BNY is to offer the new service on an outsourcing basis to retail and private client stockbrokers and investment managers, building on its experience in the US where it serves 250 brokers and investment managers. To give the business a headstart, the bank has agreed to acquire the back-office clearance and settlement capabilities of Tilney Investment Management for an undisclosed sum.

Commenting on the move to outsource, David Campbell, executive chairman, Tilney Investment Management, says: "Working with a recognised global leader in securities outsourcing is the best way of securing optimal future operating efficiencies for Tilney and will enable us to concentrate on what we do best -providing superior returns and service to our clients."

BNY says it will promote its new clearing business to execution only, advisory and discretionary private client stockbrokers and investment managers on a fully disclosed basis. These services include: multi-currency execution, settlement and accounting services, detailed client record keeping and client reporting and cash management.

Tarot will be used at BNY for both Model A and B clearing for a broad range of financial instruments and products including international and domestic equities; fixed income; collective instruments including unit trusts; options; foreign exchange and tax efficient products such as ISAs and PEPs.

Gerald Hassell, president, The Bank of New York, says: "Pressure on margins and potential capital adequacy changes in Europe are leading an increasing number of brokers to review their current back-office and clearing arrangements."