Fund providers continue to wrangle with closing price reporting for their products after an accounting system provided by Bank of New York Mellon failed Monday.
The technical issue is widespread, impacting a large number of providers and hundreds of mutual funds and ETFs. Prudential, for instance, says 40 of its more than 60 funds have been affected. BNY Mellon says the system came back online Tuesday, and is catching up with trading activity.
Without real-time digital feeds, some firms say they are calculating closing prices on their own.
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“Since first becoming aware of the issue, Prudential Investments has worked diligently to manually calculate net asset values for certain mutual funds in the absence of electronic data,” a firm spokeswoman says. “Once we receive accurate prices, we will update all customer account balances and transactions to reflect the correct prices, as needed.”
With several of its funds affected by the accounting system failure, Federated Investors recommended that shareholder transactions in four of its funds be reprocessed, providing a website for investors to check where the NAV from that day is being changed for a fund.
“Federated currently anticipates continuing to calculate NAVs for days subsequent to Monday, Aug. 24, 2015, based on direction provided by Federateds Valuation Committee, making those NAVs available by 8 p.m. each evening,” the firm noted in a statement on its website. “For days subsequent to Monday, Federated continues to work with the third-party accountant to receive NAV information, which could result in the need to reprocess for those days.”
Voya representatives say that trading activity can continue and the NAV of those transactions will not be affected, though they may be delayed. They did not say how many Voya funds have been affected by the tech issue.
“We have been providing investors and its intermediary partners periodic updates during this situation via the appropriate websites and other means. It is important to note that all shareholder trades that are in good order will be honored at the NAV on the day the trade is submitted, even if the NAV and the trade are processed at a later date.”
Guggenheim Partners spokesman Ivy McLemore says that the firm is opting to work with BNY Mellon to report closing prices in real-time rather than on a delayed basis.
“The issues affecting them and the delays with which they provide the end-of-day information, however, do not affect the settlement of purchases and redemptions by authorized participants, as those continue to be settled within the authorized settlement timeframe at the ETF’s actual end-of-day price for the date of their transactions.
Aside from explaining how they were handling the tech issue, most providers had no comment about potential refunds to investors who may have traded on false pricing or any liability concerns as a result.
BNY Mellon says the system, which is provided by SunGard Data Systems, is working again but not yet fully operational. Our teams have been working together to clear the backlog, Kevin Heine, a spokesman for BNY, told Bloomberg. We are working with SunGard to resume normal processing as soon as possible.
