BNY Mellon creates tri-party repo subsidiary

BNY Mellon is targeting enhanced capabilities in the US government securities clearance and tri-party markets with a new subsidiary. 

BNY Mellon has formed a wholly owned subsidiary in a bid to increase efficiency of the US government securities clearance and tri-party repo markets.

BNY Mellon Government Securities Services is designed to improve capabilities, governance, transparency and resiliency in the US government securities and US tri-party repo businesses.

The move reinforces BNY Mellon’s position as the dominant provider in the repo market following the closure of JP Morgan’s GCF repo settlement division.

JP Morgan revealed last July it was pulling back from certain government securities settlement functions for broker-dealers.

Brian Ruane, current CEO for broker dealer services at BNY Mellon, will take over as CEO of the subsidiary to lead operations alongside newly appointed president and chief operating officer Andrea Pfenning.

“The creation of BNY Mellon Government Securities Services further supports BNY Mellon’s long-term track record of investing in this business to deliver continuous improvements in operational and technology resiliency,” said Ruane.

“This is an important business and a strategic differentiator for BNY Mellon, and with the establishment of BNY Mellon Government Securities Services, we will continue to enhance functionality to meet future client needs.”

In addition to these appointments, BNY Mellon has appointed three independent directors including former global treasurer and partner of Goldman Sachs Elizabeth Robinson who will act as chair of the board.

Former chairman and CEO of FINRA Richard Ketchum has also joined the board along with former US country head for the LSEG David Weisbrod.

The BNY Mellon Government Securities Services board of directors will also include Michelle Neal president of BNY Mellon markets and James Wiener, senior executive vice president and chief risk officer.

“As the government securities clearing market has evolved, we have continued to invest in technology to increase capacity and enhance services to meet client and market demands,” said Gerald Hassell, chairman and CEO of BNY Mellon. 

“Our clients are also evolving, and we will continue to develop functionality to meet their changing needs. This subsidiary establishes a governance structure and operating model that will enable expert oversight for this important business.”