| International clearing company Pershing Securities sets up Irish base |
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| Pershing Securities International Ltd, a subsidiary of The Bank of New York, has set up a Dublin office to provide financial services outsourcing, including clearing, settlement, custody and other administrative services on a Model A and Model B basis to Irish stockbroking firms and other firms located outside the UK. |
The company intends to hire 12 staff, and has also been admitted as a new member firm of the Irish Stock Exchange, but will be restricted to providing settlement and clearing services on a Model A and Model B basis only. It will also be authorised to provide nominee holding, custody and safekeeping facilities.
Under a Model A arrangement Pershing Securities International provides a ‘back-office for hire’ service, which involves the mechanics of the clearing process being outsourced to Pershing but nothing else. The correspondent continues to use its own name and balance sheet to support transactions and has responsibility for best execution, client suitability and other related issues.
Under a Model B arrangement, Pershing Securities International Ltd will become the legal counterparty for trades and will adopt the settlement risk associated with those trades and as a result has a contractual obligation with the underlying client. This means that Pershing assumes full legal liability for the trade and responsibility for settlement and the transfer of stock from seller to buyer, managing the link with CREST. Pershing was founded in the USA in 1939. |
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| Article appeared in the February 2004 issue.
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