corrective action being taken to address harm to individual investors, the statement said.
Kevin Heine, a BNY Mellon spokesman, said the New York-based bank had no immediate comment.
A spokesman for First Trust didn’t immediately respond to requests for comment. Goldman Sachs, Deutsche Bank, Federated, Guggenheim and Prudential declined to comment on the inquiry.
Prudential said it has reconciled NAVs with the values used for processing to determine whether any adjustments need to be made.
“Where needed, customers will receive communications that reflect any adjustments,” Theresa Miller, a company spokeswoman, said Friday in an e-mail.
BNY Mellon, a custody bank, keeps records, tracks performance and lends securities for institutional investors. As of June 30, it had about $28.6 trillion under custody and administration, trailing only Boston-based State Street Corp.