19DEC99: The Global Straight Through Processing Association (GSTPA) has announced the results of the current selection process for a provider to build and operate its new cross border trade matching utility. GSTPA has identified a preferred vendor alliance with which it is proceeding to final contractual negotiations.

The participating institutions include:

• The Depository Trust and Clearing Corporation (DTCC)

• IBM

• SegaInterSettle AG

• S.W.I.F.T. s.c.

• TKS Teknosoft SA / TATA Consultancy Services

GSTPA said: 'A number of excellent firms had formed alliances in pursuit of this critical industry effort and the GSTPA compliments them on their efforts and looks forward to their continued support of the goals and objectives of the Association by their serving the members of the user community as they prepare to interoperate with the new utility. The level of professionalism and effort by all the organizations that participated in the selection process speaks to their commitment to the global securities industry and capabilities to help meet the challenge of moving to straight through processing.'

'Northern Trust is a good fit for the University of North Carolina at Chapel Hill,' said Barbara Aaron, Director of Investment Operations for the University. 'They provide state-of-the-art technology coupled with a great deal of flexibility. Their people have been great to work with; they are very focused on customer service and truly view our relationship as a partnership. We look forward to a long-term custody relationship with Northern.'

CitiStreet is expected to begin operations in the first half of 2000, subject to regulatory approval. It will administer approximately $200 billion in assets and service more than 4 million plan participants. The company will have 3,000 employees located primarily in Boston, East Brunswick, Jacksonville, Minneapolis, New York and Quincy. James S. Phalen has been appointed as CitiStreet's chairman and chief executive officer. Phalen is an executive vice president of State Street and head of its Retirement Investment Services (RIS) business.

The man to replace him is Jose Placido, who has been with Royal Trust for eleven years. Placido ran the global custody business in London from 1996 to April this year, when he returned to Toronto to run client service delivery and relationship management.

The Euroclear/Sicovam/Clearnet alliance will take the form of two new entities, created for the distinct purpose of governing clearance and settlement as well as netting of securities transactions, respectively. The boards of these two entities will set all strategic and policy initiatives for the clearing, settlement and netting activities of the alliance. The alliance will seek to partner with other CSDs, for example through bilateral links or by sharing the Sicovam and/or Euroclear clearing and settlement platforms.

The agreement will come as a severe embarrassment for Euroclear's rival Cedel, which only recently was predicting that Sicovam, the French securities depository, would join the European Clearing House. Cedel issued a terse announcement to confirm that negotiations with ParisBourse/Sicovam had ended. Andre Lussi, Cedel's president and CEO, said: 'The issue was one of valuation. Unfortunately we have been unable to reconcile the ParisBourse/Sicovam valuation with their ownership target in an enlarged European Clearing House.'

SEE ANALYSIS PAGE FOR MORE BACKGROUND ON THE DEAL

Northern has also hired Jussi Louekoski to focus on expanding into the Nordic countries. He will be responsible for global custody business development across Denmark, Sweden, Norway and Finland, reporting to Penny Biggs, senior vice president and head of UK, European, and African new business development. Jussi has six years' industry experience, most recently from Deutsche Bank and JP Morgan Investment Management.

04NOV99: London Clearing House (LCH), Government Securities Clearing Corporation (GSCC) and the Euroclear Operations Centre today announced that their respective boards have agreed to provide a joint facility for the netting of European government bond repo and cash transactions. Preparations will commence immediately for the new partnership to become effective in early 2000.

The three partners will own equal shares of the European Securities Clearing Corporation (ESCC), an entity being created specifically for the purpose of providing netting and settlement services for European government debt securities. ESCC’s netting facility will be based on the LCH RepoClear service, which was launched in August 1999, initially as a netting facility for German government bond repos. This service will be significantly enhanced by the combined expertise and systems integration of the three partners.

The main points of the agreement are:

• ESCC will be responsible for the governance of the RepoClear service. ESCC will have a board consisting of nine market participant directors, one director from the management of each of its three owners, and a chairman appointed by the board.
• LCH will continue to act as the central counterparty, responsible for risk management and operations;
• RepoClear will adopt some of GSCC’s proven practices that are appropriate for the European market, as determined by the ESCC board;
• The Euroclear Operations Centre will provide trade capture and matching services for OTC traded government bond cash and repo trades, and will become a trade entry system for RepoClear;
• Integrated Collateral Management products offered through the Euroclear System will be available to LCH members in order to manage the collateral given to LCH; and
• GSCC and LCH will set up a cross-margining arrangement aiming to reduce the cost of clearing for members who operate on GSCC and LCH systems.

LCH will be extending the scope of its RepoClear facility to include Belgian government bond repos prior to the end of the year. It is intended that further roll-out of the service in 2000 to the other principal European repo markets will occur under the aegis of ESCC, following its establishment early next year. Cash bond clearing and a general collateral repo facility will be added as soon as possible.

David Hardy, LCH’s Chief Executive, said today: 'We are delighted that Euroclear and GSCC have become partners in the RepoClear facility. Our combined expertise in the areas of risk management, cash and repo netting, and settlement provides an excellent base on which to build a member-governed, pan-European bond clearing house.'

Sal Ricca, GSCC President and Chief Operating Officer, comments: 'Duplicate infrastructures among clearance and settlement organisations in any given marketplace is inherently inefficient. By creating a single clearing corporation that combines the best features of Euroclear, GSCC and LCH, we are able to maximise the benefits conferred to our members. This includes a strong co-ordination with U.S. marketplace practices to provide the same balance sheet netting and operational benefits in Europe that are currently provided by GSCC in the U.S. It will also pave the way for more efficient cross-margining and cross-border trading.'

Luc Bomans, General Manager, Euroclear Operations Centre, says: 'Combining RepoClear with the European Securities Clearing Corporation initiative is a direct response to growing industry demand for a centralised netting and settlement system for European government debt transactions. This collaborative effort will enable the three partners to leverage their respective areas of expertise and deliver a superior product to the marketplace. By exploiting the synergies within the existing infrastructure, we are demonstrating our strategic commitment to further rationalise the European clearing and settlement environment. We are pleased to share our experience in cross-border settlement and collateral management with our partners.'

The new service will assess the structure and operational effectiveness of Central Securities Depositories (CSDs), providing information on protection of assets, risk minimisation, and service quality to custodian banks, brokers, International Central Securities Depositories (ICSDs), asset managers and investors.

The service - coordinated by Thomas Murray in London – combines Thomas Murray’s strong position as a provider of research, evaluation and assessment of global custodians, agent banks and CSDs with the contribution of Standard & Poor’s extensive analytical resources and experience in evaluating risk.

'The Depository and Risk Evaluation Service represents a milestone in cross-industry cooperation – not only will it combine Thomas Murray’s research capabilities with Standard & Poor’s analytical skills, but it will also draw on the expertise contributed by the industry and other third parties,' said Simon Thomas, chief executive officer of Thomas Murray. 'The service meets the growing demand for information on and evaluation of the world’s depositories.'

'The service will bring greater transparency to the operations of depositories in many emerging markets, facilitating both capital market development and investor protection,' said Clifford Griep, executive managing director, Standard & Poor’s Financial Institutions Ratings group. 'The combination of Thomas Murray’s custody analytic expertise with the contribution of Standard & Poor’s credit and risk analysis will provide unparalleled service in the arena of securities system risk.'

• Computer Sciences Corporation (CSC), working with Sun Microsystems, DST Systems Inc. and Syntegra/British Telecom

• IBM, working with Reuters PLC and Equant Network Services

• SIS SegaInterSettle AG, working with TKS-TEKNOSOFT SA/Tata Consultancy Services and Society for the Worldwide Interbank Financial Telecommunication s.c. (S.W.I.F.T.)

• S.W.I.F.T. and The Depository Trust Company (DTC), working with Andersen Consulting, Hewlett-Packard Company (HP) and Oracle Corporation along with the Canadian Depository for Securities Limited (CDS) and CRESTCo Limited.

'There were a number of outstanding responses to the RFI phase,' said James Leman, chairman of the vendor selection committee of the GSTPA. 'It was a tough choice with lots of great potential service providers but we made the decision based on the scoring criteria. While those firms who did not make the final selection did very well, these four consortia demonstrated the best scores and potentially the best solution for the industry.'

'The Association appreciates the contribution that all participants made in this process,' stated Art Thomas, Chairman of the GSTPA. 'I encourage every supplier to rally around these four alliances to see if they can combine to deliver a best of breed solution for our industry.'

The RFP process will be the third and final stage in the GSTPA selection process. The initial phase consisted of an Expression of Interest (EOI) in which over 100 firms participated. This was followed by a Request For Information (RFI), which involved 22 firms and resulted in eight consortia submitting formal responses from which the four consortia were drawn.

Euroclear's real-time settlement service is available at no additional cost. Earlier this year Cedel, the other major ICSD, launched its competing service, continuous settlement.

As part of the transaction, Wachovia will sell its master trust and institutional custody businesses, representing approximately 270 client relationships with about $61 billion in assets. This will increase significantly State Street’s share of the middle market, which is considered to be accounts with less than $500 million in assets.

To provide a seamless transition for clients, State Street will open a new office in Winston-Salem. State Street also will offer positions to 43 Wachovia client relationship managers and sales and marketing staff who currently service the business. In addition to the new North Carolina office, State Street  will expand its existing office in Atlanta to augment its presence in the Southeast.

'We view this transaction as a clear illustration of State Street’s commitment to the fast-growing middle market,' said Ronald E. Logue, vice chairman of State Street Corporation. 'A key to success in this business is providing clients with first-rate local service. By combining Wachovia’s formidable on-site client services force with State Street’s breadth of products and expertise, we believe we can provide the Southeast middle market with an unparalleled level of service. We’re delighted too, through this transaction, to be augmenting our presence in the Southeast, which is already a significant region for our growing corporate business.'

• Trustee and custody services mandate from Bradford & Marzec, an asset management firm based in Los Angeles;
• Global custody mandate for Shropshire County Pension Fund of the UK, with assets valued at GBP640 million;
• Custody and trustee services mandate for the defined benefit scheme of Goodyear Canada Inc.; and
• Custody and related services mandate for the CAD117 million defined benefit and money purchase plans of Case Corporation Canada.

Although Cedel followed all the rules in calling the meeting, it was criticised by the European Securities Users Industry Group, who complained that not enough notice had been given. ESUIG, a group of powerful players in the securities market, has recently been under fire for its apparent links to Euroclear, Cedel's main rival.

Robert Seaford is to retire from Paribas at the end of July. Seaford distinguished himself last year with his euro project leadership role for the French bank's securities services unit, and has felt at a something of a loss since the successful transition. He came to Paribas through its acquisition of JP Morgan's European custody business. He leaves Paribas at a time when its future is distinctly uncertain, and as its securities services division, which is very strong on equity clearing, must surely be pondering the prospects of staying independent or joining forces with another provider - even, perhaps, Euroclear? Seaford is too talented and knowledgeable to be idle for long - offers on a postcard, please.

Not sure one could say the same about Kevin Sims, who has recently resigned from Global Investor Services, the HSBC business formally known as MSS. Sims was a salesman for GIS/MSS and likes to claim all the credit for the spectacular growth of the asset and client base over the last five years - a fact that others might well justifiably dispute. That, however, is not his worst crime. On leaving the organisation he sent out a particularly mean-spirited and unpleasant press release in which he set out to denigrate his former boss - but it has only served to further tarnish his own reputation.

No such problems with Mark Van Grinsven, the general manager of Northern Trust's London branch, who is on his way back to Chicago to take up a new role as head of risk management and compliance for the bank's institutional business worldwide. He will be replaced by David Blowers, who is currently a senior vice president and regional manager of the bank's corporate and institutional services unit in Chicago. Blowers has been with Northern for 17 years.

The National Company for Cooperative Insurance (NCCI) has appointed Northern as global custodian for USD80 million of assets. NCCI is based in Riyadh, Saudi Arabia; and

The Mitsubishi Trust & Banking Corporation has selected Northern Global Investments to manage a USD85 million capitalisation US equity mandate, and will also provide custody and related administration services.

Meanwhile in New York, the exodus of index fund managers from Deutsche to Merrill Lynch last week has led to the unexpected departure of Steve Soltis, the man drafted in to Bankers Trust by Mary Cirillo to take charge of custody operations. In Deutsche's GIS world, he was given Investor Services, which included all investment administration and performance measurement products, as well as retirement services. But the key part of his world was passive fund management, and it appears that, following the loss of these key players to Merrill, this has now moved to the control of Deutsche Asset Management. Soltis was so unhappy about this decision that he resigned.

'ProMutual is constantly seeking ways to best provide for our policyholders, and we are always searching for the best possible services available,' said Philip Martell, Assistant Controller, ProMutual Group. 'We chose Northern Trust for what we believe is an outstanding track record, and for the way each Northern employee portrayed a sense of teamwork and camaraderie during our visit.' (Ed. - yes, he really said that!)

ProMutual Group is one of the largest and most experienced medical and dental professional liability insurance companies in the Northeast US, serving over 13,000 medical professionals and institutions for more than two decades in Massachusetts.

Northern has also been appointed as global custodian to Baillie Gifford EAFE group trust product, which was launched earlier this year. The fund commenced with initial commitments of US$20 million.

Up in Edinburgh, Donald Anderson has been promoted to director of State Street Trustees Ltd. He replaces Jim Fisken, who recently retired. Since State Street acquired Bank of Scotland's trustee business last year, Anderson has been a vice president running the daily operations of the business. He now reports to Ray Edelman, the senior vice president in charge of operations.

Just fifteen days into his new job, and Harrison has made a move - but, instead of segregating the business lines, he's decided to dispense with a layer of management and integrate Global Services into the Global Markets division under Don Layton. Jim Zeigon, who ran Global Services, has left to pursue other opportunities, and the three line heads - Lori Hricik, D'Arcy LeClair and Tom Swayne - will report directly to Layton. Chasers are saying that this is a good move for the custody business, dispelling the notion that the bank was distancing itself from a group of businesses it wanted to sell. In the meantime, Diane Eshleman, recently appointed as chief operating officer of Global Investor Services, has been made an executive vice president.

• A single integrated process in Europe for clearing and settlement of equity and debt transactions is needed;
• The process should deliver reliability, integrity and scalability; risk reduction; and a significant reduction in investment and running costs;
• The solution should incorporate the most appropriate technology, capitalise on existing systems where possible, and be capable of processing an exponential increase in transaction volumes. The industry is not prepared to pay directly or indirectly for duplicate developments;
• Since a single clearing and settlement process may have limited competition, it will require strong countervailing governance;
• No individual organisation should have undue influence;
• Clearing/settlement should have a separate governance process from trading and payments; and
• The process should be largely owned and directed by securities industry users.

Cedel has already responded to the proposals; Andre Lussi, president and CEO, said: 'We welcome this latest response from the user community which is demonstrably very much in favour of the European Clearing House. They have articulated their key objectives which happily coincide with the same principles we have been promoting in the ECH.'

The 13 houses include MSDW, UBS, Citigroup, Merrill Lynch, Barclays and Goldman Sachs. They plan to create a European industry association in due course.

Last year Bank of Scotland (BoS) appointed Mellon to help build the processes and construct a new Open Ended Investment Company (OEIC) to meet the needs of the Bank's customers. But BoS sold its own mutual fund processing unit to State Street at the beginning of 1998, and it might have been expected to appoint State Street to handle this business.

Susan Rice, managing director of personal banking at BoS, said: 'Right from the start of this project we decided that we should outsource the core processing and administration to specialists who have the technology, infrastructure and commitment to support our business and service the needs of our customers. After a thorough analysis of the market, we have chosen Mellon because we believe that they are able to match our own exacting standards of service and delivery.'

State Street's commercial banking business loans averaged $1.9 billion for 1998 and totalled approximately $2.2 billion as of March 31, 1999. The business includes commercial lending, deposits and other banking services for New England regional middle-market companies and companies in selected industries nationwide. Approximately 300 employees of State Street's commercial banking business and related support functions will become employees of Citizens as a result of the sale.

State Street will continue to offer banking services to institutional investors, lease finance and global trade related customers. These services include lending, deposits and cash management.

Marshall N. Carter, chairman and chief executive officer of State Street Corporation, said: 'While our commercial banking business is ideally positioned for continued profitable growth, this transaction helps to complete State Street's evolution towards a complete focus on the needs of institutional investors worldwide, which began in the mid-1970s. Although we anticipate the earnings impact of the sold business to be 5-7% dilutive, based on 1998 pro forma results, we expect to improve upon that by investing in our core businesses and continuing our global expansion. We have a focussed strategy of meeting the increasingly sophisticated needs of institutional investors worldwide.'

Schrank said: 'We’re thrilled to have Joe join us. In addition to his current generation IT responsibilities, Joe will have full accountability for the development of our next generation systems. The next generation of S.W.I.F.T. will be based on the technologies of the Internet and will include real-time products, a rewrite of our store-and-forward messaging, new standards, new interfaces and a range of value-added applications to increase automation and straight-through processing. In addition to IT, Joe will also be responsible for our Global Information Security Group.'

Eng joins S.W.I.F.T. from Chicago-based Ameritech where he was Head of IT for customer sales/service and network operations systems. Prior to that he was head of technology strategy for Ameritech's IT division. Before Ameritech, Eng worked for Bellcore (recently renamed Telcordia Technologies) where he held various management positions in systems and technology for telecommunications and IT markets.

Separately, S.W.I.F.T. reported that its network traffic grew 15.4 percent in 1998 to 937 million messages, compared with 812 million in 1997. Strong growth in securities and market infrastructures messaging offset the negative impact on volumes of the slowdown in Asian and developing markets, and low volatility in world foreign exchange markets, the company said in its 1998 Annual Report, which has just been published.

Securities traffic grew 38 percent in 1998. The securities sector now represents 16 percent of S.W.I.F.T.'s total message volume, up from 13 percent in 1997. Securities messages are the second largest category of messages used by S.W.I.F.T.’s customers.

In London, the Bass pension plans have appointed State Street as sole provider of custody and accounting services. Assets valued at over GBP2 billion will be transferred by the third quarter.

BNY will now handle client reporting, portfolio accounting and valuations for Morgan's assets of USD321 billion. It will also act as master recordkeeper for those Morgan assets held by other custodians.

The deal builds on BNY's existing securities custody and clearing business with Morgan, which sold its institutional custody operation to BNY in 1995. BNY is currently custodian for over USD200 billion of Morgan's assets.

John Schmidlin, head of technology and operations for Morgan's asset management business, said: 'We have enjoyed a long-standing relationship with The Bank of New York and believe that its technology, vision and capabilities are an excellent match with our business objectives. As an investment management firm, our focus is on providing clients with the best possible service and generating the strongest possible returns. Our relationship with The Bank of New York will enable us to do what we do best while fully supported by state-of-the-art technology.'

Chase's results demonstrated the downside of being the most global of the global custodians. A drop in earnings was attributed, at least in part, to client portfolios reallocating assets from emerging to developed markets, where margins are lower. Chase also pointed out that Y2K spending was a factor.

Prior to joining BNY ESI, Pack served as a vice president of Salomon Smith Barney where he built and managed the firm's clearing business. Before Salomon Smith Barney, Pack was at J.P. Morgan & Co. Inc. for more than 10 years, serving in various management positions at the company's global securities services division. During his tenure, he spent three years at J.P. Morgan's London office, where he managed the European Global Custody, Corporate Trust, and ADR businesses.

BNY ESI is a provider of agency brokerage services. In addition to execution and liquidity management capabilities, BNY ESI offers a full range of information, processing and payment management services. With its recent acquisition of San Francisco-based Alpha Management, BNY ESI now provides directed brokerage services to pension plan sponsors.

BNY ESI & Co., Inc. is a separate brokerage affiliate of The Bank of New York and a wholly-owned subsidiary of The Bank of New York Company, Inc. BNY ESI & Co., Inc., is a member of The New York Stock Exchange and other principal exchanges, and SIPC.

Meanwhile Joe Antonellis has been made an executive vice president . Antonellis, who has been head of master trust since 1997, will report to Ron Logue.

John Hall, Managing Director, Austraclear, explained: 'In April 1998 the Reserve Bank of Australia announced that securities issued by central borrowing authorities of State and Territory Governments, held within our system, would be eligible collateral for RTGS funds. Recent trends indicate that a number of domestic issuers are moving to offshore issues resulting in large numbers of these RTGS eligible securities now being held offshore.

'Direct access by Australian domestic market participants to Australian dollar global securities held overseas, primarily in the ICSDs, will greatly improve domestic market liquidity. The Austraclear ICSD links will facilitate use of an estimated $A 23 billion pool of global securities eligible as collateral for RTGS funds in Australia. The links will enable Austraclear members to settle international AUD eurobonds through their Austraclear terminals without the necessity to directly participate in the ICSD systems.'

The proposed service would initially encompass trade capture, comparison, novation, netting, risk management, and reporting for repo and cash trades in European government debt issues denominated in euro. Services might eventually be expanded to include other instruments as well as multiple currencies.

'A collaborative effort between our organisations will allow us to design the most efficient and cost-effective sovereign debt netting service possible,' said Sal Ricca, president and chief operating officer of GSCC. 'We each bring considerable experience and expertise in our respective markets to the table. This initiative will enable us to leverage these capabilities and deliver a superior product to the marketplace - one that would be difficult for either organisation to construct working independently.'

'The synergies between the two organisations are perfect,' Luc Bomans, general manager of the Euroclear Operations Centre, said. 'Our experience in European cross-border bond settlement and collateral management combines well with GSCC's expertise in multilateral repo netting, and risk management in the U.S. By reducing cross-exposures among parties and allowing securities professionals to increase their trading capabilities, market initiatives such as multilateral repo netting will clearly lead to further development of the European repo market.'

Elkins/McSherry's analytics division will now operate as Elkins/McSherry LLC, a majority owned subsidiary of State Street. The board of directors will include Richard McSherry, chairman of Elkins/McSherry; James Elkins, president of Elkins/McSherry; Laurette Bryan, senior vice president and head of State Street Analytics, State Street's pension consulting business; Nicholas Bonn, senior vice president and head of State Street Brokerage Services Inc. (SSBSI); and Andy Howieson, senior vice president and head of State Street Information Partnerships (SSIP).

Elkins/McSherry provides trading efficiency analyses which determines the relative cost to trade on various stock exchanges globally and the effectiveness of traders and brokers. The firm calculates global equity trading costs by measuring trade execution commissions and fees, as well as the market impact calculation of trading effectiveness. In addition, Elkins/McSherry recently introduced the industry's first fixed-income trading cost analysis product. 'By joining forces with Elkins/McSherry, State Street can provide clients with world-class experience and credibility in transaction cost measurement, an increasingly important tool for global investors,' said Bryan.

As part of the deal, State Street Brokerage Services Inc. will acquire all of Elkins/McSherry's NASD-registered broker dealer business to create the foundation for their New York trading desk. James Elkins will lead the New York trading operations and will report to Nicholas Bonn. SSBSI, a wholly-owned subsidiary of State Street, conducts institutional trading, transition management services, commission recapture programs, self-directed brokerage accounts for defined contribution plans and electronic trading. 'Our goal is to establish SSBSI's New York trading desk among the key players in the brokerage community,' said Bonn.

But I digress. Braid, the EAI (and STP) specialist, has hired the fragrant Jenny Knowles as project manager, securities. Many will know Knowles from her time at Thomson ESG, where she managed the project to migrate all SEQUAL ETC clients to OASYS Global after Thomson bought the business from the London Stock Exchange. Prior to that, she worked for the Exchange for nearly ten years, and became one of the market's experts on matching, reporting and confirmation. Less publicly, she is also an extremely accomplished flower-arranger.

However, the claim that RBS is undertaking a review of the business is also wide of the mark. An internal review was completed last year; what is happening now is that RBS is trying to decide whether it can get a good price for Trust Bank, or whether it will have to settle for an unsatisfactory alliance. There is no longer a realistic option of remaining independent. But this is hardly news, even though the embattled spin-doctors at RBS have been trying to deny it. We've all known this for ages, haven't we?

Donald Robertson, finance director of Scottish Value Management, said: 'RBS Trust's strength in shareholder servicing was a key factor in our appointment. We anticipate seeing a significant increase in the number of investors participating in our Dublin funds and obviously it is critical to have such a strong service provider in place.'

Benjie Fraser, vice president of pension fund sales at State Street, said: 'We are delighted to have been awarded this business from a major FT-SE100 company. We are custodian to a strong and growing list of blue-chip UK pension funds and we're very pleased to welcome ScottishPower as our client.'

Last year, State Street was awarded custody of the pension fund assets of Southern Water, a major subsidiary of ScottishPower.

Meanwhile in London Northern has hired Jemma Broadgate as second vice president responsible for new custody sales to UK pension funds. She will report to Penny Biggs, head of sales for the European custody team, and will work alongside Jeremy Hester. Broadgate joins from Midland Securities Services, where she was manager of business development for the UK market.

BNYL will provide offshore fund administration services including fully integrated global custody, fund accounting, fund administration, and transfer agent services. Additionally, BNYL will offer value-added services, including credit, cash management, foreign exchange, securities lending, trade execution and collateral management.

Jeffrey Tessler, general manager, The Bank of New York, securities services, Europe, said: 'The establishment of the Luxembourg bank extends our global fund administration offering and furthers our leadership role as a comprehensive securities servicing institution for fund managers. BNYL reflects our commitment to provide technology-based solutions worldwide for securities servicing clients.'

BNYL will expand the bank's offshore fund servicing business, which includes a joint venture with Allied Irish Bank in Dublin and a trust company in Grand Cayman.

Cedel has also reported record volumes and growth, with securities deposits growing to USD1.8 trillion and transaction volumes increasing by 9% to over 10 million.

'This is a significant new business win for Chase and we are delighted to have a top tier name such as Newton Fund Managers Limited amongst our investment management clients. The business was transferred to Chase following the withdrawal of Bank of Scotland from the trustee services market. Chase was selected due to our product quality, partnership approach to client relationships and market leadership as Depositary for OEICs,' said Tim Gandy, Managing Director, Chase Manhattan Trustees Limited.

Graeme Whyte from Newton Fund Managers Limited said, 'With the appointment of Chase we will be working with a proven leader in the trustee services and global custody industry. We are confident that with the support of Chase's entire franchise of financial services we will continue to provide our customers with enhanced services on a global scale.'

CMTL currently acts as Trustee and Depositary for some 280 funds with over £31 billion in assets. The Newton group was founded in 1977 and today manages over £13 billion in assets. Mellon Bank Corporation owns 75% of the company, with 17.5% remaining in staff ownership and 7.5% with founder Stewart Newton. Newton is an active fund manager who focuses on recognising global investment themes and identifying those companies that will deliver superior earnings and dividend growth for investors.

As part of the deal, Braid has appointed Mark Freed as business director heading its Japanese operations (see Freed story below, 21JAN99); he will report to Ian Spurdle, Braid's regional director for Asia Pacific.

In addition to his new role as chairman, Lamere will continue to lead Mellon Private Asset Management. Palermo adds his new responsibilities as president to his leadership of Global Securities Services, the institutional trust and custody arm of Mellon with approximately $1.8 trillion in assets under administration. Palermo joined The Boston Company in 1986.

In addition to his oversight of Buck Consultants, O'Hanley leads Dreyfus Institutional Investors, the umbrella organization of Mellon's investment management firms, including The Boston Company Asset Management LLC. Dreyfus Institutional Investors ranks among the country's largest institutional investment managers with more than $235 billion in assets under management. He also is responsible for Mellon's international asset management arm, Dreyfus Global Investors, conducting business in the United Kingdom, Japan, Hong Kong, Singapore, Australia, Brazil and Chile.

The Boston Company and Boston Safe Deposit & Trust Company provide investment and custody services for institutional and private clients, cash management, and personal and jumbo mortgage lending.

Kirby is expected to focus on three key issues - expansion of membership, interfaces with other industry bodies such as FIX, and evaluation of suppliers to build and maintain the operating model developed by the Association. This last item will be especially testing for Kirby, as SWIFT clearly hopes to become a supplier and he must be seen as completely impartial. But he enjoys a significant amount of goodwill within the securities industry and his appointment is likely to be seen as a very positive step forward for an initiative which has, to date, produced very little in terms of hard progress on the perennial problem of global STP implementation.

Bankers Trust's CTAS group provides trustee, agency, depositary and related services for all types of securities including bonds, debt programmes, asset backed and mortgage backed securities, project financings and depositary receipts (ADRs, GDRs, EDRs).

The Euroclear System is the world's largest clearance and settlement system for internationally traded securities, serving as the premier hub for cross-border securities services for Euroclear participant organisations located in more than 80 countries.

Kitcat has largely turned around a business that seemed to be going nowhere when he took over: as an indication of his success, LBSS was voted as the top UK agent bank in this year's prestigious Global Custodian survey. Kitcat also points to the acquisition of NatWest's custody business as one of the high points of his tenure. 'The NatWest deal made people take us seriously,' he says.

With over CAD $55 billion assets (USD $45 billion), the OTPPB is the largest pension plan in Canada and the 25th largest in the world. The OTPPB manages assets that support more than 200,000 working and retired teachers in Ontario.

Andrew Jones, vice president of finance of OTPPB said: 'In selecting a new provider for our custody services, we wanted a company with the expertise to meet our unique operational requirements and the foresight to provide the resources that would make this a successful long-term partnership. Among the skills State Street brought to the table were proven leadership in information technology, an ability to develop innovative products, and a willingness to delve deeply into our operations to fully understand how to best meet our rigorous requirements.'

Services to be provided by State Street include global and domestic custody, accounting and valuation, risk management, securities lending and foreign exchange. A full range of technology is also being provided in support of OTPPB's requirements, including technology consulting, custom application development, desktop integration services, and implementation of a fully functional data warehouse.

'We are honored to have been selected by Ontario Teachers Pension Plan Board, a leader in combining sophisticated investment strategies with state-of-the-art technology,' said David Toyne, managing director of State Street Trust Company Canada. 'We look forward to working with this first-rate team and to providing them with the highest levels of service across multiple disciplines.'

BNY ESI International was created as the Bank’s international brokerage arm with the ability to execute and clear trades in over 40 international markets, thereby positioning itself to provide seamless integration of trade management services with bank securities processing services on a global basis. BNY ESI International is a division of The Bank of New York Capital Markets Limited, the SFA-registered subsidiary of The Bank of New York in London.

The London based broker dealer will provide institutions with access to comprehensive agency brokerage services, as part of The Bank of New York’s Straight Through Execution and Processing (STEP) platform. BNY ESI International will leverage the trading and technology expertise of BNY ESI & Co., which is the New York based institutional brokerage unit acquired by The Bank of New York Company, Inc. in 1997.

Dipak Rajani, formerly of Dresdner Kleinwort Benson, and Gareth Jones, of Brown, Shipley & Co., Ltd., joined BNY ESI International to establish the trading desk. With more than 15 years of experience in dealing in the international markets they will be responsible for developing the business throughout Europe.

The bank launched BNY GlobalTrade earlier this year, enabling European clients to enter orders via a PC. BNY GlobalTrade serves the multi-market system giving access to more than 40 equity and fixed income markets worldwide. Institutional clients can use these services to automatically post trade and settlement information, on trade date, to The Bank of New York’s custody systems, thus minimizing risks, cost, and complexities of the entire securities processing environment.

Jeffrey Tessler, General Manager, The Bank of New York, Securities Services, Europe, commented, 'The formation of BNY ESI International extends our services in the global securities markets. This not only reaffirms our commitment to the securities processing business, but also underscores our determination to provide our clients with the enhanced products and services they need to meet the competition of the global market.'