BNY Mellon is creating a new company to clear futures and derivatives trades on behalf of its institutional clients.
The launch of BNY Mellon Clearing comes as regulators push to increase the amount of over the counter derivatives cleared centrally in a bid to reduce risk.
The unit - a US registered futures commission merchant and a member of the National Futures Association - will become a clearing member on major exchanges and central clearinghouses around the world.
Sanjay Kannambadi, previously head of BNY Mellon's office of innovation, will serve as CEO, reporting to Art Certosimo, CEO of alternative and broker-dealer services.
"BNY Mellon Clearing will provide clients with our extensive operations, technology, risk, finance and compliance capabilities, along with access to exchanges and clearinghouses around the world. 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," says Kannambadi.