The Bank of New York Mellon Stock

The Bank of New York Mellon Corporation (BNY Mellon) provides a broad range of financial products and services in domestic and international markets. The company serves institutions, corporations, and high-net-worth individuals.

Segments

The company operates through three principal business segments: Securities Services, Market and Wealth Services, and Investment and Wealth Management. The company also has an Other segment, which includes the leasing portfolio, corporate treasury activities (including its securities portfolio), derivatives and other trading activity, corporate and bank-owned life insurance, renewable energy and other corporate investments and certain business exits.

Securities Services segment

The Securities Services business segment consists of two distinct lines of business, Asset Servicing and Issuer Services, which provide business solutions across the transaction lifecycle to the company’s global asset owner and asset manager clients

The Asset Servicing business provides a comprehensive suite of solutions. The company is one of the largest global custody and front-to-back outsourcing partners. The company offers services for the safekeeping of assets in capital markets globally, as well as fund accounting services, exchange-traded funds servicing, transfer agency, trust and depository, front-to-back capabilities, as well as data and analytics solutions for the company’s clients. The company delivers foreign exchange, and securities lending and financing solutions, on both an agency and principal basis. The company’s agency securities lending program is one of the largest lenders of the U.S. and non-U.S. securities, servicing a lendable asset pool in 34 separate markets. The company’s market-leading liquidity services portal enables cash investments for institutional clients and includes fund research and analytics.

The Issuer Services business includes Corporate Trust and Depositary Receipts. The company’s Corporate Trust business delivers a full range of issuer and related investor services, including trustee, paying agency, fiduciary, escrow and other financial services. The company is a leading provider to the debt capital markets, providing customized and market-driven solutions to investors, bondholders and lenders. The company’s Depositary Receipts business drives global investing by providing servicing and value-added solutions that enable, facilitate and enhance cross-border trading, clearing, settlement and ownership. The company is one of the largest providers of depositary receipts services in the world, partnering with leading companies from more than 50 countries.

Market and Wealth Services segment

The Market and Wealth Services business segment consists of three distinct lines of business, Pershing, Treasury Services and Clearance and Collateral Management, which provide business services and technology solutions to entities, including financial institutions, corporations, foundations and endowments, public funds and government agencies.

Pershing provides execution, clearing, custody, business and technology solutions, delivering operational support to broker-dealers, wealth managers and registered investment advisors (‘RIAs’) globally.

The company’s Treasury Services business is a leading provider of global payments, liquidity management and trade finance services for financial institutions, corporations, and the public sector.

The company’s Clearance and Collateral Management business clears and settles equity and fixed-income transactions globally and serves as custodian for tri-party repo collateral worldwide. The company is the primary provider of the U.S. government securities clearance and a provider of non-U.S. government securities clearance. The company’s collateral services include collateral management, administration and segregation. The company offers innovative solutions and industry expertise, which help financial institutions and institutional investors with their financing, risk and balance sheet challenges. The company is a leading provider of tri-party collateral management services globally.

Investment and Wealth Management segment

The company’s Investment and Wealth Management business segment consists of two distinct lines of business, Investment Management and Wealth Management.

BNY Mellon Investment Management is a leading global asset manager and consists of the company’s seven specialist investment firms and global distribution network to deliver a highly diversified portfolio of investment strategies to institutional and retail clients globally.

The company’s Investment Management model provides specialized expertise from seven respected investment firms offering solutions across every major asset class, with backing from the proven stewardship and global presence of BNY Mellon. Each investment firm has its own individual culture, investment philosophy and proprietary investment process. This approach brings the company’s clients clear, independent thinking from highly experienced investment professionals.

The investment firms offer a broad range of actively managed equity, fixed income, alternative and liability-driven investments, along with passive products and cash management. The company’s six majority-owned investment firms are as follows: ARX, Dreyfus, Insight Investment, Mellon, Newton Investment Management and Walter Scott. BNY Mellon owns a non-controlling interest in Siguler Guff.

In November 2022, BNY Mellon sold Alcentra (BNY Alcentra Group Holdings, Inc. and its subsidiaries).

In addition to its investment firms, Investment Management has multiple global distribution entities, which are responsible for distributing the investment solutions developed and managed by the investment firms, as well as responsibility for management and distribution of the company’s U.S. mutual funds and certain offshore money market funds.

BNY Mellon Wealth Management provides investment management, custody, wealth and estate planning, private banking services, investment servicing and information management. BNY Mellon Wealth Management has offices in the U.S. and internationally.

Wealth Management clients include individuals, families and institutions. Institutions include family offices, charitable gift programs and endowments and foundations. The company works with clients to build, manage and sustain wealth across generations and market cycles.

Other segment

The Other segment primarily includes the leasing portfolio; corporate treasury activities, including the company’s securities portfolio; derivatives and other trading activity; corporate and bank-owned life insurance; renewable energy and other corporate investments; and certain business exits.

International Operations

The company’s primary international activities consist of asset servicing in the company’s Securities Services business segment, global payment services in the company’s Market and Wealth Services business segment and investment management in the company’s Investment and Wealth Management business segment.

The company’s clients include central banks and sovereigns, financial institutions, asset managers, insurance companies, corporations, local authorities and high-net-worth individuals and family offices. Through the company’s global network of offices, the company has developed a deep understanding of local requirements and cultural needs, and the company prides itself on providing dedicated service through its multilingual sales, marketing and client service teams.

The company is a leading global asset manager. In Europe, the company maintains capabilities to service Undertakings for Collective Investment in Transferable Securities and alternative investment funds. The company offers a full range of tailored solutions for investment companies, financial institutions, and institutional investors across most European markets.

The company is a provider of non-U.S. government securities, fixed income and equities clearance, settling securities transactions directly in European markets, and using a high-quality and established network of local agents in non-European markets.

The company has extensive experience providing trade and cash services to financial institutions and central banks outside of the U.S. In addition, the company offers a broad range of servicing and fiduciary products to financial institutions, corporations and central banks. In emerging markets, the company leads with custody, global payments and issuer services, introducing other products as the markets mature. For more established markets, the company’s focus is on global investment services.

The company is also a full-service global provider of foreign exchange services, actively trading in over 100 of the world’s currencies. The company serves clients from trading desks located in Europe, Asia, and North America.

Subsidiaries

The company’s two principal U.S. banking subsidiaries engage in trust and custody activities, investment management services, banking services, and various securities-related activities. The company’s two principal U.S. banking subsidiaries are:

The Bank of New York Mellon, a New York state-chartered bank, which houses the company’s Securities Services businesses, including Asset Servicing and Issuer Services and certain Market and Wealth Services businesses, including Treasury Services and Clearance and Collateral Management, as well as the bank-advised business of Investment Management.

BNY Mellon, National Association (BNY Mellon, N.A.), a national bank, which houses.

The company’s Wealth Management business and certain activities of its Pershing businesses.

The company has four other U.S. bank and/or trust company subsidiaries concentrating on trust products and services across the United States: The Bank of New York Mellon Trust Company, National Association, BNY Mellon Trust of Delaware, BNY Mellon Investment Servicing Trust Company and BNY Mellon Trust Company of Illinois. Most of the company’s Investment Management business and Pershing businesses are direct or indirect non-bank subsidiaries of BNY Mellon.

Each of the company’s bank and trust company subsidiaries is subject to regulation by the applicable bank regulatory authority. The deposits of the company’s U.S. banking subsidiaries are insured by the Federal Deposit Insurance Corporation to the extent provided by law.

BNY Mellon’s banking subsidiaries outside the United States are subject to regulation by non-U.S. regulatory authorities in addition to the Board of Governors of the Federal Reserve System (the ‘Federal Reserve’). The Bank of New York Mellon SA/NV (‘BNY Mellon SA/NV’) is the main banking subsidiary of The Bank of New York Mellon in continental Europe. It is authorized and regulated as a credit institution by the European Central Bank and the National Bank of Belgium under the Single Supervisory Mechanism and is also supervised by the Belgian Financial Services and Markets Authority for conduct of business rules. BNY Mellon SA/NV has its principal office in Brussels and branches in Amsterdam, the Netherlands; Copenhagen, Denmark; Dublin, Ireland; Frankfurt, Germany; the City of Luxembourg, Luxembourg; Madrid, Spain; Milan, Italy; and Paris, France. BNY Mellon SA/NV’s activities are in the Securities Services and Market and Wealth Services segments of BNY Mellon with a focus on global custody, asset servicing and collateral management.

Strategy

Th company’s strategy includes, but is not limited to, improving organic growth across the company’s businesses, driving quality solutions and operating efficiencies, and expanding technology-enabled solutions.

Investment Securities

As of December 31, 2022, the company’s investment securities included U.S. treasury; agency residential mortgage-backed securities (RMBS); sovereign debt/sovereign guaranteed securities; agency commercial mortgage-backed securities (MBS); supranational securities; foreign covered bonds; collateralized loan obligations (CLOs); non-agency commercial MBS; non-agency RMBS; foreign government agencies; U.S. government agencies; state and political subdivisions; other asset-backed securities (ABS); corporate bonds; and other debt securities.

Loan Portfolio

As of December 31, 2022, the company’s loan portfolio included commercial; commercial real estate; financial institutions; lease financings; wealth management loans; wealth management mortgages; other residential mortgages; capital call financing; other; overdrafts; and margin loans.

Deposits

The company receives client deposits through the businesses in the Securities Services, Market and Wealth Services and Investment and Wealth Management segments. The company relies on those deposits as a low-cost and stable source of funding.

Supervision and Regulation

BNY Mellon engages in banking, investment advisory and other financial activities in the U.S. and 34 other countries and is subject to extensive regulation in the jurisdictions in which it operates.

BNY Mellon is subject to the U.S. LCR (liquidity coverage ratio) Rule, which is designed to ensure that BNY Mellon and certain domestic bank subsidiaries maintain an adequate level of unencumbered HQLA (high-quality liquid assets) equal to their expected net cash outflow for a 30-day time horizon under an acute liquidity stress scenario.

The Federal Deposit Insurance Act (FDI Act), as amended by the Federal Deposit Insurance Corporation Improvement Act of 1991 (‘FDICIA’), requires the Agencies to take ‘prompt corrective action’ in respect of depository institutions that do not meet specified capital requirements. FDICIA establishes five capital categories for FDIC-insured banks: ‘well capitalized,’ ‘adequately capitalized,’ ‘undercapitalized,’ ‘significantly undercapitalized,’ and ‘critically undercapitalized.’ The FDI Act imposes progressively more restrictive constraints on operations, management and capital distributions the less capital the institution holds. While these regulations apply only to banks, such as The Bank of New York Mellon and BNY Mellon, N.A., the Federal Reserve is authorized to take appropriate action against the parent BHC (bank holding company), such as the company, based on the undercapitalized status of any banking subsidiary.

BNY Mellon is subject to the U.S. LCR Rule, which is designed to ensure that BNY Mellon and certain domestic bank subsidiaries maintain an adequate level of unencumbered HQLA equal to their expected net cash outflow for a 30-day time horizon under an acute liquidity stress scenario.

The provisions of the Dodd-Frank Act commonly referred to as the ‘Volcker Rule’ prohibit ‘banking entities,’ including BNY Mellon, from engaging in proprietary trading and limit the company’s sponsorship of, and investments in, private equity and hedge funds (‘covered funds’), including the company’s ability to own or provide seed capital to covered funds.

Title VII of the Dodd-Frank Act (Dodd-Frank Wall Street Reform and Consumer Protection Act) imposes a comprehensive regulatory structure on the OTC (over-the-counter) derivatives markets in which BNY Mellon operates, including requirements relating to the business conduct of dealers, trade reporting, margin and recordkeeping. Title VII also requires persons acting as swap dealers, including The Bank of New York Mellon, to register with the CFTC (Commodity Futures Trading Commission) and become subject to the CFTC’s supervisory, examination and enforcement powers. Additionally, Title VII requires persons acting as security-based swap dealers to register with the Securities and Exchange Commission (SEC). The Bank of New York Mellon is registered as a security-based swap dealer.

In addition, because BNY Mellon is subject to supervision by the Federal Reserve, the company must comply with the U.S. prudential margin rules for variation and initial margin with respect to its OTC swap transactions. Furthermore, various BNY Mellon subsidiaries are also subject to OTC derivatives regulation by local authorities in Europe and Asia.

As required by the Dodd-Frank Act, large financial institutions, such as BNY Mellon, are required to submit periodically to the Federal Reserve and the FDIC a plan – referred to as the 165(d) resolution plan – for their rapid and orderly resolution in the event of material financial distress or failure. In addition, certain large IDIs, such as The Bank of New York Mellon, are required to submit periodically to the FDIC (Federal Deposit Insurance Corporation) a separate plan for resolution in the event of the institution’s failure. The public portions of these resolution plans are available on the Federal Reserve’s and FDIC’s websites.

BNY Mellon SA/NV is subject to MREL (minimum requirement for their own funds, (defined as regulatory capital), and eligible liabilities). The New York State Department of Financial Services (‘NYSDFS’) requires financial institutions regulated by NYSDFS, including The Bank of New York Mellon, to establish a cybersecurity program, adopt a written cybersecurity policy, designate a chief information security officer, and have policies and procedures in place to ensure the security of information systems and non-public information accessible to, or held by, third parties.

Under the final rule, a BHC, state member bank or national bank, including the company, The Bank of New York Mellon and BNY Mellon, N.A., are required to notify the Federal Reserve or OCC, as applicable, within 36 hours of incidents that could result in the banking organization’s inability to deliver services to a material portion of its customer base, disrupt the banking organization’s lines of businesses the failure of which would result in material losses, or disrupt operations the failure of which would threaten the financial stability of the U.S.

The company’s U.S. banking subsidiaries, including The Bank of New York Mellon and BNY Mellon, N.A., accept deposits, and those deposits have the benefit of FDIC insurance up to the applicable limit.

For larger institutions, such as The Bank of New York Mellon and BNY Mellon, N.A., assessments are determined based on CAMELS ratings and forward-looking financial measures to calculate the assessment rate, which is subject to adjustments by the FDIC, and the assessment base. CAMELS is an international bank-rating system where bank supervisory authorities rate institutions according to six factors. The six factors are Capital adequacy, Asset quality, Management quality, Earnings, Liquidity and Sensitivity to market risk.

Section 956 of the Dodd-Frank Act requires federal regulators to prescribe regulations or guidelines regarding incentive-based compensation practices at certain financial institutions, including BNY Mellon.

The USA PATRIOT Act of 2001 contains numerous AML requirements for financial institutions that are applicable to BNY Mellon’s bank, broker-dealer and investment adviser subsidiaries and mutual funds and private investment companies advised or sponsored by the company’s subsidiaries.

The privacy provisions of the Gramm-Leach-Bliley Act generally prohibit financial institutions, including BNY Mellon, from disclosing nonpublic personal financial information of consumer customers to third parties for certain purposes (primarily marketing) unless customers have the opportunity to ‘opt out’ of the disclosure. The Fair Credit Reporting Act restricts information sharing among affiliates for marketing purposes.

FinCEN has issued rules under the BSA that apply to covered financial institutions, including The Bank of New York Mellon and BNY Mellon, N.A., setting forth five pillars of an effective AML program: development of internal policies, procedures and related controls; designation of a compliance officer; a thorough and ongoing training program; independent review for compliance; and customer due diligence (‘CDD’).

The NYSDFS has also issued regulations requiring regulated institutions, including The Bank of New York Mellon, to maintain a transaction monitoring program to monitor transactions for potential BSA and AML violations and suspicious activity reporting, and a watch list filtering program to interdict transactions prohibited by applicable sanctions programs.

BNY Mellon is registered as an FHC under the BHC Act. The company is subject to supervision by the Federal Reserve.

The Bank of New York Mellon, BNY Mellon’s largest banking subsidiary, is a New York state-chartered bank, and a member of the Federal Reserve System and is subject to regulation, supervision and examination by the Federal Reserve, the FDIC and the NYSDFS. BNY Mellon’s national bank subsidiaries, BNY Mellon, N.A. and The Bank of New York Mellon Trust Company, National Association, are chartered as national banking associations subject to primary regulation, supervision and examination by the OCC.

The company operates a number of broker-dealers that engage in securities underwriting and other broker-dealer activities in the U.S. These companies are SEC-registered broker-dealers and members of Financial Industry Regulatory Authority, Inc. (‘FINRA’), a securities industry self-regulatory organization. BNY Mellon’s nonbank subsidiaries engaged in securities-related activities are regulated by supervisory agencies in the countries in which they conduct business.

Certain of BNY Mellon’s public finance and advisory activities are regulated by the Municipal Securities Rulemaking Board and are required under the SEC’s Municipal Advisors Rule to register with the SEC if they provide advice to municipal entities or certain other persons on the issuance of municipal securities, or about certain investment strategies or municipal derivatives.

Certain of BNY Mellon’s subsidiaries are registered with the CFTC as commodity pool operators, introducing brokers and/or commodity trading advisors and, as such, are subject to CFTC regulation. The Bank of New York Mellon is provisionally registered as a swap dealer (as defined in the Dodd-Frank Act) with the CFTC and is a member of the National Futures Association (‘NFA’) in that same capacity. As a swap dealer, The Bank of New York Mellon is subject to regulation, supervision and examination by the CFTC and NFA.

Certain of the company’s subsidiaries are RIAs, and as such are supervised by the SEC. They are also subject to various U.S. federal and state laws and regulations and to the laws and regulations of any countries in which they conduct business. The company’s subsidiaries advise both RICs, including the BNY Mellon Family of Funds and BNY Mellon ETF Funds, and private investment companies which are not registered under the 1940 Act.

Certain of the company’s investment management, trust and custody operations provide services to employee benefit plans that are subject to the Employee Retirement Income Security Act of 1974, as amended (‘ERISA’), administered by the U.S. Department of Labor. ERISA imposes certain statutory duties, liabilities, disclosure obligations and restrictions on fiduciaries, as applicable, related to the services being performed and fees being paid.

SEC Rule 6c-11 (the ‘ETF Rule’) under the 1940 Act permits ETFs that satisfy certain conditions to organize and operate without first obtaining an exemptive order from the SEC and requires an ETF to make certain disclosures, including historical data on an ETF’s premiums, discounts and bid-ask spread information, as well as the ETF’s daily portfolio holdings. The ETF Rule also requires ETFs using custom baskets to put written policies and procedures in place establishing that the custom baskets are in the best interests of the ETF and its shareholders. Pursuant to the ETF Rule, BNY Mellon has launched a number of ETFs.

The company maintains a presence in the U.K. through the London branch of The Bank of New York Mellon, The Bank of New York Mellon (International) Limited, a credit institution incorporated and authorized in the U.K., and a number of the company’s investment firms. The company maintains a presence in the EU through the Frankfurt branch of The Bank of New York Mellon, BNY Mellon SA/NV, which is headquartered in Belgium and has a branch network in a number of other EU countries, and through certain of the company’s investment firms. BNY Mellon SA/NV has a general banking license for the provision of banking and investment services.

In Europe, branches of The Bank of New York Mellon are subject to regulation in the countries in which they are established, in addition to being subject to oversight by the U.S. regulators referred to above. BNY Mellon SA/NV is a public limited liability company incorporated under the laws of Belgium, holds a banking license issued by the National Bank of Belgium and is authorized to carry out all banking and savings activities as a credit institution. The European Central Bank (the ‘ECB’) has responsibility for the direct supervision of significant banks and banking groups in the Euro area, including BNY Mellon SA/NV. The ECB’s supervision is carried out in conjunction with the relevant national prudential regulator (the National Bank of Belgium in BNY Mellon SA/NV’s case), as part of the Single Supervisory Mechanism. BNY Mellon SA/NV conducts its activities in Belgium, as well as through its branch offices in Denmark, France, Germany, U.K., Ireland, Italy, Luxembourg, the Netherlands, and Spain.

Certain of the company’s financial services operations in the U.K. are subject to regulation and supervision by the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA). The PRA is responsible for the authorization and prudential regulation of firms that carry on PRA-regulated activities, including banks. PRA-authorized firms are also subject to regulation by the FCA for conduct purposes. In contrast, FCA-authorized firms (such as investment management firms) have the FCA as their sole regulator for both prudential and conduct purposes. As a result, FCA-authorized firms must comply with FCA prudential and conduct rules and the FCA’s Principles for Businesses, while dual-regulated firms must comply with the FCA conduct rules and FCA Principles, as well as the applicable PRA prudential rules and the PRA’s Principles for Businesses.

The PRA regulates The Bank of New York Mellon (International) Limited, the company’s U.K.-incorporated bank, as well as the London branch of The Bank of New York Mellon. Certain of BNY Mellon’s U.K.-incorporated subsidiaries are authorized to conduct investment business in the U.K. Their investment management advisory activities and their sale and marketing of retail investment products are regulated by the FCA. Certain U.K. investment funds, including investment funds of BNY Mellon, are registered with the FCA and are offered for sale to retail investors in the U.K.

BNY Mellon has several U.K.-domiciled investment firms that are subject to the U.K. Investment Firms Prudential Regime.

The company’s businesses servicing regulated funds in Europe and the company’s Investment Management businesses in Europe are also affected by the revised directive governing the Directive on Undertakings for Collective Investment in Transferable Securities

History

The Bank of New York Mellon Corporation, a Delaware corporation, was founded in 1784. The company was incorporated in 2007.