GLOBAL- ING is to outsource its international cash equities clearance and settlements in London, New York, Hong Kong and Singapore to the Bank of New York in what is Europe’s largest broker-dealer outsourcing transaction.
Approximately 100 ING staff, primarily in London, will be transferred to become employees of the Bank of New York as a result of the agreement which is the first institutional broker/dealer outsourcing arrangement in the UK.
ING, like many brokers, is looking to reduce expenses in light of unfavourable market conditions. Erik Dralans, member of the ING’s executive committee Europe describes the outsourcing arrangement as “an ideal solution”.
“It will offer us the ability to carry out a high volume of transactions efficiently, whilst also allowing us to offer variable costs to our international cash equity business,” he says.
For the Bank of New York, the agreement enhances its position as a global correspondent clearing firm, adding to BoNY’s existing institutional broker/dealer clearing operations in London, Asia the US.
In July BoNY agreed to provide stock clearing services for UK retail manager Tilney Investment Management in a move that involved 100 of Tilney’s staff transferred to BoNY. With almost 100 of ING’s staff joining BoNY now, the global clearing house boasts 300 staff in the UK.
“These two deals have accelerated our entry into the UK market, and we hope to attract other brokers which currently carry out clearing and settlement in-house”, says a spokesman at BoNY.