BNY Mellon launches clearing company

Date: Wednesday, June 23, 2010
Author: Hedge Funds Review

BNY Mellon has created BNY Mellon Clearing to clear futures and derivatives trades for institutional clients.

The company is a US registered futures commission merchant and a member of the US National Futures Association. It plans to become a clearing member on major exchanges and central clearing houses on a global basis.

Clients expected to benefit from the new business include hedge funds, pension funds and insurance companies.

BNY Mellon Clearing will be a wholly-owned, non-bank subsidiary of BNY Mellon.

The new company will be led by CEO Sanjay Kannambadi, reporting to Art Certosimo, senior executive vice president and CEO of alternative and broker-dealer services at BNY Mellon. Kannambadi previously headed BNY Mellon's office of innovation, where he led a team responsible for the development of new products and services.

BNY Mellon president Gerald Hassell said the launch was a "logical extension" of the company's business model.

Kannambadi added: "The company's formation is designed to anticipate the rapid changes occurring in the clearing and settlement process for derivatives and the need for institutional investors to have a capable, stable partner as the market grows and evolves."

The move comes as regulators worldwide consider pushing banks and asset managers towards central clearing of over-the-counter derivatives in an effort to reduce counterparty risk.