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The
Financial Reporting Council said on Tuesday the investigation
would cover the conduct of KPMG auditors regarding BNY Mellon's
London branch.
"We are committed to setting the highest standards in our work
and will cooperate fully with the FRC in its enquiries," a KPMG
spokesman said.
Britain's Financial Conduct Authority fined BNY Mellon, the
world's biggest custody bank, 126 million pounds ($199 million)
in April for failing to keep customer money safe during the
financial crisis.
BNY's rule breaches spanned nearly six years from November 2007
to August 2013. This period included the collapse of Lehman
Brothers in 2008, which prompted British regulators to check
that custody banks were complying with safe-keeping rules.
KPMG, one of the world's "Big Four" accounting firms, was
responsible for reporting to the financial regulator that BNY
Mellon was complying with rules on the safe-keeping of customer
assets.
The FRC's investigation will cover the years' that ended on 31
December 2007 to 31 December 2011. The watchdog has powers to
impose unlimited fines and ban an accountant from the industry.
(Reporting by Huw Jones; editing by Jason Neely and Jane
Merriman)
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