Central Bank of Ireland Enforcement Action – BNY Mellon Fund Services (Ireland) DAC fined €10,780,000 and reprimanded for breaches relating to outsourcing
March 2022On 22nd of March 2022, the Central Bank of Ireland, reprimanded and fined BNY Mellon Fund Services (Ireland) DAC (‘BNY’) €10,780,000 for 16 regulatory breaches relating to the outsourcing of fund administration activities.
The breaches took place between July 2013 and December 2019 with durations ranging from 26 days to 6 years. The CBI identified issues with BNY’s outsourcing framework which were not resolved despite risk mitigation programmes being issued to BNY.
Breaches in relation to Outsourcing
- Repeatedly failing to notify the Central Bank and obtain its approval prior to the commencement of new outsourcing arrangements
- Repeatedly failing to monitor and assess the financial performance of outsourcing service providers
- Repeatedly failing to submit correct annual outsourcing returns 5
- Repeatedly failing to ensure that a senior member of staff completed, signed and dated a review of the check and release of the Final NAV prior to its release, and
- Failing to notify clients prior to the commencement of an outsourcing arrangement
This enforcement action is a timely reminder of the importance of having adequate outsourcing arrangements in place following on from the Cross Industry Guidance on outsourcing which was issued in December 2021.
Details of the press release on this enforcement action can be found through the link below:
BNY Mellon Fund Services (Ireland) DAC fined €10,780,000 and reprimanded by the Central Bank of Ireland for regulatory breaches relating to outsourcing
By: Eilish Larkin - Regulatory Consultant