What is global clearing?
BNY’s Global Clearing service provides market participants with access to securities clearing and settlement services that allow them to transact and settle trades in the global equity and fixed income markets. Recently, we aligned our outsourced clearing and self-clearing solutions to one global clearing platform as part of our effort to be more for our clients and run our businesses better. This alignment positions us to deliver a more innovative, integrated, and robust clearing offering. With teams based across the globe, our platform ensures 24-hour coverage. BNY clears and settles in excess of US$15 trillion of securities transactions daily, and provides access to more than 100 markets across the globe. BNY’s Global Clearing offering is uniquely positioned in the financial markets due to the scale and breadth of the services we offer, including connectivity with our execution, securities finance, treasury services and collateral management solutions.
What clearing services does BNY offer its clients?
For self-clearing financial institutions, we provide settlement, financing, liquidity, and treasury services globally. Where clients require additional support, we offer an outsourced clearing service model. This service includes general clearing memberships, business process outsourcing, and settlement in 10 direct markets and global support in more than 100 other markets. BNY provides all aspects of trade processing as a single global provider. This includes providing middle office support, margin financing, short covering, and support of a client’s books and records.
In 2025, BNY will introduce a new flexible financing solution that will allow clients to operate on a continuum between self-clearing and outsourced clearing across asset classes. This solution will provide a choice for clients who may need a combination of both outsourced and self-clearing models by retaining self-financing capabilities while outsourcing clearing and settlement. By decoupling these functions, clients can focus on managing market, credit, and liquidity risks directly, while outsourcing operations and settlement to a specialised provider.
Moreover, by outsourcing clearing and settlement, clients can leverage economies of scale and convert fixed costs into variable costs that align with their transaction volumes, which can lead to a significant reduction in fixed operations cost. This separation of responsibilities can bring a more focused and effective risk management strategy, as clients can allocate resources to the areas that have the greatest impact on their financial stability and performance. This flexible financing solution will mark a new chapter in BNY’s Global Clearing offering and further reinforces the important role that we play in the global financial system.
Who are your clients?
At BNY, the financial institutions we serve use a number of our Global Clearing and settlement services. Global Clearing clients include full-service banks, institutional broker-dealers, and US regional banks. Self-clearing banks, broker-dealers and hedge funds come to us because they require large scale settlement efficiency and APIs to increase automation. Additionally, we service US regional banks and broker-dealers that primarily outsource their clearing to us and need a flexible self-financing solution to fund their growing balance sheet or to optimise financing costs. Global Clearing services well capitalised retail broker platforms that require the global scale that BNY provides across custody, settlement, payments, FX, and securities lending.
What are some of the trends you see in the market?
The demand for global clearing services is generally increasing. This is in part driven by the move to T+1 and by the US Securities and Exchange Commission (SEC) US Treasury central clearing mandate. The move to reduce the time between trade execution and settlement is a continuing theme. We saw this in 2024 with the change to T+1 in the US and Canada, and we expect that European and UK markets will follow suit in 2027.
The topic of artificial intelligence and how it can be used to improve market settlement is also on clients’ minds. For instance, AI is employed in indicative trade analytics to identify when a trade may fail early in the process, by analysing historical data, trading flows, and spotting irregularities, thereby improving market resiliency, and creating settlement efficiencies. The SEC US Treasury central clearing mandate is set to change the US Treasury market, with market participants preparing to reorganise their trading, operations, and technology. The mandate requires covered clearing agencies in the US Treasury market to implement policies and procedures that necessitate their members to submit eligible secondary market transactions for clearing.
The rule outlines a phased implementation for central clearing, with a deadline of 31 December 2025 for cash market trades, and 30 June 2026 for repo market transactions. The rule will create significant demand for access to clearing services, as it expands the scope of central clearing to encompass the interdealer cash market segment and the non-centrally cleared bilateral and triparty repo market segments. It will require market participants to determine in-scope activity as well as an access model and provider. For us, this creates opportunities to help clients centrally clear their trades using our sponsored services or agent clearing service model.
What are your future growth plans?
As the market develops, the technology and infrastructure required to trade, clear, and finance securities globally will become more important than ever. We continue to invest in the safety and reliability of our platform because resiliency is always a priority for our clients. In the short term we intend to expand the number of markets in which we clear and settle for existing global clearing clients and add new clients with our integrated self-clearing and outsourced clearing offering with a focus on settling fixed income, equities, listed options, and ETFs. 2025 will mark an important new chapter in the market’s evolution with BNY’s new Flexible Financing solution, combining the operational efficiencies of outsourcing with the financial control of self-financing. We are excited to add more services, more markets, and continue to partner with our clients
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Stephen Howard
Image: Brian Ruane 
