Florida State Board of Administration's selection committee recommended rehiring Bank of New York Mellon as global master custodian for the $166 billion in assets the FSBA oversees, said John Kuczwanski, FSBA communications manager.
After a protracted search that began in early 2011, the staff committee endorsed BNY Mellon over other finalists, even though the Tallahassee-based FSBA has litigation pending against the bank stemming from a 2009 lawsuit against BNY Mellon in which the Florida State Attorney General Pam Bondi intervened in 2011, accusing the custodian of overcharging the Florida Retirement System of millions of dollars for foreign currency exchanges.
“Forex concerns will be negotiated going forward so there is no ambiguity,” Mr. Kuczwanski said.
Ashbel C. Williams Jr., FSBA executive director and chief investment officer, will make the final decision on hiring a global custodian, Mr. Kuczwanski said.
“There is no set time frame for Ash to make his final decision, but I expect it to be made in the near future,” Mr. Kuczwanski said in a follow-up e-mail responding to questions.
J.P. Morgan Chase and State Street Bank & Trust were the other finalists.
BNY Mellon is the incumbent global master custodian for funds the FSBA oversees, including the $136.8 billion Florida Retirement System defined benefit plan and $8.1 billion 401(a) defined contribution plan. All FSBA values are as of Wednesday.
While awaiting completion of the search process, FSBA has extended BNY Mellon's contracts, including for the DB plan, which initially expired in 2012, and the 401(a) plan, which initially expired in 2011.