Bisys Group

(BSG)

will pay $21.4 million to settle

Securities and Exchange Commission

charges that it made improper marketing arrangements with mutual fund advisers.

The investigation, which began in 2004, examined arrangements between Bisys' fund administration unit and mutual fund advisers in which portions of Bisys' administration fees were used to pay for marketing and distribution of the mutual funds.

From June 1999 to July 2004, Bisys entered into side agreements with the investment advisers to 27 mutual fund families. Those agreements obligated Bisys to rebate a portion of its fund administration fee to the funds' investment advisers so the advisers would continue to recommend the company as an administrator, the SEC said.

Bisys said it neither admits nor denies findings of the order. The company said that it has terminated all existing marketing arrangements, disciplined employees involved with the agreements in question and implemented new compliance procedures.