Asset Protection – BNY Mellon Pershing

BNY Mellon Pershing has been a leading global provider of financial business solutions for over 70 years and serves many of the world’s most respected financial organizations, remaining committed to the safekeeping, servicing, segregation and reporting of assets held in custody.

Financial Strength

BNY Mellon Pershing’s core financial strength provides the foremost measure of the protection of assets held in our custody. Our parent company, BNY Mellon, is a leading provider of financial services for institutions, corporations and high-net-worth individuals. BNY Mellon Pershing’s financial strength does not protect against loss due to market fluctuation.

BNY Mellon Pershing

  • Over $1.8 trillion in assets held in custody
  • Net capital of $2 billion—well above the minimum requirement

BNY Mellon

  • $33.6 trillion in assets under custody and administration
  • $1.8 trillion in assets under management
  • Total shareholders’ equity U.S.: $41.5 billion
  • Market capitalization U.S.: $53.9 billion

Evaluation and Segregation of Assets

As required, BNY Mellon Pershing segregates investor assets, which are fully paid-for, from its own assets. Therefore, in the unlikely event of the financial failure of BNY Mellon Pershing, investors’ fully paid-for assets will remain separate from BNY Mellon Pershing’s own assets. In addition to this, BNY Mellon Pershing takes the following measures to protect investors’ assets:

> Annual audit by a major independent audit firm and the audit team at our parent company, BNY Mellon

> An annual SSAE18 SOC2 audit is performed (as required) by a major independent audit firm to provide additional evaluation of the design and operating effectiveness of BNY Mellon Pershing’s internal controls related to:

  • Account transfers
  • Clearance and settlement
  • Confirmations and cash management functions
  • Corporate actions
  • Customer billing
  • Foreign exchange and prime brokerage controls
  • Interest
  • Margin monitoring
  • Order and trade processing
  • Physical custody
  • Pricing
  • Statements

> BNY Mellon Pershing is required to maintain enough liquid assets, net of any liabilities, to ensure the return of investors’ fully paid-for assets in the event of BNY Mellon Pershing’s failure and liquidation

> Quarterly vault inspection and securities verification to confirm custody of fully paid-for investors assets

SIPC® Coverage

BNY Mellon Pershing is a member of the Securities Investor Protection Corporation (SIPC®).

> As a result, securities in your account are protected up to $500,000 (of which $250,000 can be for claims for cash awaiting reinvestment). For details, please see www.sipc.org

> Please note that SIPC does not protect against loss due to market fluctuation

Excess of SIPC Coverage Led by Lloyd’s of London

> In addition to SIPC protection, BNY Mellon Pershing provides coverage in excess of SIPC limits from Lloyd’s of London, in conjunction with other insurers.

> The excess of SIPC coverage provides the following protection for assets held in custody by Pershing and its London-based affiliate, Pershing Securities Limited:

  • An aggregate loss limit of $1 billion for eligible securities— over all client accounts
  • A per-client loss limit of $1.9 million for cash awaiting reinvestment—within the aggregate loss limit of $1 billion

> The $1 billion aggregate loss limit for eligible securities is the highest level of coverage that is available in the industry today.

> The excess of SIPC coverage does not protect against loss due to market fluctuation.

> An excess of SIPC claim would only arise when BNY Mellon Pershing failed financially and client assets for covered accounts, as defined by SIPC (for Pershing LLC accounts) or the Financial Services Compensation Scheme (FSCS) (for Pershing Securities Limited accounts), cannot be located due to theft, misplacement, destruction, burglary, robbery, embezzlement, abstraction, failure to obtain or maintain possession or control of client securities,
or to maintain the special reserve bank account required by applicable rules.

> The leader of the excess of SIPC coverage program is Lloyd’s of London. Lloyd’s currently has an A (“Excellent”) rating with “Stable Outlook” from A.M. Best and an A+ (“Strong”) rating with “Stable Outlook” from Fitch Ratings and Standard & Poor’s® (S&P®). These ratings are based on the financial strength of the company and are subject to change by the rating agencies at any time. For more information about Lloyd’s of London, please see www.lloyds.com.

BNY Research and Commentary

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