Rumours had circulated for some weeks that Bank of New York (BNY) was on the verge of announcing a deal which would take the nascent correspondent or out-sourced broker-dealer clearing business in Europe on to a higher plane. Today came confirmation with the news that ING has out-sourced its cash equities clearance and settlements operations in London, New York, Hong Kong and Singapore to BNY. This is easily the largest correspondent clearing contract to be awarded in Europe to date.
The Brokerage and Clearing Services Sector at BNY will now provide ING with correspondent clearing services and fully disclosed clearing services to proprietary and institutional customer agency businesses. The services provided will vary geographically, and will include the generation of trade confirmations and statements, settlements of trades, and in certain locations, maintaining ING’s books and records. This multi-market agreement will include the transfer of approximately 100 ING staff, primarily in London, who will become employees of BNY. “The addition of experienced ING personnel will help ensure the seamless continuation of high quality service to ING and its customers,” says BNY.
The deal adds to BNY’s existing institutional broker/dealer clearing operations in London as well as its correspondent clearing operations in Asia and the United States. The arrangement also fits with ING’s strategy of providing its businesses with variable cost clearing and settlement services.
Announcing the agreement, Jeffrey Tessler, general manager, Europe, The Bank of New York, said: “We are pleased to provide ING with an outsourcing solution that will help them meet the challenges of today’s highly competitive marketplace. We are also proud to align ourselves with a top-tier market leader like ING.”
Francis J. LaSalla, president and chief operating officer, BNY Clearing Services, LLC, added, “The ING outsourcing arrangement is a significant addition to our expanding global correspondent clearing business. This transaction, coupled with our outsourcing agreement with the retail clearing platform of Tilney Investment Management, enhances our position as the pre-eminent global correspondent clearing firm.”
Erik Dralans, Member of Executive Committee Europe, ING, said, “This arrangement is the ideal solution for ING. There is currently no provider that is capable of offering this service on a global basis at the level required by a company like ING. We will transfer many ING staff to The Bank of New York, giving it access to highly experienced settlements professionals. This agreement will, through The Bank of New York’s development of settlements technology infrastructure, offer us the ability to carry out a high volume of transactions efficiently, whilst also allowing us to offer competitive variable costs to our international cash equity business.”