BISYS Adopts Reform on Mutual Fund Agreements

April 19, 2005 ( - BISYS has announced that due to an ongoing investigation into its mutual fund services' business, its has launched a Board-led internal investigation and has already implemented some reforms.

In a press release, the company stated that the Board   of   Directors hascommenced an investigationintothe certain fundservicesarrangements. Under investigation by the Securities and Exchange Commission (SEC) arecertainarrangements underwhichBISYS “agreedwiththeadvisersofcertainUSmutual fundstouse a portionofthefeespaidto[BISYS]bythemutualfundtopayfor,amongotherthings,expensesrelatingtothe marketing anddistributionofthefund shares,tomakepayments tocertainadvisers, andtopayforcertainotherexpenses,” according to the news release.

The Board investigation will attempt to be completed by May 10; however, if this is not possible, the company has said that it may not be in a position to file its third quarter Form 10-Q. The SEC will be informed of the findings of the Board, according to the announcement.

The company entered into such agreements before December, 2003, according to the announcement, and has notified the SEC of them. Under the external investigation, BISYS is   continuing   tocooperateintheSEC probe   byprovidinginformationand documentsandmaking employeesavailableforinterviews andtestimony, the company said.

The company has also adopted reforms, it said. According to the announcement, BISYS has:

  • terminated   or   is intheprocess of terminatingthearrangementswithmutual fund a dvisors.
  • created a   special   committeeof theBoardtoassess appropriate personnelactions.
  • implemented   revised   procedures regardingdistribution and administrationarrangements   with its   mutual fund clients.
  • commenced   enhanced   trainingprogramsforrelevantpersonnel.