According to BNY Mellon spokesman Kevin Heine, the problems first surfaced on Monday as a result of a failed software upgrade for an accounting system, SunGard's InvestOne, that BNY Mellon relies on to provide net asset values (NAVs) for mutual funds and exchange traded funds.

These funds have to be valued on a daily basis. Regulators, investors and fund managers are concerned that major price discrepancies could have led to funds being bought and sold at inaccurate prices.   

Although the system was partially restored on Tuesday, it was still not fully operational by the end of trading on Wednesday. To make matters worse, the fault occurred at a time of heavy trading activity and worldwide market volatility sparked by concerns over the Chinese economy. 

BNY Mellon is now working with regulators and fund managers in the US to recalculate the NAVs and work its way through a backlog of unvalued assets that could take days to complete. It is also working with SunGard to restore the accounting system.

"The SunGard system became available with limited capacity late yesterday," Heine said on Wednesday. "Our teams have been working together to clear the backlog and we are working with SunGard to resume normal processing as soon as possible."

BNY Mellon is one of the largest asset servicing firms in the world and looks after more than $26 trillion in assets. The computer glitch caps what has been a year to forget for the bank. In July it was supplanted by arch-rival State Street as the  firm with most assets under custody and administration and in April it was hit with a £126 million fine by the UK's Financial Conduct Authority for breaching its custody rules.

Meanwhile SunGard is currently in the process of being acquired by rival software maker Fidelity National in a deal worth $9.1 billion. Its InvestOne system manages more than $28 trillion of assets for tens of thousands of funds.

SunGard is yet to make any public comment on the incident.