The Servicing and Fiduciary businesses segment comprises the Company’s core services,
including securities servicing, global payment services, and private client services
and asset management. These businesses all share certain favorable attributes:
they are well diversified and fee-based; the Company serves the role of an intermediary
rather than principal, thereby limiting risk and generating more stable earnings
streams; and the businesses are scalable, which result in higher margins as revenues
grow. Long-term trends that favor these businesses include the growth of financial
assets worldwide, the globalization of investment activity, heightened demand
for financial servicing outsourcing, and continuing structural changes in financial
markets.
Securities servicing provides financial institutions, corporations and financial
intermediaries with a broad array of products and customized services for every
step of the investment lifecycle. The Company facilitates the movement, settlement,
recordkeeping and accounting of financial assets around the world by delivering
timely and accurate information to issuers, investors and broker-dealers. The
Company groups its securities servicing businesses into four categories, each
comprised of separate, but related businesses. Issuer services includes corporate
trust, depositary receipts and stock transfer. Investor services includes global
fund services, global custody, securities lending, global liquidity services
and outsourcing. Broker-dealer services includes government securities clearance
and collateral management. Execution and clearing services includes in the execution
area institutional agency brokerage, electronic trading, transition management
services, and independent research. Through Pershing, the clearing part of the
business provides clearing, execution, financing, and custody for introducing
brokers-dealers. The Servicing and Fiduciary segment also includes customer-related
foreign exchange.
In issuer services, the Company’s ADR business has over 1,180 programs representing
60 countries. As a trustee, the Company provides diverse services for corporate,
municipal, mortgage-backed, asset-backed, derivative and international debt
securities. Over 90,000 appointments for more than 30,000 worldwide clients
have resulted in the Company being trustee for more than $2.75 trillion in outstanding
debt securities. The Company is the third largest stock transfer agent representing
over 1,950 publicly traded companies with over 19 million shareholder accounts.
In investor services, the Company is the world’s largest custodian. The Company
is the second largest mutual fund custodian with $1.3 trillion in total assets.
The Company is the largest U.K. custodian. The Company services over 20% of
total exchange traded fund industry assets. The Company acts as trustee/depositary
to more than 350 client trusts and open ended investment companies in the UK
and over 700 across Europe. In securities lending, the Company is the largest
lender of U.S. Treasury securities and depositary receipts.
The Company’s broker-dealer services business clears approximately 50% of U.S.
Government securities. With over $925 billion in tri-party balances worldwide,
the Company is the world’s largest collateral management agent.
The Company’s execution and clearing services business is the largest global
institutional agency brokerage organization. In addition, it is the world’s
largest institutional elective broker for global execution. The Company provides
execution, clearing and financial services outsourcing solutions in over 80
global markets, executing trades for 580 million shares, and clearing 600,000
trades daily. The Company utilizes 21 seats on the New York Stock Exchange.
Pershing services over 1,100 introducing broker firms and registered investment
advisors who collectively represent nearly 6 million individual investors.
Global payment services facilitates the flow of funds between the Company’s
customers and their clients through such business lines as funds transfer, cash
management and trade services. Private client services and asset management
includes traditional banking and trust services to affluent clients and investment
management services for institutional and high net worth clients.