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BNY Mellon launches subsidiary to expand on tri-party repurchases business

Bank of New York Mellon (BK) created a subsidiary that will focus on clearance of U.S. Treasuries and settlement of U.S. tri-party repurchases, according to a news release.

The new unit, BNY Mellon Government Securities Services, will add to the custody bank's already dominant position in tri-party repo on U.S. Treasuries. Its creation comes as J.P. Morgan Chase winds down its tri-party U.S. Treasury repo business, making BNY Mellon the lone major service provider when the J.P. Morgan business shutters at the end of 2017.

When J.P. Morgan Chase announced in July 2016 that it would leave the business, BNY Mellon already had 85% of the market share of U.S. tri-party repos with J.P. Morgan holding a share of about 15%.

"BNY Mellon recognizes its important role and responsibility in the financial industry for the smooth and reliable functioning of this critical market," Gerald Hassell, chairman and CEO of Bank of New York Mellon, said in the release.

Brian Ruane was named CEO of the new subsidiary and Andrea Pfenning was named president and chief operating officer. Mr. Ruane was executive vice president, CEO of broker-dealer services and head of banks, broker-dealer and investment advisers market and alternative asset managers at BNY Mellon, according to the custody bank's website. Ms. Pfenning was managing director, broker-dealer services. It could not be immediately learned if their previous positions would be filled.