Merrill Lynch Creates Securities Services Division to Expand Clearing, Settlement, Custody & Financing Businesses.

Business Editors

NEW YORK--(BUSINESS WIRE)--May 2, 2000

Merrill Lynch announced today that it is consolidating and significantly expanding its securities clearing, settlement, custody and financing businesses. The firm has created a new business, Merrill Lynch Securities Services Division (MLSSD), comprised initially of existing operations from different parts of the firm, that will serve as the platform for future aggressive growth of the business.

Richard A. Dunn, senior vice president and currently the head of Merrill Lynch's Corporate Risk Management Group, will become president and CEO of MLSSD with responsibility for management of the new business. Arthur L. Thomas, senior vice president and head of Global Operations Services, will become chief operating officer.

MLSSD will be part of Merrill Lynch's Corporate & Institutional Client Group, reporting to Thomas W. Davis, president of CICG.

"As market structures continue to evolve and trading volumes continue to increase, we see outstanding opportunities for Merrill Lynch to provide clearing, settlement, custody and financing services to a greatly increased number of clients," Mr. Davis said. "We envision substantial growth, both in the U.S. and globally, and excellent opportunities for stable, fee-based income in this business."

The new business unit will be created by merging existing support units and selected businesses. It will include functions such as clearing, settlement, custody and securities financing, and businesses such as prime brokerage and stock loan, as well as related activities. It will also work closely with the debt and equity divisions in CICG, and with Merrill Lynch's private client and asset management businesses.

In addition to processing its own significant transaction volume, Merrill Lynch already provides clearing and settlement services to other broker-dealers, processing an industry-leading average of 1.2 million U.S. equity trades per day.

For the past 18 months, Mr. Dunn has been head of Corporate Risk Management, which is responsible for Merrill Lynch's market and credit risk management functions worldwide. Since joining Merrill Lynch in 1990, Mr. Dunn has also worked as co-chief of the firm's equity division; head of the firm's debt and equity divisions in Japan; and head of Merrill Lynch debt markets group in Europe, the Middle East and Africa.

Since 1991, Mr. Thomas has been head of Global Operations Services, providing worldwide operations support for all of Merrill Lynch's debt, equity and futures businesses. He began his career at the firm in 1971 and held a number of key management positions, including head of capital markets operations, prior to his current post. He currently serves as Chairman of the Global Straight Through Processing Association, as Co-Chair of the SIA T+1 Steering Committee, and on the Board of the Euroclear Clearance System. He is a past Director and Chairman of both the National Securities Clearing Corporation and the Government Securities Clearing Corporation.

Merrill Lynch is one of the world's leading financial management and advisory companies with offices in 43 countries and total client assets exceeding $1.8 trillion. As an investment bank, it is the top global underwriter and market maker of debt and equity securities and a leading strategic advisor to corporations, governments, institutions, and individuals worldwide. Through Merrill Lynch Investment Managers, the company is one of the world's largest managers of financial assets.