BNY Mellon to close European derivatives clearing
09 October 2014 Frankfurt
Image: Shutterstock
BNY Mellon is closing its European derivatives clearing business following a delay in the implementation of European Market Infrastructure Regulation (EMIR) mandatory clearing rules.
The custodian confirmed plans to close its US derivatives clearing business late last year, and promised at the time that the European arm would remain untouched.
But delays in the implementation of EMIR mandatory clearing rules, which have now been pushed back to late 2015 at the earliest, have forced the custodian's hand.
A BNY Mellon statement said: “After careful consideration BNY Mellon has decided to exit the European derivatives clearing business. We have taken the view that market and regulatory factors will limit our ability to grow the business in the future.”
“Specifically, EMIR mandatory clearing has been pushed back to late 2015/early 2016, delaying the expected expansion of the OTC clearing business, which was a key element of our derivatives clearing strategy.”
The custodian said it is fully committed to providing an orderly wind down process for clients so they can transition their activity to other providers in the market.
BNY Mellon’s Q2 2014 financial results did reveal higher clearing services fees for the quarter, with the custodian earning $326 million. Clearing services fees in Q2 2014 beat Q2 2013 by $5 million.
Speaking in July, Gerald Hassell, chairman and CEO of BNY Mellon, said: "Our asset servicing, clearing and investment management fees grew nicely as we remained sharply focused on our clients' investment needs. Our clients continue to rate us highly in terms of new service offerings and the quality of our capabilities.”
The custodian confirmed plans to close its US derivatives clearing business late last year, and promised at the time that the European arm would remain untouched.
But delays in the implementation of EMIR mandatory clearing rules, which have now been pushed back to late 2015 at the earliest, have forced the custodian's hand.
A BNY Mellon statement said: “After careful consideration BNY Mellon has decided to exit the European derivatives clearing business. We have taken the view that market and regulatory factors will limit our ability to grow the business in the future.”
“Specifically, EMIR mandatory clearing has been pushed back to late 2015/early 2016, delaying the expected expansion of the OTC clearing business, which was a key element of our derivatives clearing strategy.”
The custodian said it is fully committed to providing an orderly wind down process for clients so they can transition their activity to other providers in the market.
BNY Mellon’s Q2 2014 financial results did reveal higher clearing services fees for the quarter, with the custodian earning $326 million. Clearing services fees in Q2 2014 beat Q2 2013 by $5 million.
Speaking in July, Gerald Hassell, chairman and CEO of BNY Mellon, said: "Our asset servicing, clearing and investment management fees grew nicely as we remained sharply focused on our clients' investment needs. Our clients continue to rate us highly in terms of new service offerings and the quality of our capabilities.”
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