US banking giant fined £126m by City watchdog

The Bank of New York Mellon was handed the penalty by the Financial Conduct Authority (FCA) over failings between November 2007 and August 2013.

It was found to have breached rules in relation to its role as a “custody bank”, with the “systemically important” role of keeping assets safe.

The seriousness was compounded by the fact that this took place at a time of “considerable stress in the market”.

Failings covered the Bank of New York Mellon London Branch (BNYMLB) and the Bank of New York Mellon International Limited (BNYMIL), which together provide custody services to 6,089 UK-based clients.

During the period of the breaches, they held safe custody asset balances peaking at £1.3 trillion and £236 billion.

BNY Mellon said in a statement that it had “worked co-operatively with the FCA” to address issues related to its compliance with the rules. It said that the fine paid was “fully covered by pre-existing legal reserves”.

The statement added: “Importantly, BNY Mellon remained financially robust throughout the relevant period and, as indicated by the FCA in its final notice, no clients suffered any loss as a result of the issues identified.”

It said it had launched an internal review with the assistance of an independent accounting firm and external legal advisers “immediately upon learning of these issues” and had now taken “clear steps” to put in place new policies and procedures.

The final fine is the eighth biggest to have been imposed by the regulator.