The Bank of New York Comments on New SEC Guidance on Soft Dollars; Preserving the safe harbor for research payments while tightening the definition of research strikes the right balance, according to Bank executives

Business Wire, Oct 20, 2005

NEW YORK -- The Bank of New York applauded the Securities and Exchange Commission's publication today of interpretive guidance on money managers' use of client commissions to pay for brokerage and research services under Section 28(e) of the Securities Exchange Act of 1934. The new guidance, which will become final following a 30-day comment period, preserves the "safe harbor" allowing research to be paid for with trade commissions while clarifying the definition of "research" protected under Section 28(e).

Joseph M. Velli, senior executive vice president of The Bank of New York and head of BNY Securities Group, said, "We are pleased to learn that after careful deliberation the SEC has reaffirmed the vital role of research in the equities trading process and focused reform measures where they belong - on ensuring that the services paid for with trade commissions are those that truly support the money manager's decision-making. We look forward to the next phase of the SEC's soft dollar deliberations, which we understand will focus on requiring more disclosure of the services purchased with trade commissions."

John D. Meserve, president of BNY Research, Commission and Payment Services LLC, said, "Over the past two years, The Bank of New York has made the case before Congress and the SEC that independent and proprietary research should compete on a level playing field, which means preserving the safe harbor for research while requiring more transparency. We are particularly pleased that the new SEC guidelines spell out in no uncertain terms that independent and proprietary research should receive equal treatment."

BNY Securities Group is the global agency brokerage, clearing and financial services outsourcing sector of The Bank of New York Company, Inc. It provides institutions, broker-dealers and corporations with a broadly diversified suite of services and "The Power of Choice" through multiple business models. Through its broad range of businesses, BNY Securities Group offers creative solutions in trade execution, commission management, independent research, securities clearing and financial services outsourcing. BNY Securities Group is the largest provider of commission management services, has 17 New York Stock Exchange seats, and offers global execution and clearing services in over 80 markets with offices in the U.S., Europe, Asia, and Australia. BNY Securities Group is an organization consisting of several broker-dealers and other companies.

The Bank of New York Company, Inc. (NYSE: BK) is a global leader in providing a comprehensive array of services that enable institutions and individuals to move and manage their financial assets in more than 100 markets worldwide. The Company has a long tradition of collaborating with clients to deliver innovative solutions through its core competencies: securities servicing, treasury management, investment management, and individual & regional banking services. The Company's extensive global client base includes a broad range of leading financial institutions, corporations, government entities, endowments and foundations. Its principal subsidiary, The Bank of New York, founded in 1784, is the oldest bank in the United States and has consistently played a prominent role in the evolution of financial markets worldwide. Additional information is available at www.bankofny.com.