Journal Communications Inc. is a diversified media and communications company that is America's oldest employee-owned company. At the end of 1999, more than 7,000 Journal Communications people were working at one of seven operating companies and at locations in 24 states and in Europe.

This follows State Street's recent agreement with Merrill Lynch to provide a similar set of service solutions. Upon signing of the final agreement, State Street is expected to retain a majority of the employees in Liberty Financial's fund accounting unit. The transition is expected to be completed by February 1, 2001.

Liberty Financial is an integrated asset accumulation and management organisation. As at September 30, 2000, its operating companies managed over USD77 billion of assets for investors worldwide through an array of fixed, indexed and variable annuities, private and institutional accounts and mutual funds.

12DEC00: More proof, if it were needed, that the outsourcing market is alive and kicking. Mellon Financial Corporation and The TCW Group, Inc. (TCW), a USD85 billion asset management firm based in Los Angeles, have announced that Mellon’s Global Securities Services group has been selected to provide investment operations support and custody services for TCW’s investment advisor subsidiaries, including The Trust Company of the West.

Through this agreement, Mellon will support all of TCW’s investment operations, including trade communication, reconciliation, valuation services and client reporting. In addition, Russell/Mellon Analytical Services will provide performance measurement and attribution services across all TCW client accounts. For the past year, Mellon has been providing investment operations and support for certain of TCW’s brokerage-distributed managed accounts programs. Mellon also will offer employment to approximately 120 TCW employees to service the business, effective Jan. 1, 2001.

‘Partnering with Mellon will enable us to focus our resources on our core competency of asset management, while also ensuring that we are always providing our clients with state-of-the-art account services,’ said Marc I. Stern, TCW’s President. ‘We selected Mellon because of its long experience in providing outsourcing solutions to clients, its experienced staff of investment support professionals, and its strong commitment to technology given significant industry challenges such as straight-through processing, T+1 settlement and real-time client reporting. We believe Mellon has the ability to add significant value to our platform as we continue to grow.’

Mellon has had an established back office outsourcing product for more than 10 years and currently administers more than USD360 billion in outsourcing assets representing 25 client relationships.

DTCC called for the conference in a recent white paper on central counterparties (CCPs), which said that a global clearing solution was needed to help lower costs, reduce risk and facilitate the growth of trading in a wide array of financial instruments worldwide.

‘The response to our white paper has been extremely positive,’ said Jill M. Considine, Chairman & CEO of DTCC. ‘The fact that these leading clearing houses have joined us is indicative of the industry’s commitment and strong sense of urgency in finding a global solution to cross-border clearance and settlement. We believe this conference will encourage the type of dialogue and partnering needed to develop a truly global perspective."

The ten clearing organisations in Europe, Asia and the Americas that have agreed to co-sponsor the conference are:

Clearnet^SBFSA, Eurex Clearing AG, London Clearing House, Hong Kong Exchanges and Clearing Limited, Singapore Exchange Limited, Tokyo Stock Exchange, The Brazilian Clearing and Depository Corporation, The Canadian Depository for Securities Limited, The Depository Trust & Clearing Corporation, The Options Clearing Corporation.

'We have the tried-and-tested technology and also have the critical mass that no other European clearinghouse has to offer today,' said Nägeli. This combination positions Eurex Clearing as the best solution for the market, he added. So – as long as ESF chooses Eurex Clearing over the other two, there’s no problem, right?

The formal search, which began in June this year, had narrowed to three providers when the decision to appoint Northern Trust was made. According to Ciba’s Director of Human Resources, Mark Wright, ‘The decision was made on the basis that we felt Northern Trust would be a good fit with Ciba and they are an organisation with whom we would feel comfortable working’.

However, ESF has stepped back from its former position, and has now decided that, before issuing an RFP, it will try once more to get the existing clearing houses in Europe to respond to the blueprint and propose workable solutions to the ESF either independently or, preferably, in partnership. ESF says that ‘a formal RFP will not be issued as long as rapid progress with these service providers is achieved’. As part of the discussions with the service providers, the ESF will sponsor a technical assessment and evaluation to benchmark existing IT solutions of the European clearing houses against the criteria of its blueprint.

This more conciliatory approach has the fingerprints of Pen Kent, ESF’s executive director, all over it. Kent was dismayed by negative reactions to the strident attitude of some of his members, and would clearly prefer to see a deal struck with the existing market CCPs.

The Corporate & Institutional Clients Group will combine all of Deutsche Bank's corporate and investment banking, real estate and institutional businesses. This group will concentrate all securities services, cash management and trade finance businesses as Global Transaction Services, ‘underlining Deutsche Bank's determination for leadership in this area’. This appears to spell the end for the Global Institutional Services division, run by Jim Zeigon from New York, who reports to Hermann-Josef Lamberti, head of Global Technology and Services and a member of the board of managing directors.

The Asset Management & Private Clients Group will comprise all of the asset management businesses and private client businesses including Deutsche Bank 24, Private Banking, DB Alex. Brown Private Client Services and other retail distribution. Further focus will be given to aggressively building e-brokerage and alternative investment capabilities and harmonising infrastructure and investment processes.

The ViewFinder PI product was codeveloped with leading US technology software provider Bottomline Technologies. Portfolio Information provides an extensive suite of easily accessed standard reports, offers clients the flexibility of importing custody report data into reportwriter, spreadsheet, or word processing software, and also offers unique customisation features at the individual user level. Portfolio Information is accessed from any location, worldwide, using standard web browser technologies.

ViewFinder provides other web-based information tools for global market information, performance measurement and dividend reinvestment plans to GSS clients. Significant releases for the ViewFinder product suite will continue in the coming months, including trade settlement instructions planned for early 2001.

Picciotto will spearhead the regional roll-out and development of Global Link, State Street's unique, open network designed to help investment managers maximise efficiency, reduce risk and optimise returns. Global Link achieves this through a broad array of e-finance applications and services with full connectivity to institutional customers' chosen trading destinations. The system currently provides over 261 asset management companies in 21 countries with industry-leading research, analytics and trade execution services across multiple assets and markets. Global Link's clients collectively manage over half of the world's professionally managed cross-border assets.

In this new position, Picciotto will also define and execute State Street's strategy for expanding Global Link's capabilities through partnerships with key institutional investor service providers in the region. Picciotto has served as Senior Vice President and Managing Director of State Street's Tokyo branch where he was responsible for all operations of the branch. He joined the Tokyo branch as Vice President and General Manager in 1996. Picciotto first joined State Street in 1988 with responsibility for developing the European and Latin American trade banking markets for the bank.

The team will be led by Andrew Muir, who has been named director, Mercator GSS. Muir, who has more than 20 years of experience in the financial services industry in both marketing and technical positions, joined Mercator in 1995 from Thomson Financial Services, where he played a key role in the launch of OASYS Global, the world's leading electronic trade allocation and acceptance service. Prior to that he headed investment management systems development at Fidelity International and helped establish the standards for Electronic Trade Confirmation in London as a member of the original Industry User Group.

The launch of Mercator GSS will coincide with the introduction of the GSTPA Transaction Flow Manager (TFM), a critical component of the GSTP architecture defined by the Global Straight Through Processing Association. TFM is scheduled for pilot testing April 2001. Mercator GSS includes real-time integration with the GSTPA TFM, a real-time facility for message repair, message tracking, and error processing, and Mercator's ISO15022 metadata repository, which provides full architectural compliance with the new SWIFT guidelines for securities transaction processing.

Lund, 43, was formerly the Chief Executive of Virgin Direct, the joint venture between Australian financial services group AMP and Virgin. Prior to joining Virgin Direct, Mark was a main board Director of fund management group Henderson Investors plc and head of its Global Retail business. Mark was with Henderson for nine years, progressing from a role in Corporate Development through roles as Managing Director of Henderson International; Managing Director Pension Funds; Managing Director Unit Trusts and Managing Director Global Retail Business.

FundsHub has recently announced plans to move into Germany and Italy, and is currently working with its first UK client, Bradford & Bingley.

30NOV00: Chase's Global Investor Services (GIS) division is finishing the year in style, having just been appointed by the Railways Pension Trustee Company Limited (RailPen), the UK railways industry pension scheme, to provide global custody for USD10 billion of assets. The mandates comprises all the assets managed by Deutsche Asset Management, Fidelity, Fischer Francis, Credit Suisse, Foreign & Colonial, Prudential and Schroders. RailPen was advised by Thomas Murray Limited. The Railways Pension Trustee Company Limited is the trustee of the railways pension fund, with total assets of GBP16.5 billion. Chase now works with 5 of the 6 largest pension schemes in the UK market, having recently won mandates from British Telecom and the Post Office.

The Bank of New York is understood to have retained its existing custody mandate for RailPen, with Chase's assets thought to be moving from Deutsche Bank. No announcement has yet been made about securities lending arrangements.

Advisor Custody is a specialised unit that provides safekeeping, advisory and administration services to investment advisors. The unit, which services approximately USD27 billion in assets, will become part of Investors Bank & Trust Company, a wholly owned subsidiary of Investors Financial Services Corp. Upon completion of the transaction, assets processed by the company for clients will total over USD338 billion. Investors Financial expects the transaction to be completed during the first quarter of 2001.

All 58 employees of the Advisor Custody Unit will be offered the opportunity to remain with the business as employees of Investors Bank & Trust Company.

The Commonwealth of Virginia Treasury Department account is comprised of three separate components, the assets of the State of Virginia Treasury, the Virginia Lottery and the Local Government Investment Pool.

Verizon was formed as a result of the merger between Bell Atlantic and GTE. Mellon currently administers USD60 billion in Bell Atlantic defined benefit, defined contribution and affiliated plan assets, bringing the total assets administered by Mellon for Verizon to USD77 billion. Verizon also named Mellon Institutional Asset Management as the newest member of its Strategic Partner Network (SPN) to manage a portion of its pension plan assets.

Under the appointment, Citibank will provide securities settlement services for the Labuan International Financial Exchange and its trading agents, and U.S. dollar cash clearing services through its New York office. Citibank will act as an agent of Labuan International Financial Exchange to provide settlement and depository services to LFX and its participants who may be listing sponsors, trading agents and investors.

LFX is a web-based exchange that will trade US Dollar-denominated financial instruments and securities. Given its offshore status operating in Malaysia's offshore financial centre of Labuan, LFX is not subject to the onshore selective capital controls and will be regulated by the Labuan Offshore Financial Services Authority (LOFSA), rather than the Malaysia Securities Commission.

The answer is beginning to emerge. IMRO, the Investment Management Regulatory Organisation, has fined Lloyds TSB Bank plc GBP100,000 for breaches of regulatory rules in its Securities Services Division. The firm will also pay costs to IMRO of GBP115,000. The breaches concerned failures in the completion of customer asset reconciliations and the organisation and control of its custody business. These problems occurred between 1 June 1997 and 31 December 1998. IMRO says that the Securities Services Division failed to maintain adequate security arrangements for bearer stocks held in its custody for customers. It also failed to perform adequate reconciliations, resulting in insufficient protection for customer assets in its custody. The catalogue of errors and oversights is long and painful, and many of the Lloyds TSB managers responsible for the business should be hanging their heads in shame.

'David is a proven business builder and leader who brings significant global experience to Merrill Lynch,' said Richard Dunn, president and chief executive officer of MLSSD. 'In this role, David will lead a team focused on the delivery of an integrated custody, clearance and middle-office function as an outsourcing alternative to these clients. Our institutional and money-management clients are constantly seeking to maintain their competitive position and continue building the assets they manage while keeping operational costs low. Our investment manager client channel, with David at the helm, will assist these clients with a broad range of infrastructure and other operational business solutions," Mr. Dunn added.

MLSSD was formed in April of this year to focus on the expansion of Merrill Lynch's securities clearing, custody and financing businesses, but it has been slow to elaborate on its target market or overall strategy.

Francis Jackson, Head of Global Custody Product Management, WWSS said: 'The appointment of Hansa Bank in Lithuania adds to Citibank's existing presence in the region and renders the bank a true regional provider in the Baltic States. We are also pleased to announce our expansion into Slovenia - where we will expand our existing relationship with Bank Austria. The appointments increase our network to over 70 countries throughout the world, and we look forward to announcing further expansion in the near future.'

Iain Saunders, the Deputy Chairman of CFAM, will retire during the first quarter of 2001 after a career of 29 years with Flemings. Colette Bowe, Chairman of Save & Prosper and FFML, will leave CFAM one month after the closing of the JPM/Chase merger transaction, as will Stuart Dyer, Chief Operating Officer of Save & Prosper.

The senior management of CFAM claim that they are, 'in conjunction with colleagues at JP Morgan Investment Management, working on plans to ensure the success and competitiveness of the combined businesses into the future'.

14NOV00: The Bank of New York has enhanced its tri-party repo and global collateral management services for the European marketplace by establishing a real-time, direct link with Sicovam, the French CSD which will shortly merge with Euroclear. This link is powered by The Bank of New York’s proprietary collateral management system, RepoEdge.

The Bank of New York can now provide integrated servicing of both global fixed income and equity holdings of its broker/dealer clients, whether at Sicovam, the Federal Reserve Bank, DTC or Euroclear. This will enable clients to optimise their use of global securities to raise the financing they require or collateralise securities borrowing by entering into a BNY tri-party arrangement.

AMCORE Financial, Inc. is a financial services company with banking assets of USD4.4 billion and 64 locations in Illinois and Wisconsin. AMCORE Investment Group, a subsidiary, provides trust and brokerage services and, through Investors Management Group, provides capital management and mutual fund administrative services, and is the investment advisor for the Vintage Family of Mutual Funds.

‘The success of brokers depends on the quality of their clearing operations. We spent many months researching clearing systems and determined that BNY Clearing was by far the best,’ said Thomas J. Evankovich, BondHub founder and CEO.

08NOV00: BNY Clearing Services LLC, a subsidiary of The Bank of New York, has agreed to acquire the correspondent clearing business of Schroder & Co. Inc. from Salomon Smith Barney Inc. The transaction is subject to regulatory approval.

Michael Viviano, chairman and CEO of BNY Clearing Services, commented: 'This acquisition is another example of The Bank of New York’s strategic commitment to its correspondent clearing and securities servicing businesses, and it provides a new opportunity for us to leverage our global operating and technological infrastructure. Salomon’s decision to exit the correspondent clearing business represents an excellent opportunity for us to establish new client relationships, acquire talented people and add valuable product capabilities.'

BNY Clearing Services LLC is a brokerage subsidiary of The Bank of New York and provides securities clearing, execution, and settlement to broker/dealers, banks and other financial intermediaries throughout the world. It is a member of The New York Stock Exchange and other principal exchanges, the National Association of Securities Dealers, and the Securities Investor Protection Corporation. Its international affiliate, BNY Clearing Services International Ltd., is a member of the London Stock Exchange.

The Vietnamese market has often been cited by custodians as one with high potential, but the first trading session of the Securities Trading Centre only took place on 28^th July this year. Trades are cleared on a T+4 cycle. The market is open on Mondays, Wednesdays and Fridays. The volume for each trading session volume is about USD100,000. To date, four company stocks and three bonds are listed. The total value of the stock market is approximately USD100 million. So far, about 20 foreign investors and 2,000 local investors have opened share trading accounts.

Seven local securities brokerage firms are currently allowed to offer custody services to local investors. Besides Deutsche Bank, two other foreign custodians, HSBC and Standard Chartered, have obtained a custody licence.

The Diageo Scheme had previously used RBS Trust Bank, which was acquired by The Bank of New York in November 1999. BNY has recently suffered two losses of major UK clients - Hermes and Scottish Widows - and the retention of Diageo will be an important boost to morale.

Lumpkin has served in various capacities in City government since 1995: from June 1999 to April 2000, she served as City Treasurer and was Budget Director from February 1998 to June 1999. From August 1995 to January 1998, she was City Comptroller where she managed all fiscal matters for the City. Both as Treasurer and Comptroller she was a trustee on City pension fund boards. Prior to serving in City government,   Lumpkin was associated with both Amalgamated Bank of Chicago as Senior Vice President/Corporate Trust Manager and with Continental Bank serving in several areas including Corporate Trust.

Bond Connect is an electronic fixed-income marketplace designed to address limitations in the traditional trading environment. Operating as a multi-security call auction, Bond Connect's unique call auction structure aggregates liquidity in an anonymous trading environment that offers cost-effective execution of single securities, swaps and portfolio orders. One hundred of the largest institutional firms in the fixed income market have committed to use Bond Connect. Bond Connect's coverage includes investment grade and high-yield corporate bonds, mortgage-backed securities, asset-backed securities, CMOs, and U.S. Treasuries and Agencies. CMBS trading is expected to be available on Bond Connect in December 2000.

SEE ANALYSIS PAGES FOR MORE DETAILS ON THIS STORY

23OCT00: This news has a trying inevitability about it. The 24 members of the European Securities Forum (ESF) have agreed to press ahead with a plan to create a single central counterparty for Europe. The aim is to provide an inclusive facility for netting all securities, including equities, bonds and derivatives though priority will initially be given to equities. Its form will match the existing ESF principles for a central counterparty (CCP).

This initiative has been led by five banks - Deutsche, Citi, UBS, Goldman Sachs and Morgan Stanley - which are frustrated by the lack of progress to bring together the three major European counterparties, LCH, Eurex and Clearnet.  These banks have been talking informally to DTCC, the US depository, about how to proceed. DTCC already has a stake in European clearing through its participation in the European Securities Clearing Corporation.

Pen Kent, Chairman of ESF, said: 'This plan is an industry initiative, which needs wide support to increase its momentum. It makes sense to focus industry aims on a single plan. Our next step is to produce a detailed blueprint, hopefully by the end of the year. We will then issue a Request for Proposal to any service provider or other party interested.'

The ESF release added: 'These moves follow disappointing progress with an alternative approach by the ESF to persuade existing service providers to come together to create a single CCP for Europe. ESF would still prefer a constructive outcome involving all those parties but it will consider other alliances or a go-it-alone solution. No decision has been taken on a choice of implementation partner as yet. In the meantime ESF's Regulation Working Group in collaboration with the European regulators will address regulatory issues relating to a single CCP.'

Deirdre Ecock will serve as manager of the Luxembourg office and will report to Joan Kehoe, managing director, PFPC International Ltd. PFPC International Ltd., based in Dublin, Ireland, has served the international funds community since 1993. PFPC is a member of The PNC Financial Services Group, Inc., which is headquartered in Pittsburgh.

20OCT00: The Chase Manhattan Bank has been selected by Exel Retirement Plan (formerly NFC Retirement Plan) to provide global custody for approximately GBP1 billion of pension fund assets.

'Chase was a natural choice, our existing relationship and service provision told us that we were moving to a market leader. The move to a global custodian is connected to the trend being set by investment managers but in so doing we are able to obtain consolidated reporting and to experience Chase's broad array of products and services if required,' said Jimmy Walker, Pensions Manager (UK) from Exel.

We have enjoyed a great relationship with Exel over a number of years and we’re absolutely delighted they have selected us to consolidate the remainder of their segregated pension assets,' said Sue Curtis, business manager for the EAME Pensions and Middle East Client Management Group of Chase Global Investor Services.

CRESTCo also announced that it is expanding the range of shares handled to include Eurotop 300 securities, a move which it claims will result in the significant reduction in the costs for UK investors trading in Europe’s biggest companies. In addition CRESTCo, which has already announced low-cost settlement in the top Nasdaq 100 securities, is expanding its service to include the whole range of Nasdaq traded equities – a total of nearly 5000 companies. Both these initiatives will come into effect on Monday October 23.

ChaseMellon, which was formed in 1995, is a leading provider of shareholder services and related securities services. It serves more than 2,000 companies in the US and maintains more than 20 million shareholder accounts for small, middle market and Fortune 500 corporations.

Adrian White, joint deputy chief executive and chief operating officer of Hermes, said: 'As you would expect with a mandate of this size, we conducted an extremely thorough review of our global custody arrangements. During the selection process the virtues of Chase became increasingly apparent. Their net assets, credit rating, client base and senior management commitment all contributed to our decision to recommend them to the Trustees. We look forward to working with them.'

The investment administration functions of four component businesses - Lloyds TSB Life, Pensions and Investments (Andover), Abbey Life (Bournemouth), the former Hill Samuel Asset Management (London) and Scottish Widows (Edinburgh) - will be integrated and outsourced to State Street. As part of the relationship, State Street will assume responsibility for some parts of Scottish Widows’ existing operations in the UK, which will be integrated into the State Street operational infrastructure.

When Lloyds TSB withdrew from the custody business last year, it recommended State Street as the preferred provider for its clients. But there was also an agreement between the two banks concerning Lloyds TSB's in-house business, and this mandate is a culmination of those negotiations.

Mike Ross, Chief Executive of Scottish Widows, said: ‘Since Scottish Widows joined the Lloyds TSB Group, we have been working on a detailed programme of integration of our life, pensions and investment businesses in order to facilitate our ambitious plans for future growth. In line with that, the integration of the investment administration functions of four component businesses and the transfer of custody and trustee services to a single supplier platform represents a significant step forward for the new Scottish Widows. Moreover, I am confident that State Street will not only enable us to secure efficiencies, but will also help us to maximise the synergies to be derived from the creation of such a single platform so that there is the highest quality of service to our investment management teams and external clients.’

The Tier II capital is comprised of EUR250 million Lower Tier II 10-year subordinated debt and EUR250 million Upper Tier II perpetual debt. The issues were launched on September 11 and closed on October 4. When added to the Bank’s Tier I capital of over EUR450 million, made up of shareholders’ funds and retained earnings, the total capital base of Euroclear Bank will be approximately EUR 1 billion.

05OCT00: Brown Brothers Harriman (BBH) Foreign Exchange has appointed Henry Wilkes as senior vice president and European head of sales and marketing in London. Wilkes was previously Senior Vice President and Head of Trading at Bank Julius Baer in London. The new London sales desk has been established in response to increased client demand for local sales and research services as BBH extends its presence in Europe. Stacey Seltzer, research analyst and customer relationship manager, has relocated from BBH in New York to London to provide daily economic commentary as part of this strategy.

05OCT00: The Chase Manhattan Bank's Global Investor Services (GIS) division has appointed Annaick Dulac and Louise Diepenhorst to its continental European sales team.

Annaick Dulac has been appointed as sales representative to cover the French market. Previously Dulac spent three years as a derivatives sales executive at HSBC in London; prior to that she fulfilled a similar role at NatWest in London and Deutsche Bank in Paris.

Louise Diepenhorst will work alongside Nadine Lagarmitte, Head of Continental Europe Sales, in the Benelux markets. Prior to joining Chase, Louise spent 3 years at ABN-AMRO where she worked in sales and relationship management marketing cash and liquidity products.

Giuseppe Lalli, general manager of foreign operations for Gruppo Mediolanum, said: 'We selected State Street because we feel confident that, as one of the leading securities lenders in the world with an unparalleled knowledge base, State Street is best positioned to help us optimise the performance of our international portfolios.'

HSBC Bank Kazakhstan is a wholly-owned subsidiary of the Hong Kong and Shanghai Banking Corporation Ltd. The company began offering sub-custody services to foreign institutional investors in late 1999. Stanbic Merchant Bank Nigeria Limited is a 90%-owned subsidiary of Standard Bank of South Africa Limited. Stanbic Merchant Bank is the first bank to offer custody services to non-resident investors in Nigeria.

The PensionMetrics Risk Universe allows institutional investors to evaluate their risk profile relative to other large funds. Each risk calculation is a Value at Risk (VaR) estimation for a plan's overall risk level, highlighting predictive risk for various confidence intervals and time horizons. The Universe was constructed using tools and methodology from the RiskMetrics Group.

The results of the PensionMetrics Risk Universe and methodology used to create it are available free of charge from the Northern Trust web-site at http://www.northerntrust.com/riskuniverse/ . Northern Trust and RiskMetrics will encourage other plan sponsors and custodian banks to contribute data to the universe in the future.

• Features to determine if changes in Value at Risk (VAR) come from a client’s changes in position, from changes in levels of market volatility, or a combination of these factors,
• Customised graphics allowing users to track important risk measures over varied time periods, and
• Enhanced international and domestic equity analysis, allowing for integration of single stock risk analysis with interest rate, currency and commodity risks at the individual and aggregate portfolio levels.

db RiskOffice retains all of RAROC 2020’s market risk measures and methodologies, including risk factor exposure measurement and Monte Carlo-style Value At Risk. db RiskOffice risk analysis experts use sophisticated risk measurement software to analyse client positions and then provide them with the resulting risk reports, as well as interactive reports and "what-if" scenario analysis tools through an encrypted internet application. As the service requires only for the client to have an Internet browser, db RiskOffice clients can rapidly implement the service with minimal time and cost.

db RiskOffice is part of the Bank’s Global Investment Analytics business in its Global Institutional Services division and is separate from the Firm’s investment banking and asset management divisions. db RiskOffice currently conducts risk reporting for more than $500 billion in client assets.

Both Mellon and Brown Brothers Harriman are currently clients of HSBC Global Investor Services. BBH stressed that it is appointing Clydesdale Bank as an additional custodian, rather than as a replacement for HSBC, but Mellon is thought to be making a total switch. In this year's Global Custodian agent bank review, widely seen as the industry's most important benchmark, HSBC could only come second behind Citibank as a UK custodian and recorded lower scores from respondents for the fifth year in a row.

In Dublin, Harley Murphy has been appointed as managing director of Mellon Fund Administration (Dublin) Limited. He will be responsible for controlling and expanding the day-to-day operations of Mellon Fund Administration in Dublin, together with the implementation of Mellon’s initiative in serving the offshore markets in Dublin and Luxembourg. Murphy is a qualified accountant and has more than twenty years experience in banking, most recently with ABN AMRO in Singapore, Dublin and Amsterdam.

In London, Stewart Copland has been appointed head of new business for Mellon's fund accounting, transfer agency and funds supermarket businesses. He joins Mellon from KPMG where he was principal consultant in the Investment Management Group for the last five years with responsibility for sales and delivery of major consulting assignments. Prior to that he was with PriceWaterhouseCoopers, Fidelity International and Ivory & Sime.

Tim Harrison becomes Mellon’s head of marketing services. He joins from Abbey National, where he was a senior Manager in the Corporate Affairs team. He will take on responsibility for Mellon’s marketing and communications function.

Conor Hoey is appointed head of pensions new business, charged with the sales and marketing of Mellon's new Defined Contribution administration capability. Previously senior consultant in Bacon & Woodrow's defined contribution Team, he was one of B&W's foremost experts on stakeholder pensions. Prior to this he spent six years with Prudential where he held a variety of roles in the UK Corporate Pensions, Banking and Corporate Strategy areas.

State Street is very bullish about its prospects for this market, with one of its senior managers recently suggesting that it will become the first or second largest unit trust trustee in the UK within a year. This optimism may be based on the fact that it expects to win a substantial further amount of business from Lloyds TSB. When the latter pulled out of the business last year, it said that State Street would be 'the preferred provider of custody, trustee and administration services for the Lloyds TSB Group’s proprietary business’. So far State Street has picked up about USD75 billion of Lloyds TSB’s proprietary and third party assets.

Robeco has recently taken the decision to outsource its entire bank office, including fund accounting. Ir. Gery Daeninck, Chief Finance and Operations Officer of Robeco, said: 'The decision is in line with the Robeco Group's aim of outsourcing non-core activities to create flexibility and a variable cost structure. This offers the Robeco Group the opportunity to focus on its core business: asset management and distribution. Citibank has a strong custody network and offers the Robeco Group interesting opportunities in other fields.'

Sandy Jaffee, executive vice president of WWSS, commented on the appointment: 'Citibank is extremely pleased to be appointed global custodian to the Robeco Group, who constitute one of the world's largest asset managers. Our product capability as a truly global bank clearly matched Robeco's requirements as a Group, with a similar global footprint. This appointment brings Worldwide Securities Services' assets under custody for Dutch investors to over USD120 billion.'

Littleboy has now been hired by Pareto Partners, the currency overlay specialist, as chief operating officer, a newly created position. Littleboy will report to Mitchell Harris, Pareto's London-based chief executive. Most recently he has been in a senior operations and technology role for Citi in Germany. Wouldn't it be fun if Chase has a custody relationship with Pareto?

The outsourcing arrangement, which potentially adds more than AUD60 billion in new assets under administration to Chase, also includes transition of BT’s master custody clients and will lift Chase from number two to number one in the master custody tables. The new arrangement means all BT master custody staff will transition to Chase. Existing service standards for BT and other external clients will be maintained or improved.

BT Chief Executive Ian Martin said: 'This business is about global scale. Under our previous parent company Bankers Trust New York it made sense for our Australian operation to specialise in master custody, but now with the Principal Financial Group our focus is on global asset management and related financial services. Our priorities include funds management, super master trust administration and wrap services. In the area of master custody we will now benefit from Chase’s global capabilities.'

13SEP00: Thomson Financial ESG has formed a partnership with The Chase Manhattan Bank to launch four new information management services in Q4 2000/Q1 2001. The market fees & taxes service and the settlement date calculator (due out in Q4 2000) as well as Chase Market Reports and Settlement System Market Practice Assessments (due out in Q1 2001) will  expand the suite of ESG’s information management solutions, known as Intelligent Trade Management (ITM). Chase Global Investor Services will provide data and analytics for the services mentioned.

Thomson Financial ESG will offer all four services via a Web portal, creating a single source of global market information. The new services will be part of the ESG/DTCC joint venture’s future service offerings. Plans are to facilitate trade enrichment through the future central match service by Q1 2001 using the market fees & taxes service and the settlement date calculator. The new services will be available on an annual subscription basis.

09SEP00: Peter Jacaruso has been appointed as Head of Product Development for Deutsche Bank's Global Securities Services business. Jacaruso will be based in London and will report to Jürgen Marziniak, the Head of Global Securities Services. In his new role, Jacaruso will have global responsibility for product development covering Europe, Asia and the Americas for GSS.

Jacaruso was previously with Clearstream Banking where he spent the last five years focusing on a wide number of product development and product management initiatives for the Luxembourg-based international central securities depository. Before joining Clearstream, Jacaruso spent ten years at Citibank where he was a founding member of Citibank’s Worldwide Securities Services Division helping to develop the various domestic products into a global product offering at Citibank.

Nolan was part of the JP Morgan team that moved to Paribas in 1995 when the French bank took control of Morgan’s European custody network, and is currently deputy business manager for BNP Paribas’ European Investor Services division. She had worked for Morgan since 1989, and was previously at Chase. She will take up her new position at MLSSD in October.

MLSSD was launched in May, but to date it has been remarkably vague about its intentions for the business. Other broker/dealers that have dabbled in the custody world have enjoyed mixed fortunes: Morgan Stanley eventually sold its custody operation to Chase, whilst Goldman Sachs never got its own project off the runway, despite hiring Robert Kay - who had set up the Morgan Stanley operation - to establish it.

Wright has five Operations Divisions with 50 staff reporting to him, including Valuations and Fund Accounting, Registrations, Settlements, Control, and Information Technology. Wright has been with Northern Trust’s Global Operations in London for the last three years, prior to which he was Head of Administration at AXA Equity and Law Investment Managers. Wright has been in the securities industry for over 15 years.

22AUG00: Northern Trust Canada was named custodian to Schlumberger Canada’s CAD90 million pension and profit sharing trusts. The assets have already been transferred. Schlumberger has been steadily consolidating all its pension plan assets with Northern.

Schroders first started looking at the prospect of outsourcing back in 1997, when both Chase and State Street were asked to bid. But the process was overtaken by events and, by the time Schroders was ready to act, it was too close to Y2K for comfort, and a decision was deferred. Now Schroders says that the move will bring significant benefits to both itself and its clients, allowing it to focus on its core business of investment management and client service, improving its ability to offer more sophisticated products and technology to clients, and enabling it to focus its systems spend on areas which give it a competitive advantage. These three benefits are routinely cited by custodians as strong reasons to consider outsourcing.

Approximately 200 staff will be transferred from Schroders to Chase Manhattan as part of this deal. There will be no redundancies related to this move, which involves assets of GBP75 billion (USD113 billion). Chase already acts as custodian and trustee to approximately £25 billion of Schroders’ unit trust and pooled vehicles around the world.

Mark Smith, Operations Director of Schroders, said: ‘Schroders has a clear set of strategic objectives, at the heart of which is a total commitment to investment performance, coupled with the provision of efficient and responsive client service. This partnership with The Chase Manhattan Bank will provide significant benefits to our clients in ensuring the highest quality of administrative support to our core business of investment management.’

As part of its expansion, State Street has hired a St. Louis-based team to direct the business. Kevin Jones will join State Street to head the office and lead a team of six. Jones brings nineteen years of experience in the trust and financial services industry to State Street. Most recently, he served as a director responsible for regional offices in Dallas, Los Angeles and St. Louis for Bankers Trust Company (now Deutsche Bank). Jones will report to Patrick Centanni, senior vice president at State Street. Other members of the team joining State Street include Norine Flaherty, Claire Douglass and David Dahm, who each have over twenty years' experience in the institutional trust business previously working for St. Louis-based Boatmen's Trust Company.

The St. Louis office is the third regional office to open in the past year to service the middle market business. State Street recently opened offices in Winston-Salem, North Carolina and Atlanta, Georgia to service the institutional trust and custody business it acquired from Wachovia Corporation in October 1999.

‘Bill has developed an excellent reputation during his three decades in the financial services industry,’ Dirks stated. ‘He brings a unique and valuable blend of talent and experience to our senior management team. I also know his ability to keep DTCC and its subsidiaries focused on improving the way it delivers services will prove an asset to the industry, as well.’

Aimetti was most recently executive managing director-Operations, Technology & Corporate Services at Nomura Holdings America, Inc./ Nomura Securities International. Inc. He joined Nomura in 1994 and also served that organisation as president and chief executive officer of Nomura International Trust Company, a subsidiary of Nomura Holdings America.

Prior to that, Aimetti was a division executive for Citibank, where he was responsible for all operations and technology for that institution’s North American Global Finance division, which included treasury products, capital markets, international corporate finance, debt restructuring and equipment financing and leasing. He has also been a key member of the operations divisions of both the Securities Industry Association and the New York Clearing House and was a Board member of Cedel (now Clearstream).

'Deutsche Bank is dedicated to building a new generation of Custody and Investor Services products in India to meet the new and growing demands from Institutional Investors on shore. This acquisition allows us to further strengthen our presence in this market and leverage opportunities arising from scale to produce real benefits for our institutional clients,' said Roger Harrold, Chief Operating Officer – Deutsche Bank Asia, Global Securities Services.

In this partnership, Deutsche Bank will offer custody and trustee services, cash management services and international securities and fund administration services, complementing the services offered by A Brain, the market leader in Korea as an independent provider of fund accounting and administration services and transfer agency services.

A Brain started its fund administration operations in Seoul in February 2000. The business was formed between four owners - Kookmin Venture Capital, LG Venture Capital, Hyundai Venture Capital and Cheiljedang. Deutsche Bank is participating in this alliance through its Global Securities Services business arm, a unit of the Global Institutional Services.

Deutsche Bank set up its local custody business in Korea in 1994. 'We view Korea as one of the most attractive markets in Asia,' noted Jürgen Marziniak, Deutsche Bank’s head of Global Securities Services. 'The alliance yet again demonstrates the Bank’s long term commitment to the region.' In May this year, Deutsche Bank made an announcement regarding the stake it took in The Master Trust Bank of Japan.

Now it has announced that it is to assume all fund accounting and daily pricing services for Merrill Lynch's US retail mutual funds, comprising 227 portfolios with a total asset value of approximately $200 billion. State Street will be responsible for calculating 620 net asset values for these funds on a daily basis. Upon signing of the final agreement, State Street will assume Merrill Lynch Investment Managers' fund accounting centre in Princeton, NJ, and will retain approximately 300 of Merrill's employees. The transition is expected to be completed by year-end.

'As a leader in the increasingly competitive investment arena, we are pleased to be among the first to outsource our fund-accounting operations at this level,' said Terry Glenn, Chairman of Merrill Lynch Investment Managers (Americas). 'This strategic alliance will not only help us control operating costs, it will enable us to focus on our core business of asset management and continue to provide superior service to our clients. Our long-standing relationship with State Street and the company's superb track record in providing fund services were instrumental in our decision to ask them to provide this total outsourcing solution.'

Noting that State Street has provided global custodial services to Merrill Lynch since 1974, Ronald E. Logue, vice chairman and chief operating officer of State Street Corporation, said: 'We are pleased to have the opportunity to significantly expand our relationship with a world class institution like Merrill Lynch. The surge in trade volumes and cross-border investments, along with the industry's decimalisation and T+1 initiatives, are creating unprecedented demand for a total investment fund servicing solution. State Street's unparalleled ability to provide a complete range of investment services at scale to asset managers across the globe uniquely positions us to meet this growing market demand.'

'Based on the interviews we conducted, and the responses we received from the T+ 1 survey, we feel that this is a reasonable target date,' said Diane Frimmel, executive vice president of PaineWebber Group, Inc. and chair of the SIA's T+1 Business Case Subcommittee. Both the Fed and the SEC had suggested that they would like to see T+1 by 2002, although this target date was never formalised.

The study also estimates that the entire industry will have to spend USD8 billion to prepare for T+1, which includes testing and the necessary systems changes.   It suggests that there is an annual savings opportunity for the industry of approximately USD2.7 billion, realised through resulting changes such as redeployment of resources, improvements in the matching and settlement process, reduction in the need for physical certificates and improved methods for the delivery of prospectuses.

Andersen Consulting and The Capital Markets Company interviewed industry executives by means of a web-based survey. Fifty-six firms, representing both retail and institutional broker/dealers, custodians, and asset managers responded to the survey, which asked about the firms' readiness and systems changes necessary for the conversion. The respondents represent 75 percent of the equity capital of SIA member firms and 20 percent of assets under management industry-wide. Of the 20 firms whose input was deemed critical to the survey, the response rate was 100 per cent. The major exchanges, key regulators and the Depository Trust And Clearing Corporation provided input through interviews.

In a parallel development, the Belgian Banking and Finance Commission has granted a banking license to Euroclear Bank, authorising it to pursue banking activities in Belgium and throughout the world.

Receipt of the ratings and license clears the way for Euroclear Bank to proceed with the issuance of subordinated debt capital of approximately EUR500 million, representing around half of the new bank’s total capitalisation of approximately EUR1 billion. ABN AMRO and Deutsche Bank have been mandated to act as co-lead managers for the offering.

Euroclear Bank is scheduled to become operational early in 2001. The merger with Sicovam SA, the central securities depository of France, is also scheduled to become effective upon the transfer of these roles to Euroclear Bank.

Prosser was responsible for the design, development and implementation of Clearstream's new IT platform, Creation, and the day to day operations of securities settlement. The Creation platform integrates end-to-end processing through the three main functional business areas of clearing and settlement, custody, and connectivity and reporting.

In his new role - which is effectively the same as the one previously performed by Terry McCaughey - Prosser will focus on the commercialisation of the Creation platform to both present customers and a wider market audience. He will also continue in his role as chairman of Clearstream Services. Yves Baguet, who worked closely with Prosser on the design of the Creation platform, has been appointed managing director of technology.

Kirby's decision to leave comes at a time when GSTPA's initial round of fund-raising has been an unexpected success, with more than USD80 million pledged by GSTPA's members. But Kirby is known to have been perplexed by the recent DTCC/Thomson initiative, which threatens to slow progress on building GSTPA's transaction flow manager and fragment the market. His successor has not yet been announced, although market sources suggest that David Gilks, who recently joined Chase from AXA, would be the ideal candidate.

In this new post, Smith will be responsible for developing and supporting the products and services of DTCC’s depository and clearing corporation subsidiaries, expanding their efforts globally, including cross-border clearance, settlement and asset servicing activities. All of DTCC’s current international activities and staff, including the company’s London office, are being combined under Smith's control. Smith will become a member of the DTCC senior management team and report to Donald F. Donahue, managing director, Customer Marketing and Development Group.

The International Services division will have responsibility for the company’s London office, the development and servicing of links with central securities depositories (CSDs) worldwide, international operations support, the management of relationships in the Americas (including support for the America’s Central Securities Depositories Association) and the Advisory Group, which consults in emerging markets.

Prior to joining DTCC, Smith served as executive vice president and international treasurer for Daiwa Securities America, Inc. since 1998, where he was responsible for all international treasury-related functions for the firm. Before that, he had a 20-year career with Salomon Brothers, initially in the firm’s Cashiering department as vice president and manager and more recently as director and assistant treasurer in the Global Treasury department, coordinating international funding activities. He began his Wall Street career in 1964 with Herzfeld & Stern, serving as vice president and head of Securities Operations.

In addition to these core services, the Creation platform also incorporates other aspects including securities lending, collateral management, tripartite repo, management information systems and billing within a unified technical architecture.

The Creation platform marks the wholesale replacement of the old Cedel legacy systems with the latest computer software and hardware. The system has been designed specifically to be configurable to the requirements of any given market and pave the way for further integration of markets infrastructures. The platform is scaleable to handle the expected increasing volume of transactions, and is robust and secure thus minimising operating risks and associated costs.

André Lussi, president and CEO of Clearstream International, said: 'With the Creation platform, we have designed an integrated technology platform which has both the flexibility to meet new business requirements and the scalability to handle increased business volumes. We are driving the pan-European consolidation of the clearing and settlement industry, so the Creation platform is designed to adopt to the further integration of other CSDs as necessary. With further consolidation in the industry taking place, we are confident that we have the technical leadership to expand our service in real-time, enabling a quicker, more secure and more efficient communication between customers, Clearstream International and its network of correspondent banks.'

Error in operating system software likely cause for interruption

Trading in the electronic trading system Xetra was interrupted on Tuesday from 03.10 p.m. (CEST) for a good two hours. Trading restarted at 5.15 p.m. (CEST) with the so called pre-trading allowing orders to be entered into the system. The first trades occurred in a following auction at 6.30 p.m. (CEST). After that the system was switched to continuous trading.

According to Deutsche Börse a first analysis calls for an error in the underlying operating system software. Restarting the whole system resulted in the interruption of trading. Deutsche Börse said a detailed analysis would be done overnight.

The funds seek to provide a high level of current income consistent with capital preservation and liquidity. They invest in a range of high quality money market instruments, such as sovereign debt, certificates of deposit and commercial paper. Each fund will maintain a weighted average maturity of 30 to 60 days, yet provide daily liquidity, meaning that an investor may redeem all or part of its investment and receive its money that day. The funds, which have earned Aaa credit and MR1+ market risk ratings from Moody’s Investors Services, will also attempt to maintain a stable net asset value per share.

While accounting for a quarter of the US mutual fund industry, this style of fund is relatively new to Europe and elsewhere. With the introduction of the euro, institutional investors globally have begun to take a more active approach to cash management and diversify away from the bank deposit market.

12JUL00: If you want to know what clients are really thinking, it doesn't do any harm to hire one. That, at least, must be one of the motivations behind Chase Manhattan Bank's announcement that its Global Investor Services (GIS) division has appointed David Gilks as Managing Director of its Product and Industry Management Group in Europe.

Gilks is steeped in buy-side industry knowledge and experience. He previously worked for AXA Investment Management, U.K. where he was chief operating officer. In addition to that role, David had responsibility for corporate and operational planning, corporate governance and risk management, as well as acting as a board member of the Investment Management, Property and Unit Trust companies. Prior to that David was Managing Director responsible for operations, finance and IT at AXA.

He has also been a stalwart of the industry's major initiatives and trade associations, being a founder member of the executive board of GSTPA, a member of the SWIFT Securities Steering Council and a member of Thomson ESG’s European Governance and Advisory Boards.

'I am delighted to welcome David Gilks into Chase. David brings an enormous amount of securities industry experience and expertise which will help us develop our overall product strategy, client technology strategy and our third party administration business in the UK and Europe,' said Jeremy Jewitt, senior vice president, Chase Global Investor Services.

The COO position was created as a result of the growth of Deutsche Bank's business activities in India. Roddam will work closely with the various heads of businesses to ensure the delivery of high quality and cost-effective support services. To this end, he will manage operations in India, Pakistan and Sri Lanka, as well as coordinate, on behalf of the chief country officer for India, the other service functions.

Roddam joined Deutsche Bank AG, India, in 1997. Deutsche’s Indian sub-custody operation was given top-rated status in the 1999 Global Custodian survey.

Francotte joined the Euroclear Operations Centre in 1993 as head of the Legal Division and a member of the management team. In 1998, he became head of the Transaction Processing Division and, earlier in 2000, became Chief Operating Officer with functional oversight of all settlement, custody, and related business operations. Earlier in his career, Francotte was Assistant General Counsel at the International Monetary Fund.

This reorganisation is given added spice by the fact that Clearstream has recently undergone a radical restructuring of its management team following the recent departures of Juergen Marziniak and Terry McCaughey. Although Clearstream's new team has not yet been formally announced externally, it is understood that the banking division has been split into five units, with CEO André Lussi assuming responsibility for global sales and relationship management. Furthermore, it is thought that Clearstream Services has been disbanded.

The timing of both these reshuffles seems odd at a time when the two international CSDs are under increasing pressure from their largest clients and shareholders to merge, a transaction that would inevitably lead to a further shake-up.

According to the memorandum of understanding signed by both parties, ICBC will retain State Street Global Advisors (SSgA), a wholly owned subsidiary of State Street, as its external asset manager under appropriate terms. ICBC will also provide advice and support to SSgA in its entry into China's investment markets. Both parties will accept each other as inter-bank foreign exchange trading counterparties and will cooperate with each other on custody and securities lending businesses, as well as exchange information on each other's latest market trends. State Street will also advise ICBC's custody department to service the launch of open-ended mutual funds, including process review, IT support and relevant training.

As China's largest commercial bank, ICBC currently has over 38 per cent market share of China's commercial banking industry. Since 1998, when ICBC became China's first bank authorised to provide custodial and related business services, total assets under custody have grown to represent a market share of approximately 33%. ICBC had USD400 billion in assets as of year-end 1999 and more than 35,000 branches nationwide. Branches are located in Hong Kong, Tokyo, Seoul, Singapore, Frankfurt, Luxembourg and Alma-Ata, with Representative Offices in London, Sydney and New York.

'As a precursor to the adoption of a new investment strategy, the Trustee Board of the algroup pension plan - uk was pleased to appoint Northern Trust as global custodian, reflecting its objectives to achieve greater efficiencies and consolidated reporting. The choice of Northern Trust was due to a balance of their professional ability, comprehensive service and competitive fee rates,' explained David Jordan, Pensions Manager - Europe.

Northern Trust claims to be acting as global custodian to over 60 pension clients in the UK.

As administrator, Mellon Trust will provide the following functions:

• Acceptance of deal instructions electronically from the fund supermarket Web site;
• Aggregation of deal instructions and forwarding these to the respective fund managers;
• Desegregation of allocated units, equalisation and dividends;
• Settlement of all deals;
• Maintenance of register and static client data;
• Production of daily file extracts to the client's data warehouse; and
• Reconciliation of all units/shares on issue, cash and dividends.

Fund supermarkets provide investors with direct access to a range of investment products and also offer advantageous switching terms among various fund providers with differing management styles. Two other global custodians - Brown Brothers Harriman and Chase - have recently announced plans to administer fund supermarkets, although Mellon is the first to have gone live.

Fennia Group is one of the largest insurance groups in Finland providing clients with all non-life, pension and life insurance services. Pension Fennia specialises in managing statutory earnings-related pension insurance. As a non-life company, Enterprise Fennia specialises in risk management and safeguarding the continuity of corporate activities offering the corresponding services also to households. Fennia Life provides life, pension and unit-linked insurance. Pension Fennia and Enterprise Fennia are mutual companies,and Fennia Life is owned both by Pension Fennia and Enterprise Fennia.

Participation in BBH Fund WorldView will allow fund companies to expand distribution channels, as their funds will be made available through BBH’s extensive client network of banking institutions across Europe. Specifically, the service couples front end Internet delivered information with trading, settlement and custody services, including:

• Complete mutual fund account opening documentation
• Order placement for purchases, subscriptions, redemptions, exchanges, cancellations and confirmations
• Order routing to Fund Companies / Transfer Agents via electronic or manual methods
• Corporate action notification, collection and processing
• Monthly consolidated statements
• Distribution tracking and posting through daily accrual processing, allowing for the crediting of income on payable date plus one for most funds
• Proxy and literature fulfilment

13JUN00: CRESTCo, the UK settlement system, has upped the stakes in the coming battle for cross-border business. It has announced a major reduction of up to 80 per cent in its charging structure for cross-border transactions in US and European securities. This reduction will see securities firms paying as little as GBP1 for cross-border transactions in US and many European securities with effect from 1 July 2000. Currently, CREST charges GBP5 for each cross-border transaction. Custody charges for holdings of international securities in CREST will not be affected by these changes. CREST announced in April that it was to reduce its domestic charges.

Iain Saville, chief executive of CRESTCo, said: 'This reduction means that cross-border settlement should no longer be such a high cost activity for securities houses. CREST is now in an excellent position to offer low-cost automated settlement for the consolidating pan-European Exchanges and markets.'

CREST and SIS SegaInterSettle (the Swiss settlement system) announced the launch of The Settlement Network in March. Through close co-operation and sharing of expertise and infrastructure, The Settlement Network aims to deliver a low-cost integrated settlement process for European securities. CREST also has an automated link to the Depository Trust Company in the USA. CREST has so far resisted the trend amongst European CSDs to merge and consolidate.

The Canadian Wheat Board, a marketing agency for Western Canadian wheat and barley growers, awarded administrative custody of its investments to CIBC Mellon following a competitive bid process. 'We decided to consolidate our custodial services and after considering our options we selected CIBC Mellon based on their technology, sound understanding of our needs, local Winnipeg service and competitive pricing,' said Ms. Beverley Szaura, director, risk control and reporting, for the Canadian Wheat Board.

08JUN00: Brown Brothers Harriman (BBH) today announced the launch of RiskView, the newest offering in BBH’s collection of interactive operational risk products. The Web-based RiskView allows users to measure and quantify the relative operational risk of trading, settling, and safekeeping in global markets.

RiskView uses market and security type data within selected risk criteria to provide a portfolio risk assessment. Clients may elect to use BBH default settings to identify the contribution of each attribute of market infrastructure to the total level of risk in designated markets. In addition, clients have the flexibility to modify settings to their particular portfolios. Clients gain secure access to RiskView via BBH’s home page at http://www.bbh.com/

The IIC application is designed to enable users to track every trade, from end-to-end, by a unique reference number. In addition, a remote authorisation feature offers the flexibility to enter trades from one geographical location and authorise these trades from another. IIC also gives users real-time entry capabilities and access to updated broker and account information. Clients logging onto INFORM use individual SecurID cards, an authentication tool which provides additional security.

Radianz will provide an IP platform for delivering a range of content and transactional capabilities in 120 countries. It plans to provide next-generation network connectivity and security to end-users. Companies which have agreed to use Radianz’s services include Euroclear (for its new Online service), Morgan Stanley Dean Witter, Knight Trading Group Inc., and Fimat (part of Société Générale Group).

'The concept of Radianz is attractive to financial companies because it is bringing together the critical mass of end-users needed to create a whole new world for secure financial communications,' said Doug Gilstrap, CEO of Radianz. 'Financial companies are joining Radianz because we can connect every company, customer and supplier in financial services in the most efficient manner possible.'

David Ure, executive director of Reuters, will be chairman of Radianz. Doug Gilstrap is appointed Radianz’s CEO, Brennan Carley chief product and technology officer and Chris Church head of global sales.

Reuters will own 51 percent of Radianz. Subject to approvals, Reuters will transfer US$105 million of telecommunications network assets into the new entity, plus US$25 million in cash. It will also sell Reuters Connect Services, Reuters existing telecommunications business serving the financial community, to Radianz for US$25 million in cash.

Equant will own 49 percent of Radianz and contribute US$225 million in cash to the new company. It will also provide US$125 million of other services and contribute an additional US$25 million of annual contracted revenue from its existing financial services customers. In addition, Equant will supply network services under a long-term agreement, which is expected to be worth approximately US$100 million in the first full year of operation.

Radianz will have approximately 500 employees, more than 400 of whom are transferring from Reuters where they are involved in specific networking and telecommunications activities. Sixty staff will transfer from Equant’s sales, marketing and product development area. Equant will transfer approximately 40 more staff within a 12-month period.

Radianz will work closely with TIBCO Software to enable the delivery of TIB-based applications over its network. This will allow companies that have invested in TIB technology for enterprise-wide applications to extend those applications to their clients, their suppliers and their extended communities of interest.

06JUN00: Chase's Global Investor Services (GIS) division has been selected by Gjensidige NOR Kapitalforvaltning to provide global custody and futures clearing for approximately $4 billion in assets. Gjensidige NOR Kapitalforvaltning is the second largest Norwegian asset management company with approximately $9 billion under management. The company is part of the Gjensidige NOR group, the second largest financial group in Norway, including bank, life- and non-life insurance.

'This is a important new business win for Chase and we are extremely pleased to have been chosen as Gjensidige NOR Kapitalforvaltning’s global partner. This appointment underscores Chase’s ability to offer market leading products and services that help support the business needs of sophisticated investors around the globe,' said Jeremy Jewitt, Senior Vice President, Chase Global Investor Services, Europe, Africa and the Middle East.

'As our business grows internationally, we need to be associated with the leaders in all fields of our operation. We feel that our new arrangement with Chase as our global custodian serves to underline this policy and ensures our clients receive the best service available,' said Lars Haug, Senior Vice President, Gjensidige NOR Kapitalforvaltning.

06JUN00: Deutsche Bank has appointed Yoram Matalon as Managing Director, Head of Customer Management for Global Securities Services Central Europe with effect from 1 August. In his new role, Matalon will have responsibility for customer management, customer services, depotbank and tri-party services for Central Europe.

Matalon joins Deutsche Bank after nearly 20 years with The Bank of New York where he was Business Head and Country Manager for Germany. Matalon will be based in Frankfurt and will report to Stefan Gmuer, European Head of Customer Management.

Automated, straight-through processing will be available by file transfer and via MQSeries, a product that enables business applications to exchange information across different platforms by sending and receiving data as messages. MQSeries will be the solution of choice to support shortening settlement cycles. The Euroclear Online browser, file transfer, and MQSeries alternatives will each access Euroclear services using either a public or private IP network. In addition, access through SWIFTNet, S.W.I.F.T.’s new IP network, will be offered at a later stage.

Euroclear Online will be offered as an alternative to EUCLID, the current Euroclear-proprietary communications channel. After a two-year transition period, Euroclear Online will replace EUCLID. Participants using S.W.I.F.T. will not be impacted by the introduction of Euroclear Online.

24MAY00: The Chase Manhattan Bank announced today that its Global Investor Services (GIS) division has been selected by Tesco Pension Trustees Limited to provide global custody services to its £1.3 billion pension scheme.

'We are delighted Tesco selected Chase and the appointment underscores our ability to offer a broad array of market leading products and services to this very important sector,' said Sue Curtis, Business Manager for the EAME Pensions & Middle East Client Management Group of GIS.

19MAY00: Few surprises in the latest Global Investor global custody survey. Pictet and Chase were rated as the top global custodians, with Chase winning an impressive five categories: Top Global Custodian overall for client satisfaction (weighted), Global Custodian of choice for institutional fund managers, Best European custodian, Best European institutional fund manager custodian, and Best custodian in the Asia Pacific region. This is the second year that Chase has topped the survey.

State Street's progress under his watch has been nothing short of remarkable: during his tenure, annual operating earnings per share have grown at a compound annual growth rate of 16 per cent, while annual operating revenue has grown 17 per cent. Revenue from customers outside the United States has increased eightfold, at a compound annual growth rate of 27 per cent. Assets under custody have increased from USD912 billion to USD6.2 trillion and assets under management have increased from USD66 billion to USD720 billion.

Carter will remain chairman until his retirement. As part of the corporation's long-term succession planning, David A. Spina, age 57, will become CEO effective immediately. Spina, who will continue as president, will become chairman upon Carter's retirement. Spina, who joined State Street in 1969, has held a variety of positions within the corporation over the years, including chief operating officer, chief financial officer and treasurer, executive vice president and vice chairman. He was elected president in 1995.

State Street has also announced the election of vice chairmen Ronald E. Logue - head of investor services - and Nicholas A. Lopardo - head of SSgA - to the company's board of directors. In addition, Ronald E. Logue is elected chief operating officer of State Street and John R. Towers, vice chairman and head of operations, is designated chief administrative officer.

The new link will enable CREST to provide access for its members to a wide range of European shares and bonds through the Euroclear System, with settlement of cross-border transactions eventually on a Delivery Versus Payment (DVP) basis.

In addition to providing a settlement gateway between CREST members and their counterparties in other domestic settlement systems, the link will also allow for direct settlement between CREST members and the international base of more than 2,000 Participants in the Euroclear System. This will, in turn, allow for a further increase in the liquidity and cost-effective cross-border settlement of virtually all Euroclear-eligible securities, including Irish government bonds, following the recent decision of the Irish authorities to outsource their settlement activity to the Euroclear System. Equally importantly, the new link will also enable CREST's members to hold international securities deposited and distributed in the Euroclear System.

A. Chris Tupker, Euroclear Chairman, said: 'The outcome of today’s meeting illustrates clearly the extent to which Euroclear shareholders support their Board’s strategic vision for the future development of the Euroclear System. The creation of Euroclear Bank is the cornerstone of that strategic vision. It will enhance significantly our business and financial flexibility, and will broaden our opportunities insofar as future strategic partnerships are concerned.'

For the past ten years, State Street has served as the custodian, accounting agent and valuation agent of the PIMCO Funds. As outlined in the letter of agreement, State Street will assume virtually all of PIMCO's investment operations capabilities in Newport Beach, California, including securities trade order processing, custodian communication for settlements and accounting, systems network and IT development, as well as certain human resource and training areas and office services functions. State Street will also take on approximately 300 employees of PIMCO to service the business upon signing of the final agreement.

'Our expanded partnership with State Street affords PIMCO the opportunity to focus on our core business - investment management,' said William S. Thompson, managing director and chief executive officer of PIMCO. 'Of course, State Street will be assuming management of a proven and experienced workforce, which should ensure delivery of the highly specialised, state-of-the-art operations, systems, and processes that PIMCO will require in the coming years.'

PIMCO manages more than $190 billion in assets for its clients which include many of the largest corporations, foundations, endowments and governmental bodies in the world. PIMCO's flagship fund, PIMCO Total Return, is the nation's largest bond mutual fund with assets totalling more than $30 billion.

Marziniak has wasted little time in getting to grips with his new empire, and has implemented a reorganisation that should result in a much clearer client focus and a more entrepreneurial approach to the business. The division will be managed on a regional basis, with a chief operating officer for each of the three regions. Ken Kennedy will be COO for the US, whilst Roger Harrold will become COO for Asia. Reporting directly to Marziniak, the three chief operating officers will each have regional responsibility for customer management, operations and IT. In addition, there will be three managers with global responsibility for these functions – Richard Ernesti for customer management, Ken Kennedy for operations, and Marziniak himself for IT.

Marziniak's rapid action suggests that he is impatient to get the business momentum going again after all the upheavals of the Bankers Trust acquisition and the associated personnel issues. Convincing McCaughey to forgo his position at Clearstream and move back to London must have been a significant challenge for Marziniak, but the move demonstrates that Deutsche Bank are still completely serious about the custody business.

As McCaughey and his wife, Margaret, prepare to pack the teacrates once again, he will no doubt reflect on the irony of his new position. When at HSBC, McCaughey established Global Fund Services, the bank’s investment administration and performance analysis subsidiary. He hired Stewart Crawford from The WM Company to run the business, and Crawford brought across a large contingent of WM people with him. WM, of course, is owned by Deutsche Bank, and it will be under McCaughey's control in his role as European COO. No doubt he will receive a very warm welcome on his first trip up to Edinburgh.

Changes in Japanese pension regulations, particularly the impending introduction of defined contribution pension plans, present tremendous opportunities for servicing of developing client needs in the Japanese pension market. The new trust bank will initially focus on servicing Japanese-style master trust requirements and managing marketable securities; additional products and services will continue to be developed in line with market needs.

'The master trust company will greatly benefit from the expertise and market coverage of all five participants,' said Juergen Marziniak, Head of Deutsche Bank’s Global Securities Services group. 'The new company is poised to be a leading innovator of new products and driver of more efficient securities services in Japan.'

CSAM recently conducted a review of all major suppliers, sparked by the exit of Lloyds TSB from the custody market. 'We were extremely impressed with Citibank’s knowledge and experience as trustees and felt that they were really leading the rest of the market in this area,' said Akgun Dervis, head of retail operations for CSAM.

Richard A. Dunn (left), senior vice president and currently the head of Merrill Lynch's Corporate Risk Management Group, will become president and CEO of MLSSD with responsibility for management of the new business. Arthur L. Thomas, senior vice president and head of Global Operations Services, will become chief operating officer. MLSSD will be part of Merrill Lynch's Corporate & Institutional Client Group, reporting to Thomas W. Davis, president of CICG.

'As market structures continue to evolve and trading volumes continue to increase, we see outstanding opportunities for Merrill Lynch to provide clearing, settlement, custody and financing services to a greatly increased number of clients,' Mr. Davis said. 'We envision substantial growth, both in the U.S. and globally, and excellent opportunities for stable, fee-based income in this business.'

The new business unit will be created by merging existing support units and selected businesses. It will include functions such as clearing, settlement, custody and securities financing, and businesses such as prime brokerage and stock loan, as well as related activities. It will also work closely with the debt and equity divisions in CICG, and with Merrill Lynch's private client and asset management businesses.

The new company will be a commercial enterprise that fills key gaps in the current institutional trade-processing model by offering streamlined trade management. The venture will link a broadened global community of custodian banks, investment managers and broker-dealers, accelerating the industry’s drive to manage operational risk through real-time straight-through-processing of securities transactions.

Building on the existing trade processing businesses of DTCC’s Depository Trust Company subsidiary and Thomson Financial ESG, a unit of Thomson Financial, the company’s long range goal will be to leverage internet technology capabilities and an e-commerce architecture to offer a single trade management platform over a secure IP network.

'Our objectives are very clear,' said Jill M. Considine, Chairman & CEO of DTCC. 'The new venture will create the leading global trade processing platform and bring the securities industry closer to shortened settlement cycles.The decision on our part to join with Thomson Financial is an outgrowth of our new mission at DTCC, which in part is focused on developing industry solutions based on strategic partnerships and alliances, delivering the greatest benefits in terms of connectivity, efficiency, lower cost and value added services to our customers.'

'We believe that the joint venture has the potential to become one of the most significant business-to-business e-commerce models by helping the financial industry meet the challenges associated with growing trading volumes and shortened global trade settlement cycles,' said Sharon Rowlands, Chief Operating Officer of Thomson Financial. 'The new company will leverage the heritage of its parents, combining an unblemished record of safety and soundness in trade processing with a reputation for commercial innovation and problem-solving on behalf of a global client base.'

The new company will be structured as a joint venture. Robert J. McGrail, Managing Director and Head of New Business Ventures for DTCC, will serve as Chairman and P. Howard Edelstein, President and Chief Executive Officer of Thomson Financial ESG, will be the President & Chief Executive Officer.

A final definitive agreement will be submitted to the Boards of Thomson and DTCC in early summer. Completion of the transaction will follow customary due diligence and will be subject to appropriate regulatory approvals. A seven member Board made up of two representatives each from DTCC and Thomson Financial and three global securities industry representatives will govern the new company. The new company will operate independently of DTCC’s securities depository business and Thomson Financial.

Mary Fenoglio, State Street executive vice president commented: 'The expansion of our global network to 90 markets demonstrates the depth of our commitment to supporting our clients' global growth strategies worldwide. BankBoston's local market expertise will allow us to deliver the information-based solutions that our clients need via State Street's state-of-the-art technology infrastructure.'

Webb Martin, senior vice president and chief trust officer at Bank of Hawaii, commented: 'After an extensive search, we decided to consolidate all of our custody assets with The Bank of New York because we believe this relationship will help ensure that we provide our clients the efficient and effective service they deserve and expect. We were impressed with The Bank of New York’s clear commitment to the bank and the trust market, its technology-based services and its reputation for quality client service.'

Dickinson joins Rabobank International from Deutsche Bank where he was a managing director in Global Investor Services. He had previously been at Bankers Trust, Swiss Bank, Fidelity and Chase. Rabobank International is the corporate and investment banking arm of Rabobank Group, the Dutch financial institution, which is the only private sector bank in the world to be triple A rated by all the major credit rating agencies.

As Executive Chairman, Pen Kent will be responsible for the advocacy of the key principles of the newly rebranded European Securities Forum in the wider market, and the organisation's strategic direction. His role will include the co-ordination of the ESF working groups on Trading Platforms, Market Operations and Infrastructure, and Netting. Liaison with the regulators and market associations will also be key in supporting the contributions of the forum across the industry with regulators and market associations.

Pen Kent was formerly an Executive Director of the Bank of England, where he concentrated on market efficiency and the working of the City. He led the CREST project from its start after the collapse of Taurus, and was its first Chairman when it went live.

Lawrence started at Northern Trust Hong Kong on April 3. He most recently comes from The Bank of New York (Hong Kong & Singapore), where he was vice president in Investor Services, and prior to that time, from J.P. Morgan (Hong Kong), where he was vice president in Securities Trust & Information Services.

Laura Wallace, investment officer of the Public Employee’s Retirement System of Nevada, explained, 'After reviewing proposals from five custody banks, the Retirement Board selected The Bank of New York as its master custodian and securities lending agent. The Bank was appointed because of its client-oriented service culture, technology, broad array of securities services and overall competitive proposal.'

The European Exchange-Traded Fund Company plc is to launch LDRS (pronounced 'leaders'), Europe’s first exchange-traded funds. LDRS (Listed Diversified Return Securities) are exchange-traded securities designed to track the performance of stock indices and be traded as a single investment portfolio in the same way as shares of any listed company.

Penrose joined Northern Trust in 1977 and has held positions in Economic Research, International Banking, Strategic Planning, Northern's brokerage subsidiary, Corporate Financial Services, Wealth Management and Personal Financial Services Marketing. She was appointed Executive Vice President in 1993, and assumed her current responsibilities when the C&IS Business Unit was created in 1994. She became a member of the Management Committee in 1995 and was named President of C&IS in 1998. Prior to joining Northern Trust, she was a Lecturer in Economics and an Economic Advisor to the British Treasury.

William A. Osborn, Chairman and Chief Executive Officer, said, 'Sheila has our deep appreciation for her remarkable accomplishments during many assignments over her years with Northern Trust. Her outstanding work in establishing the C&IS Business Unit and leading it through a period of dramatic growth and success has been especially noteworthy. I know that the careful transition we have planned will ensure continuity for both clients and staff. Pete's leadership skills, along with his knowledge of this key business as a member of our Management Committee and as General Counsel, will allow us to build on the terrific record of Corporate and Institutional Services.'

'CREST membership is an essential part of Royal Trust’s international growth strategy. Our goal is to provide a global platform of integrated securities solutions to bank and fund manager clients,' said Paul Stillabower, managing director of Global Securities Services in London. 'Europe is a key target for Royal Trust, and the UK is one of the most significant markets serviced by our business.'

10APR00: Mellon Financial Corporation has appointed Jeffrey L. Newman as president of Mellon Securities Lending, effective May 1.  Newman, most recently a principal with Morgan Stanley Dean Witter, will replace Larry F. Clyde, executive vice president, who is retiring.

'Larry has done an outstanding job in developing a top-notch team of skilled professionals in securities lending, which we consider one of our growth businesses,' said Kip Condron, Mellon president and chief operating officer, to whom Newman will report.  'We are fortunate to have Jeff lead this outstanding team.   He has a keen sense of the securities markets and a strong track record, along with a proven ability to manage complex businesses and forge superior client relationships.'

Newman, 46, joined the San Francisco office of Morgan Stanley Dean Witter in January 1998 as co-head of the Western Region Prime Brokerage Services Group, with relationship and marketing responsibility for more than 100 hedge funds, funds of funds and family offices.  Prior to that, he spent four years at First Interstate Bank as manager of Portfolio Lending Services.  After the merger of First Interstate and Wells Fargo, Newman oversaw the sale of the Securities Lending/Trust businesses.  Prior to that he worked in New York
where he was responsible for the trading, investment, relationship management and operations functions of The Bank of New York's securities lending business.  While there, he implemented the company's international lending programme.  Newman began his career in Securities Lending with Bankers Trust
where he merged the Institutional and Master Trust lending units and managed the combined entity.

Mellon Securities Lending has USD400 billion in participating assets, serving more than 200 large institutional clients and lends securities in 20 countries.  With trading operations in Pittsburgh, London and Hong Kong, the department can lend in all principal markets 24 hours a day.

04APR00: Clearnet SA and London Clearing House Limited (LCH), the two main central counterparty services in Europe, announced plans today to collaborate to create a consolidated European clearing house which will meet the requirements of global market participants and which will complement the consolidation occurring between Europe’s exchanges and between its securities settlement systems. This strategic initiative has been approved unanimously by the boards on both sides.

The consolidated European clearing house will be the largest central counter-party in Europe for capital, energy and commodity markets, cash and derivatives, traded on regular exchanges and/or on the OTC market. Clearnet and LCH will seek to build the consolidated European clearing house in two stages: joint venture, targeted to be brought about by early 2001, and full merger between the two companies to follow as soon as possible thereafter. The consolidated clearing house will also be open to collaboration with other European clearing houses that wish to provide their members with the benefits of common systems and operations and transparent self-governance.

The consolidated European clearing house will be user-governed, market and settlement independent and open to all markets, systems and/or users requiring clearing services. It will utilise a single set of clearing and netting systems, based on Clearing 21 technology (adapted by ParisBourse from the Chicago Mercantile Exchange original software), and centralise its operations.

Sir Michael Jenkins, LCH’s chairman, said: 'Technology is having a profound effect on financial markets. It is dramatically reducing the cost of establishing new trading platforms, thereby increasing competition and stimulating pressure to reduce costs. One way to achieve this is by reducing the number of clearing houses, standardising systems and procedures. This is what market users want and this is what Clearnet and LCH are doing.'

Jean-François Théodore, Clearnet’s chairman, said: 'Following the recent announcements regarding the creation of EuroNext and the Euroclear/SICOVAM merger, LCH and Clearnet, Europe’s two main central counterparty services, are now providing a third cornerstone for the process of infrastructural consolidation in Europe’s financial markets. These are strong foundations on which the markets may consolidate further, as users desire.'

FundsHub aims to transform the mutual funds industry in four significant areas:

• It will allow retail banks and brokers which have yet to develop online investment services to ‘plug and trade’ with FundsHub. This will enable them to provide online investment services to their customers whilst retaining their own brand and ‘ownership’, avoiding lengthy online development programmes and high costs
• It will give fund companies access to a new pan-European distribution channel through retail banks and brokers
• It will provide private investors with an unprecedented range of global funds
• FundsHub’s technology will allow the private investor access to fund search, comparison and asset allocation tools previously only available to professional investors and advisers

Mark Collier, Chief Executive Officer of FundsHub and the co-founder of Investia, commented: 'FundsHub will revolutionise the customer’s online investing experience by allowing their existing bank, insurer, online bank or financial services provider to give them an easy, informed way of choosing between thousands of funds on the Internet.

'There are two major forces that are shaking up European retail investment. First, more and more European private investors want to invest in higher yielding, better performing investments. Secondly, they want great value, fast access, choice and control of these investments via the Internet. FundsHub is giving financial services companies in the UK and Europe the opportunity to tap that demand by plugging straight into an outsourced fund supermarket.'

To date, according to Collier, the range of funds available to private investors has been limited. 'European mutual fund distribution is still dominated by the universal banks, which sell their own in-house managed products. In the leading markets, the top four or five banks usually account for 75% to 80% of net sales. Non-domestic fund managers account for only 7% of total sales across the Continent. Consumers are being underserviced and overcharged.'

David Pearsons, group treasurer of Royal London said: 'We look forward to working with State Street and are confident that their local expertise will provide us with the best possible service. We value State Street’s dedication to the business and their wide array of resources was key in our choice of a service provider.'

David Bilbé, senior vice president of State Street, said: 'We are very pleased that Royal London has chosen State Street and we look forward to establishing a strong relationship with them. This significant win reaffirms our commitment to providing the best possible unit trust services to the UK marketplace.'

31MAR00: Further changes at Deutsche Bank, which has announced the formation of the Global Portfolio Management group within its Global Securities Services division. The new group will combine the existing Securities Lending business and the Reserve Money Market Investment Management business into a single unit. The group will focus on servicing global institutional clients in the short-term fixed income investment management arena and the global equity and fixed income lending businesses.

The Global Portfolio Management group will be headed by John K Burgess, based in London. The business will employ more than 170 staff globally. 'I am both confident and excited about the future and success of the new venture,' said Burgess. 'As one business, we will be able to capture the synergies of the two product areas and produce a world class money market investment and securities lending group servicing all aspects of the global market place in short term fixed income management.'

Burgess was previously head of the Reserve Money Market Investment Management team at Deutsche Bank, which included the cash collateral management of the Securities Lending business. Prior to that, Burgess was head of US Fixed Income at Bankers Trust Asset Management, a position he had held since 1995.

Nationwide, which is apparently based in Columbus, Ohio, said the acquisition of Gartmore 'gives us immediate scale and global brand name credibility'. The group said it supports Gartmore's current management team and its operations and will make no changes as a consequence of the acquisition.

The funds, which are split among a total of 36 retail and institutional unit trusts and two charity funds managed by Schroder Investment Management, are currently in the custody and trusteeship of Lloyds TSB Securities Services Limited. Lloyds TSB gave notice last year that it intended to withdraw from the global custody and trustee business.

The unit trusts covered by the new agreement with Chase include the Schroder UK Enterprise Fund and the Schroder UK Equity Fund, both more than GBP1 billion each in size. Also covered are Schroders’ popular UK Smaller Companies Fund and UK Mid 250 Fund as well as a range of institutional unit trusts.

Commenting on the appointment of Chase, Peter Wolton, Managing Director of Schroder Unit Trusts Limited, said: 'Chase Manhattan have a clear commitment to the business of providing custody and trustee services in the UK. Not only do they provide a quality service supported by an expert team, but we also believe that they are the right strategic partner to work with in developing our unit trust business in future'.

The transfer to Chase Manhattan of the trust and custody for more than GBP13 billion in Schroders’ funds under management represents the largest proportion so far of funds previously held by Lloyds TSB, which has provided custody and trustee services to Schroder Unit Trusts Limited since the company was formed ten years ago.

Measurisk.com has developed a comprehensive reporting capability that measures the loss potential of institutional investors’ funds using Monte Carlo simulations to calculate VaR. The service allows clients to optimise risk exposures through stress testing their portfolios with historic or theoretical market scenarios. Sophisticated risk analysis has become increasingly important as a complement to performance and attribution reporting, particularly in its ability to capture the impact of derivatives in a portfolio.

Jürgen Marziniak will return to the Bank as Head of Global Securities Services effective April 17. He will be based in Frankfurt. Marziniak joins from Clearstream Banking where he was chief executive officer. He previously held various management positions over 25 years with Deutsche Bank. His latest assignment with Deutsche Bank was Global Head of Custody Services, a position he held until April 1998. will return to the Bank as Head of Global Securities Services effective April 17. He will be based in Frankfurt. Marziniak joins from Clearstream Banking where he was chief executive officer. He previously held various management positions over 25 years with Deutsche Bank. His latest assignment with Deutsche Bank was Global Head of Custody Services, a position he held until April 1998.

Larry Klane has been appointed Head of Institutional Cash Management, replacing David Hinds, who will retire. Klane was previously Head of Corporate Trust and Agency Services (CTAS). He joined Bankers Trust in 1994 with responsibility for strategy and business development within GIS. Klane will continue to be based in New York. has been appointed Head of Institutional Cash Management, replacing David Hinds, who will retire. Klane was previously Head of Corporate Trust and Agency Services (CTAS). He joined Bankers Trust in 1994 with responsibility for strategy and business development within GIS. Klane will continue to be based in New York.

Dinkar Jetley will become Head of Corporate Trust and Agency Services. He joined Deutsche Bank from Citibank in 1999 as Global Product Management Head for CTAS. While at Citibank, Jetley was most recently the London-based Global Head of Credit Risk Operations. He will be based in London. will become Head of Corporate Trust and Agency Services. He joined Deutsche Bank from Citibank in 1999 as Global Product Management Head for CTAS. While at Citibank, Jetley was most recently the London-based Global Head of Credit Risk Operations. He will be based in London.

As head of Global Operations, Towers is responsible for all aspects of State Street's securities and cash operations, including the continued development of the global operations infrastructure. He also leads several of State Street's efforts on major industry initiatives, including Global Straight Through Processing and T+1.

Towers was named head of Global Operations in 1997 after serving as State Street's General Counsel for three years. He began his State Street career in the mutual funds area in 1969 and held various management positions until 1981. Prior to rejoining State Street in 1994, he held executive positions at the Bank of Boston, U.S. Trust Company of New York, and Fidelity Management & Research Company.

Under the agreement, the Euroclear group will have the option to take an ownership interest of up to 20 per cent in Clearnet, the ParisBourse's subsidiary for netting and clearing, which may be passed on to Clearnet users in the future. Euroclear representation on the Clearnet Board of Directors will be proportional to its shareholding.

Euroclear and Sicovam claim that the merger will provide the market with savings of an estimated value of over EUR 300 million. 'The Euroclear/Sicovam merger constitutes a landmark development in rationalising the European settlement infrastructure. It combines two leaders in a compelling, market-owned and market-governed solution for the market. Moreover, by leveraging the netting facilities of Clearnet in parallel with those of the London Clearing House, we are now at the forefront of the clearing and settlement consolidation process in Europe,' said Chris Tupker, Euroclear's Chairman.

The merged entities expect to play a major role in the provision of settlement and related services for EURONEXT, the single European stock exchange to be created by the merger of ParisBourse, the Amsterdam Exchanges (AEX), and the Brussels Exchanges (BXS). They have also indicated that they intend to have discussions in the near future with other central securities depositories, including Clearstream, 'to ascertain if there is a basis for merging or other forms of consolidation in order to provide Europe with the efficient and risk-controlled single process it is demanding'.

Zeigon, 52, will be based in New York and will report to Hermann-Josef Lamberti, Deutsche Bank’s member of the board of managing directors responsible for the Global Technology and Services division. He will oversee the firm’s transaction services products that are delivered to more than 6,000 clients throughout the Americas, Europe, and Asia Pacific. Global Institutional Services offers a full range of specialised products, including global cash management, custody services, securities services and corporate trust & agency services.

Zeigon joins Deutsche Bank after 23 years with Chase Manhattan Corporation where he was most recently a senior managing director and head of Chase Global Services, the bank’s information and transaction services division. Zeigon left Chase last summer after a reorganisation.

O'Driscoll has long been a familiar part of the European custody landscape, and has overseen Mellon's development through the acquisition of The Boston Company - which brought it new strengths in the UK through Boston Safe and Premier Administration - and its alliance with ABN AMRO, which recently announced its first major mandate. O'Driscoll hasn't yet decided what he will do next.

MCIV enables institutional investors with multiple currency exposures to consolidate balances within one investment vehicle. Through MCIV, investors can access money market yields in almost any tradable currency while maintaining their multicurrency liquidity and exposure.

Currently MCIV offers the following currency classes to qualified investors, making additional currencies available according to demand: Australian Dollar, Sterling, Canadian Dollar, Danish Kroner, Euro, Hong Kong Dollar, Japanese Yen, New Zealand Dollar, Swedish Krona, Norwegian Krone, Swiss Franc and US Dollar.

Thomas Godlasky, president of AmerUs Capital Management said, 'A strategic relationship with The Bank of New York, an industry expert in insurance custody, will contribute to our growth and support our businesses.' AmerUs Life Holdings, Inc. is headquartered in Des Moines, Iowa and is engaged through its subsidiaries in the business of marketing, underwriting and distributing individual life insurance and annuity products in 49 US states, the District of Columbia and the US Virgin Islands.

Ulster Bank Capital Markets Chief Executive Paddy McMahon commented: 'Ulster Bank is very pleased that Northern Trust is taking ownership of the UBIS business. We believe that the change in ownership is good for both customers and staff as the further development of the business requires the kind of scale and expertise which Northern Trust can undoubtedly provide. We wish them every success from their new Dublin base.'

Steven Fradkin, the Head of the International and Global Fund Services Group at Northern Trust, said: 'This capabilities-based acquisition is an integral step in Northern Trust's international business strategy. It expands our current global custody services to add a full package of offshore fund services to our investment manager and institutional clients, which includes trustee, fund administration, fund accounting, and transfer agency services. UBIS has built a strong, well-respected business which Northern Trust is confident will integrate smoothly and quickly into our existing operations.'

The business being acquired by Northern Trust had total assets under custody of EUR15.7 billion and fund assets under administration of EUR5.3 billion at 30 November 1999. The agreed consideration is EUR13.5 million, subject to closing adjustments. The deal is expected to close in the second quarter of 2000.

The Washington State Treasurer, Michael J. Murphy, has appointed BNY to provide securities services to local governments and institutions of higher education across the State. The contract negotiated between BNY and Washington State is the first of its kind in the US and follows through on 1999 legislation, authorising the Treasurer to negotiate a custody contract on behalf of local governments. The contract is expected to increase the level of service and provide economies of scale, while eliminating individual searches and contract negotiations conducted by local governments. Michael J. Murphy, has appointed BNY to provide securities services to local governments and institutions of higher education across the State. The contract negotiated between BNY and Washington State is the first of its kind in the US and follows through on 1999 legislation, authorising the Treasurer to negotiate a custody contract on behalf of local governments. The contract is expected to increase the level of service and provide economies of scale, while eliminating individual searches and contract negotiations conducted by local governments.

New York Life Insurance Company has appointed BNY to provide custody services for its mortgage-backed securities portfolio. Jay Calhoun, treasurer of New York Life Insurance Company, said, ‘After an extensive due diligence process, we chose The Bank of New York because of its clear commitment to the securities processing business and its willingness to develop customised solutions to meet our specific business needs.’

CGU, Canada’s largest property and casualty insurance organisation, became a client of CIBC Mellon through CIBC Mellon’s acquisition of the Bank of Montreal’s global custody business in July 1999. CGU recently acquired GAN Canada, another insurance group, and will transfer GAN’s assets to CIBC Mellon, their sole provider.

'CIBC Mellon is very customer focused and that is important to us,' said Norman McIntyre, senior vice president, CGU Group Canada Ltd. 'We were extremely pleased with their ability to convert our account quickly through thorough planning and execution. We also see the potential that their value-added products will meet our future needs.'

ABN AMRO Mellon and 3M will work together in establishing a multinational solution which will integrate 3M’s world-wide pension assets and provide global custody, consolidated accounting, performance measurement and analytics and home office reporting via Mellon’s Executive Workbench products.

'We are very proud to count 3M as a client of ABN AMRO Mellon Global Securities Services,' said Nadine Chakar, ABN AMRO Mellon managing director. 'Although the "multinational solution" is not an unknown concept in the custody business, the volume of business and the number of markets involved makes this mandate unique in our industry. We have found through our talks with 3M that there is a growing need for the home office plan sponsor to have online, timely access to information on their world-wide pension plan assets.'

3M is the diversified manufacturer of commercial, industrial, consumer and healthcare products, probably best known for its ‘Post-it Notes’. ABN AMRO Mellon Global Securities Services was formed in November 1998 to provide global custody securities services to institutions worldwide.

State Street already has a relationship with Aberdeen through EFDS, which provides transfer agency services for the funds. The majority of the funds were previously looked after by Lloyds TSB, and State Street was awarded the contract after a review which included Chase and Citibank.

• Turnover, or the value of securities transactions settled through the system, increased in 1999 by USD1,595 billion to a record USD46,515 billion, an increase of 3.6% from the 1998 figure of USD44,920 billion.
• The value of securities held in custody for Euroclear participants at year-end 1999 was a record USD3,048 billion, 16.5% above the USD2,616 billion level at year-end 1998.
• With peaks approaching USD45 billion, average daily triparty outstanding rose to USD36.5 billion in 1999, an increase of 26.3% from the USD28.9 billion recorded for 1998.
• The number of securities accepted in the Euroclear System at the end of 1999 grew to 135,661, an increase of more than 21% from the 1998 figure of 111,945.

Settlement instructions worth, on average, USD 180 billion were processed each day.

Linds has over 20 years experience in the financial services industry, including 10 years with CIBC World Markets and CIBC Mellon. He has held the position of director, business development at CIBC Mellon since 1996.

CIBC Mellon was formed in 1996 to combine the strong Canadian presence and client base of CIBC with the technology and investment information services of Mellon. CIBC Mellon’s two operating entities are CIBC Mellon Global Securities Services Company, a global custody provider, and CIBC Mellon Trust Company, a supplier of transfer agency and corporate trust services.

Leech joined The Royal Bank of Scotland in 1991 as a financial controller for the securities services division. Most recently, Leech's responsibilities at BNYE have included operations in London, Edinburgh, Dublin and Luxembourg; he was also finance director of RBS Trust Bank Ltd for two years.

14FEB00: Mellon Trust, the newly combined investor servicing, fund accounting, custody operations and back office support business, had made two new appointments to its management team - Julian Tregoning as marketing director and Peter Fairweather as director of client relations.

Tregoning was formerly a main board director of Fleming Asset Management and has held a number of senior positions within the Save and Prosper Group since 1968. His non-executive roles included being chairman of AUTIF from 1993-1995 and president of Federation Europeene des Fonds et Societes d’Investissement (FEFSI), Europe’s mutual funds trade association from 1997-1998.

Fairweather was formerly director of unit trusts at Royal Exchange Trust Company Ltd. He previously spent almost 10 years with Midland in various management roles specialising in trustee work, asset management and securities moving on to heading up the UK corporate trust division.

• be the first European equities exchange to offer its members straight-through, pan-European clearing and settlement;
• offer significant cost advantages, improved trading hours and anonymity to members;
• facilitate pan-European securities trading under a common rule book and market structure with an electronic anonymous order book;
• initially trade the top 300-400 European equities, by market capitalisation; and
• have the full support of the consortium of leading international brokerage and financial services firms, which has a 54% holding in Tradepoint, in developing a European equities exchange which should be the principal marketplace – by trading volume and central price formation – for the trading of the Eurotop 300 stocks, by the fourth quarter of 2001.

As a UK Recognised Investment Exchange, Tradepoint has already been designated as a Regulated Market throughout Europe under the Investment Services Directive.

This approach is based on the model that Tradepoint uses in the UK and will allow Tradepoint’s members - which currently number over 100 - to execute, clear and settle trades using a single, straight-through processing system.

Acting as central counterparty for all order book transactions on Tradepoint’s European exchange, LCH will become principal to each transaction between Tradepoint clearing members, protecting them against counter-party credit risk and providing trade anonymity. LCH will also provide facilities to Tradepoint clearing members for trade aggregation and netting, reducing the number of settlements required and therefore the cost of settlement.

Settlement of pan-European equity transactions conducted on Tradepoint will follow the industry standard of trade date +3 in the Euroclear System. Netted instructions will be settled on a book-entry basis in the Euroclear System, thereby reducing costs significantly.

Initially, NEWEX will target potential issuers from Poland, the Czech Republic, Hungary and Russia. NEWEX expects that   investors will initially come mainly from Western Europe and will include both institutional and private investors. Ferdinand Lacina, an expert on Eastern Europe and former Austrian Minister of Finance, is Chairman of the Supervisory Board.

The Harris and Bank of Montreal stock transfer businesses employ 400 staff, of which 50 are based in Canada. Computershare Investor Services will be the name of the operating entities in the USA and Canada. This transaction adds four million shareholders and 700 clients to Computershare’s business. Following the acquisition, Computershare will service over 40 million shareholders and 3,500 clients worldwide. In a related transaction, Harris is acquiring two million existing shares in the capital of Computershare.

These acquisitions involve the transfer of approximately 1,700 bond trustee and agency relationships in the structured finance, corporate, municipal and international markets. BNY intends to provide administrative and relationship management services for these businesses through its subsidiaries in Chicago, New York, Los Angeles and other locations.

Thomas A. Renyi, chairman and chief executive officer of BNY, said: 'These acquisitions further strengthen our commitment to both our mid-western and international clients. We look forward to welcoming these important customers and providing them the combined benefits of our exceptional technology and customised relationship services.'

At the end of the 6-month phase-in period the markets must submit a study to the Commission regarding the impact of decimal pricing on trading and capacity. The study also should address whether a uniform pricing increment is needed, and if so, what that increment should be.

'We are off to an excellent start with Chase.com, which was started just six months ago,' said Bill Harrison, Chase's chairman and ceo. 'Our early success has convinced us that more resources and talent will help identify and realise Internet opportunities even more quickly.'

Neal Garonzik, vice chairman, will focus his efforts on 'high growth' areas of Chase.com, Global Private Banking, and Global Asset Management.  Denis O'Leary, formerly chief information officer and deputy head of National Consumer Services, will lead Chase.com, reporting to Garonzik.

The moves affect the custody business as well. Chase's institutional custody division, Global Investor Services (GIS), will now report jointly to Don Layton, vice chairman, and Neal Garonzik, 'for the purpose of Neal exploring strategic opportunities with Chase's equities, securities, asset management and Internet businesses'.

Harrison said: 'Our Global Investor Services business is unique in its very strong client base, global scale and the richness of its service offerings. Among senior management, Neal Garonzik has unique expertise in realising the full potential of revenue generation in our equities activities across many units, including private banking, asset management, trading and sales, and also custody. Therefore, Neal will spearhead a development effort to build additional capabilities from these activities where there is a strategic opportunity for Chase, either through internal growth, acquisitions and /or other forms of partnering. Because the custody business housed in GIS is so key to this effort, Tom Swayne, head of GIS, will report to Neal for this business development purpose, and continue to report to Don Layton.'

Chase isn't alone in having problems with its Internet business. A recent article in the Wall Street Journal outlined the difficulties being encountered by Citigroup with its e-Citi unit, led by Ed Horowitz. Three years after it was launched, e-Citi has spent an estimated $400 million, a sum that analysts say tops the outlays at other large banks. Yet Citigroup concedes it isn't where it wants to be. In an interview with the paper, Horowitz acknowledged that 'the overall execution has gone slower than I had aspired to'.

For BXS, the new link to the Euroclear System - its first with an international central securities depository – will focus initially on the processing of equities trades. BXS is the third European CSD to open a direct account in the Euroclear System in the past three months. BXS is the holding company which groups together BXS-CIK, the central securities depository of Belgium, BXS-Clearing n.v., the markets central counterparty, and the Brussels Stock & Derivatives Exchanges.

Olivier Lefebvre, Chief Executive Officer of BXS, stated: 'These links will serve to reinforce the high liquidity of Belgian securities, and the attractiveness of the Belgian marketplace to international issuers and investors. By opening a direct account with the Euroclear System, we position BXS to offer our customers rapid and cost-effective access to the leading international clearance and settlement system for internationally traded securities.'

The new arrangement, effective January 31, 2000, comes about as a result of a change to the Austrian legal environment, initiated by OeKB and Wiener Börse, which allows clearing agents to facilitate clearing and settlement for remote members.

Welcoming the announcement, Georg Zinner, Head of Securities at OeKB, said: 'This initiative underscores the prominent role that OeKB plays in opening the Austrian market to pan-European investors.' Ludwig Niessen, Head of Clearing and Compliance at WBAG, stated: 'This is a particularly important development for Wiener Börse, in view of the fact that we have also decided to take advantage of the widespread distribution channels offered by the XETRA system, Deutsche Börse’s trading platform.'

Wiener Börse AG acts as an international exchange for stocks, futures, and options from Austrian, Central and Eastern European markets. It is the result of the merger of the Vienna Stock Exchange and the Austrian Futures and Options Exchange. Oesterreichische Kontrollbank AG is Austria’s central service agency for the capital market, and acts as Austria’s Central Securities Depository and as clearing house for Wiener Börse.

27JAN00: Cap Gemini, DBS’s AssureWeb, European Fund Administration (EFA), First European Transfer Agency (FETA), Interactive Investor International (iii), Mellon Trust and Microsoft have signed a Memorandum of Understanding to facilitate the rapid establishment of e-business for the European mutual fund industry.

The consortium will define open XML message standards for domestic and cross-border trading of mutual funds, including unit trusts, OEICs and UCITS, to permit electronic trading. Analysis of the US mutual funds market and the equity trading market by Cap Gemini indicates that up to GBP6.5 billion of transactions in the UK will be traded over the internet within three years.

The introduction of common message standards will enable electronic trading of mutual funds between Internet portals and online fund supermarkets, serving both IFAs and consumers on the buy side, and fund providers and third party administrators on the sell side.

The consortium intends to have the standards ready in March, for electronic trading to commence as soon as possible. Draft formats will be available for review by all members of the European fund industry. The market will be able to use the standards immediately via the internet. They will not be dependent on the operation of any central message exchange and will be available to all IFAs, software houses, Internet portals and online fund supermarkets without any proprietary limitation or charge. To ensure full market cooperation, the message formats will be based on an existing open standard. It is expected that an organisation such as ORIGO will act as the independent custodian of the message standards.

IFA and direct transactions currently represent just GBP13.2 billion (43 per cent) of the total fund market by value, but 92 per cent by volume of trades (excluding own and tied sales). Electronic trading will enable straight through processing and will significantly cut costs for these low value, high volume transactions. This will help fund providers operate within the one per cent charging limit proposed by UK Government for CAT-marked ISAs and stakeholder pensions.

Employers Reinsurance Corporation has more than 40 offices worldwide, serving clients in property and casualty, life, healthcare, professional liability and other insurance services. Business Insurance magazine recently ranked ERC as the fourth-largest reinsurer in the world based on net written premiums. ERC has been a part of GE Capital since 1984 and is the fifth largest business within the General Electric Company of the US. GE is already a major client of State Street's.

Princeton Financial Systems is the leading provider of client/server-based portfolio accounting and management systems for the institutional investment community. Its PAM investment systems are used by more than 300 investment managers, mutual funds, insurance companies, pension funds, banks and corporate treasuries.

Vice Chairman Marc Shapiro told analysts the bank would continue revamping business lines to generate savings, which would be reinvested in faster growing businesses. Chase also said that relocations, which will see several processing and support operations moving from New York to Texas, will cost the bank a total of $360 million, with $200 million expected to be incurred this year. These steps are expected to yield USD50 million in savings in 2001 and USD130 million in savings starting in 2003.

'We were impressed with TenFold's understanding of our dynamic business and their ability to support our commitment to offering clients an innovative online securities lending capability,' stated Avi Stein, senior vice president and Global Securities Lending and Investment Products Business Executive for Chase. 'TenFold Securities LendingXpress will allow Chase to offer superior service quality to both borrowers and lenders and will better position us to react quickly to changes in the marketplace. At the same time, it stands to dramatically increase our clients' profitability, which is what our business is all about.'

TenFold claims that its Securities LendingXpress product will be the industry's first comprehensive e-business application addressing the needs of lending institutions. Borrowers and lenders will be electronically linked via the internet, allowing for the immediate exchange of information around the globe. TenFold Securities LendingXpress will allow users to perform actual end-to-end transactions online, in real-time.

The application will give Chase and its clients the ability to lend any asset to any borrower, in any market, at any time. Users will have immediate access to critical data, allowing efficient management of lending activities. In addition, the application will support straight-through processing, automating many back-office lending functions and easily interfacing with other back-office applications.

'This will ensure that the Irish equity market will have the highest levels of visibility and international access and we expect that a number of foreign stockbroking firms will join the ISE as remote members by the end of the year,' said Tom Healy, ISE Chief Executive.

Werner Seifert, CEO of Deutsche Börse said: 'Deutsche Börse is a systems house that develops systems, operates them and maximises their usage. In this business system we offer outsourcing opportunities for other exchanges.' He added that after the successful production start of the Vienna Stock Exchange on Xetra and the Helsinki Exchanges on Eurex the co-operation with the ISE again proves the attractiveness of the outsourcing solutions Deutsche Börse offers. Seifert emphasised that this joint venture is another step towards consolidation in the area of systems in Europe and towards the goal that market participants across Europe have set to the established exchanges.

Last month Deutsche Börse announced proposed changes in its corporate structure and strategy, increasing doubts about the future of the Alliance of European Stock Exchanges.