Good morning, ladies and gentlemen, and welcome to the Second Quarter 2014 Earnings Conference Call hosted by BNY Mellon. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference call and webcast will be recorded and will consist of copyrighted material. You may not record or rebroadcast these materials without BNY Mellon's consent. I would now turn the call over to Mr. Izzy Dawood. Mr. Dawood, you may begin.

Thanks, Wendy, and welcome, everyone. With us today are Gerald Hassell, our Chairman and CEO; Todd Gibbons, our CFO, as well as our executive management team. Before we begin, let me remind you that our remarks today may include forward-looking statements. Actual results may differ materially from those indicated or implied by the forward-looking statements as a result of various factors. These factors include those identified in the cautionary statement in the press release and those identified in our documents filed with the SEC that are available on our Web site bnymellon.com. Forward-looking statements in this call speak only as of today, July 18, 2014, and we will not update forward-looking statements. Our press release and earnings review are available on our Web site, and we'll be using the earnings review to discuss our results. Now I would like to turn the call over to Gerald.

Great, thanks, Izzy and welcome everyone and thanks for joining us this morning. So a few key takeaways for the quarter, we’re attacking our expense base, as we continue to align our operating model with the reality of the macro environment. We are absolutely committed to aggressive expense management and to reducing structural costs and it’s paying off, helping us generate positive operating leverage during the quarter. Investment management fees and most of our investment services fees continue to grow, demonstrating our ability to meet the increasingly complex investing needs of our clients. Our capital position remains strong, adds to our ability to generate capital, providing us with the financial flexibility to continue to return capital to shareholders. So looking at our performance during the quarter. As you saw from the release, we reported earnings of $0.48 per share which included a $0.14 per share charge covering two items we previously disclosed. One was the charge related to certain investment management funds, and two, a severance charge related to progress in streamlining our organization which I might add, is expected to benefit our expense run rate in excess of $120 million charge. And we should begin to see the benefits this year with a full effect in 2015. Now when you add these items back, one might say that we earned $0.62 per share, but we think we really owned about $0.58 per share on an operating basis. So, turning to revenues. Total revenues were 3.7 billion. Investment management had a good quarter and continues to demonstrate why we value this business. Investment management and performance fees were up 4% year-over-year and they were also up 5% sequentially. Assets under management increased 15% year-over-year to a record $1.64 trillion. And we are continuing to execute on our initiatives to drive…

Thanks, Gerald and good morning everyone. My comments will follow the quarterly earnings review beginning on Page 2. As Gerald knows EPS was $0.48, the $0.48 include the $0.14 for the previously disclosed items. It also includes the benefit of approximately $0.04 between the credit provision which was negative for the period, as well as a little bit higher than normal investment and other income, so all in we view it as about $0.58 quarter. Looking at the numbers on a year-over-year basis total revenue was 3.7 billion, investment services fees were down 1% we saw some strength in asset service and clearing services but that was more than offset by the weakness in issuer services and we’ll talk about that in a minute. Investment management and performance fees were up 4% and if you exclude money market fee waivers they were up 5%. FX was down on the lower volatility numbers and NIR was down 5%. Expenses on an adjusted basis were down 4% so for the quarter, our operating revenues were a little soft down about 2% year-over-year, but we more than offset that by the decline in expenses enabling us to generate 200 basis points of positive operating leverage. We do expect the revenue growth rate to recover in the third quarter. Turning to Page 4, what we call our some business metrics that help explain our underlying performance, you can see that we had record AUM of 1.64 trillion that’s up 15% from a year ago, driven by higher market values as well as new business. During the quarter we had net long-term outflows of $13 billion and short-term outflows of $18 billion. The long-term outflows were primarily driven by our liability driven investments AUM where we had one client that opted to bring that service…

Great. Thanks Todd. And Wendy I think we can now open it up for questions.

and:

Thank you. We are now ready to begin the question-and-answer session. (Operator Instructions) Our first question today is from Ashley Serrao with Credit Suisse.

Good morning. Gerald, you just come off of a sizable expense program, you recently announced for the expense initiative that is supposed to begin in the second half of this year, yet you found some levers to pull this quarter as well. So my question is what else are you evaluating today? How quickly can you deliver? And should we expect this 4% year-over-year decrease to actually build going into the back half of the year or is there some investment spend taken into consideration as well? Credit Suisse: Good morning. Gerald, you just come off of a sizable expense program, you recently announced for the expense initiative that is supposed to begin in the second half of this year, yet you found some levers to pull this quarter as well. So my question is what else are you evaluating today? How quickly can you deliver? And should we expect this 4% year-over-year decrease to actually build going into the back half of the year or is there some investment spend taken into consideration as well?

Well, thanks Ashley for the question. We continuously look at all of our expenses as a way to try to control them better in recognition of the macro environment that we’re in and rightsizing the size of company to the reality of the revenues that are being generated. So it’s a continuous process, that's why we haven’t announced any program, we haven’t announced any separate initiative. It is day in and day out reduced any expenses and improving our operations and efficiency. I feel good about what we have achieved so far in the first half of this year. We’re looking to do more in the second half. The severance cost that we are taking this quarter, the run rate will improve and offset the normal merit increase in the second half of this year. So I feel good about going into the second half in terms of continuing to control expense as well.

Got it. And then can you remind us of what your ROE and ROT targets are? And give us a sense of where you think you can go without any help from rates and how quickly you think you can get there? Credit Suisse: Got it. And then can you remind us of what your ROE and ROT targets are? And give us a sense of where you think you can go without any help from rates and how quickly you think you can get there?

Yes, we had indicated a few years back that our target on ROE was about 10%, and return on tangible common equity would be substantially higher than that, so far the first quarter, I mean excuse me for the second quarter return on tangible common equity was about 18%. We think we can continue -- in the first quarter we’re going to be around 8% and 18%. We think they can continue to grind that up into that 10% range without a significant move with rates or volatility. Obviously I think we saw move in a better market conditions here than we would see a much more significant jump.

Alright, thank you for taking my questions. Credit Suisse: Alright, thank you for taking my questions.

Thanks, Ashley.

Thanks, Ashley.

Thank you. The next question is from Alex Blostein with Goldman Sachs.

Thanks guys good morning. A quick follow-up on the numbers I guess, on expenses and then a big picture question after. So, lots of moving pieces, you guys announced additional measures and you just have had obviously the -- some of the benefits will come in next six months or so in comp, but I guess if you look at the expense base overall, 2.7ish billion dollar run rate in the quarter today, like ex one of the, ex some of the one timers. Is that a fair run rate do you guys expect to grow that as the business continues to grow? Or is this kind of the run rate in expenses that we should think about over the next six months to 12 months as you realize some of these savings albeit offset by some of the goal initiatives? Goldman Sachs: Thanks guys good morning. A quick follow-up on the numbers I guess, on expenses and then a big picture question after. So, lots of moving pieces, you guys announced additional measures and you just have had obviously the -- some of the benefits will come in next six months or so in comp, but I guess if you look at the expense base overall, 2.7ish billion dollar run rate in the quarter today, like ex one of the, ex some of the one timers. Is that a fair run rate do you guys expect to grow that as the business continues to grow? Or is this kind of the run rate in expenses that we should think about over the next six months to 12 months as you realize some of these savings albeit offset by some of the goal initiatives?

Yes Alex, it’s Todd, we are working real hard to try to maintain this expense level or keep it from growing so that the actions that we have taken around the headcount, the actions that we have taken around occupancy, the very careful analysis of all of our discretionary spend, we want to try to keep overall expenses flat and some of the benefit of that we are using to invest in some of the new revenue streams that Gerald has talked about, but all-in-all, there will obviously be some noise in those numbers we’re trying to keep it as flat as we can.

Got it, that’s helpful. And the second question, just on the current environment, over the last three to four months or so we’ve seen increased pressure on the bigger banks to shrink the balance sheets to get faster compliance with SLR. You see that resonate in the retail markets declining 10ish percentage year-over-year. Just curious to think about how that impacts your business holistically. You guys are obviously a big tri-party repo manager. So curious to see how that kind of flows through to your operations, and just overall given the fact that you are big counter-party to a lot of the banks on Wall Street. Is that having any sort of impact on the business overall? Goldman Sachs: Got it, that’s helpful. And the second question, just on the current environment, over the last three to four months or so we’ve seen increased pressure on the bigger banks to shrink the balance sheets to get faster compliance with SLR. You see that resonate in the retail markets declining 10ish percentage year-over-year. Just curious to think about how that impacts your business holistically. You guys are obviously a big tri-party repo manager. So curious to see how that kind of flows through to your operations, and just overall given the fact that you are big counter-party to a lot of the banks on Wall Street. Is that having any sort of impact on the business overall?

Yes Alex, great question. Certainly some of our largest clients are shrinking their balance sheets and reducing their repo positions. So what’s interesting is our tri-party repo program has essentially been flat so as the dealers in the U.S. have shrunk the marketplace the global tri-party program has increased. So we are able to maintain the revenues and their profitability in the business and get a good return on the investments we have made in the tri-party repo reform program. There is no question that as the big dealers in the U.S. shrink their activities, there is some impact in our revenue streams there. But we are making up for it through enhanced services and capabilities in other places like collateral services. Collateral services, as you may recall was originally designed for the sales side, the buyer side is the one that’s going to serve using it much more heavily. And so we feel very good about our position to be able to offset the declines in the large broker-dealers with more activity from other clients.

Got it, great. Thanks so much guys. Goldman Sachs: Got it, great. Thanks so much guys.

Thank you. The next question is from Betsy Graseck with Morgan Stanley.

Hi, two questions, first on the corporate trust, you indicated that, you went through the review and decided to retain it, could you just give us a little bit more color on the ends announced into that decision? Morgan Stanley: Hi, two questions, first on the corporate trust, you indicated that, you went through the review and decided to retain it, could you just give us a little bit more color on the ends announced into that decision?

Sure Betsy thanks for the question. When we said -- in May, when we made more public that we are exploring this, we said at the time, let someone was willing to pay us a premium value for this business, we wouldn’t sell it, because we like the business, we like the attributes of it. It’s a fee-based business. It has future upside potential with a more normalized monetary policy and is structured notes and mortgage backed securities come back on. We see light at the end of the tunnel. We would only sell it if in fact someone would pay us the premium what we thought the value of these businesses were it’s a challenging environment for someone to acquire something of this size and complexity. And so we decided that we couldn’t get the kind of premium that we thought that this business was worth, and we think that it’s much more valuable in our hands and we can continue to build upon it and leverage it, and it’s a great business. And that’s why I said we have always liked it. It was only a question whether it was more valuable to someone else than versus us.

Okay. So, I mean obviously the Street know that there is a increased activism in the Company. And I guess the underlying question is, was this undertaken impart to answer questions to those folks or were you able to get to higher ROE, RTCE expectations the work you’re doing now on the expense side? Morgan Stanley: Okay. So, I mean obviously the Street know that there is a increased activism in the Company. And I guess the underlying question is, was this undertaken impart to answer questions to those folks or were you able to get to higher ROE, RTCE expectations the work you’re doing now on the expense side?

Well, the consideration to begin we have started a long time ago, so let’s start with that. Our Board has always been very active and we as a management team have been very active. And looking at our -- all of our portfolio of businesses and making sure that they’re best held in our hands versus someone else. And on corporate trust in some ways it was a simple math in a low interest rate environment with a level of deposits that were generated, if someone could make better use of those deposits and get a better margin on it and pay us a premium for the business that’s when we would consider. To the extent that someone couldn’t take advantage of it, we’re happy to have the business and continue to own it and grow it and that’s our leading market share of business. So that was the core reason for that. We think we can achieve our capital ratios, our leverage ratios, our liquidity coverage ratios, all within our own needs, irrespective of retaining the corporate trust business.

Got it. And then just separately, kind of ties into the collateral management question earlier, but as the fed starts to well ends tapering and then starts to increase reversed repo program, obviously you’re in the middle of that. And with money market funds management product you have got as well as with the tri-party exposure that you’ve got, maybe you could get, you’re in a unique position to give us some color on how you think that higher increased RRP program is going to impact the financial markets? Morgan Stanley: Got it. And then just separately, kind of ties into the collateral management question earlier, but as the fed starts to well ends tapering and then starts to increase reversed repo program, obviously you’re in the middle of that. And with money market funds management product you have got as well as with the tri-party exposure that you’ve got, maybe you could get, you’re in a unique position to give us some color on how you think that higher increased RRP program is going to impact the financial markets?

Well, I’ll start with part of the answer and then I’ll turn it over Todd, Todd has become a student of this as well as Curtis. We are the vehicle through which the reserve repo program of the Fed is -- we’re the mechanism for allowing it to happen in the marketplace or for them to put the program in place. So and the Fed is a client of ours in that regard and so we do see the activity running through us and we’re not going to violate any confidences there. But I think it is certainly one of the tools in the Fed’s tool box in terms of managing monetary policy and interest rates. And so maybe with that I’ll turn it over to Todd or Curtis.

Yes. I would just add Betsy that given the new liquidity and capital rules it’s going to be difficult for the Fed to open market transactions the way they’ve done in the past, hence the reserve repo program where they go directly to money market funds came into place. I think there is some question about just how much the Fed wants to expand that program. And obviously if they do expand it they would do through the tri-party repo so we do see that activity. The other alternative that they have to increasing interest rates or drain it’s to either sell some of the assets that they have or increase the interest that they pay on access reserves or in this term deposit facility that they have in the banking system. So if they do reserve repo the cash will come out of the banking system and it will go into money market funds based on price, and then the banking system would have to bid against that some of the cash that went into those funds would come back into the banking system. But I think it composites it’s kind of that simple, and as reserve repo grows the access reserves should decline.

Thank you. The next question is from Glenn Schorr with ISI.

Hi, thanks very much. So the actions that you’d described taken to offset some of the lower rates and the actions in Europe, I am curious if you feel that has any material change on your asset sensitivity once all the changes are in motion I heard you on the revenue neutrality, but just curious on what that means in rising rate environment in the U.S.? ISI Group: Hi, thanks very much. So the actions that you’d described taken to offset some of the lower rates and the actions in Europe, I am curious if you feel that has any material change on your asset sensitivity once all the changes are in motion I heard you on the revenue neutrality, but just curious on what that means in rising rate environment in the U.S.?

Yes. As you can tell from our NIR position we’ve taken a bit of a defensive stance we’ve actually reduced our asset sensitivity substantially from where we were last year. We do pay for that a little bit on our NIM there is no question about it. There will be a little bit of an increase as we do make that transition Glenn. I don’t think it will be significant it will be in the vicinity of about 10% so our sensitivity would increase about 5% to 10%. And we will be users of the health and maturity account as well so there’s less sensitivity to the capital ratios.

Got it, okay cool. And speaking the capital ratios, just looking for a drop more color on what specifically got consolidated from asset management to produce the drop in the ratios? And I am just curious on timing on why it happened this quarter I am just not familiar with it? ISI Group: Got it, okay cool. And speaking the capital ratios, just looking for a drop more color on what specifically got consolidated from asset management to produce the drop in the ratios? And I am just curious on timing on why it happened this quarter I am just not familiar with it?

Sure, we actually consolidated some of the CLOs that one of our asset managers managed, actually quite a few of the CLOs. So as we transition from Basel I to Basel III we actually reviewed the treatment of those consolidated assets. And we determined that even though we have no economic risk to them, we have no credit exposure at all that they should be included in our risk weighted assets. We actually expect this might be a temporary item FASB has just recently discussed the possibility of adapting a new standard that could be adopted as early next year and it would lead to us probably in consolidating some or even most of these assets as early as next year.

Okay, last one for me is just the 24% decline in business development cost. Is that -- is there a business to component to that impact or is that more of a sustainable decline because it actually -- it really moved the needle? ISI Group: Okay, last one for me is just the 24% decline in business development cost. Is that -- is there a business to component to that impact or is that more of a sustainable decline because it actually -- it really moved the needle?

Yes, there are two major components and there couple, but I’d say the two major components in there Glenn is our marketing expenses and our travel and entertainment expenses. We’ve been much more aggressive in managing our -- those discretionary expenses. For example, we have discouraged internal travel, we’ve encouraged, increased use of video and audio conferencing. And so rather than pull some of our operating committee together from time-to-time, we are doing it virtually much more frequently. And we are doing that across the board, we are not decreasing important revenue producing travel, this is internal related travel. Also last year, we had a substantial campaign on our marketing and branding efforts and we’ve reduced the spend associated with that. We are going to try to keep this discipline and sustain these levels. Now there is some seasonality to this with conference and so forth, so we would expect the third quarter is typically pretty good and the fourth quarter tends to be a little bit higher.

Okay, thank you for that. ISI Group: Okay, thank you for that.

Thanks, Glenn.

Thank you. The next question is from Ken Usdin with Jefferies.

Thanks. Good morning. Just one follow-up on the NII, outside of the puts and takes, can you also tell us whether or not you think you can actually maintain this current level of NII, your comments were more focused on the offset between extending versus drags from ECB. But what’s going on underneath that surface? Jefferies: Thanks. Good morning. Just one follow-up on the NII, outside of the puts and takes, can you also tell us whether or not you think you can actually maintain this current level of NII, your comments were more focused on the offset between extending versus drags from ECB. But what’s going on underneath that surface?

Yes, I think we will be able to as we model this out and obviously it’s going to be a bit sensitive to interest rates. But as we go through our modeling here, I think in the next few quarters, we will be able to maintain the level at this rate or in the ballpark of this rate, maybe slightly higher.

Okay. Two questions on investment servicing, just core asset servicing ex-security lending was up only slightly sequentially but it was up 4% year-over-year. I am just wondering if you can walk us through trends underlying the asset servicing. You did have a seed growth and I get that you had not as much of an equity sensitive custodian. But just only a $5 million kind of core increase in servicing can you give us some flavor for the growth or the traction of growth that’s underneath that? Jefferies: Okay. Two questions on investment servicing, just core asset servicing ex-security lending was up only slightly sequentially but it was up 4% year-over-year. I am just wondering if you can walk us through trends underlying the asset servicing. You did have a seed growth and I get that you had not as much of an equity sensitive custodian. But just only a $5 million kind of core increase in servicing can you give us some flavor for the growth or the traction of growth that’s underneath that?

Yes Ken, it is Gerald. Just a couple of comments there, one you’d recall we did lose a couple of clients over the course of the last 12 months. Those losses are now in the full run rate and that’s why you’ve seen a softness in some of the asset servicing revenues that’s now fully in a run rate and we think we feel good about the pipeline in a go forward. We’re attracting good clients and so it’s a little bit soft this quarter, but we expect it to pick up in the future.

Okay. And my last one just about issuer services and you point out the drags of both sides of the business but second quarter is typically a seasonally stronger one that leads to the bigger jump in the third. So can you also just walk us through corporate trust and ADRs and the drivers there? Jefferies: Okay. And my last one just about issuer services and you point out the drags of both sides of the business but second quarter is typically a seasonally stronger one that leads to the bigger jump in the third. So can you also just walk us through corporate trust and ADRs and the drivers there?

Sure so the issuer services on a year-over-year basis I think it was down more than $60 million. Part of what we saw in the second quarter was last year we saw a little more dividend action in the second quarter, and due to timing, we’re going to see some of that in the third quarter. So we would expect the third quarter to show the typical bounce that we get in seasonality around DRs and probably even a little bit higher than typical. So that was one of the reasons for softness there. And the reason is we also had fewer of these, kind of pass through, where some of our technology investments in corporate trust paid for clients and we see that in our revenue as well as in expense line. We had a little bit few -- a little bit less than that.

Okay, great thank you. Jefferies: Okay, great thank you.

Thank you.

Thank you. The next question is from Mike Mayo with CLSA.

Hi. Two as you say, reduced structural costs maybe you need to further reduce the structure and at the annual meeting I asked about the merits of having both assets serving along with asset management and Gerald you said that you have done the work and my thought is perhaps you need to show your work. Because the way we look at, the reported ROE has not been over the target of 10% since at least 2009. And so if this is a superior structure should there at least be an ROE in the double-digits? CLSA: Hi. Two as you say, reduced structural costs maybe you need to further reduce the structure and at the annual meeting I asked about the merits of having both assets serving along with asset management and Gerald you said that you have done the work and my thought is perhaps you need to show your work. Because the way we look at, the reported ROE has not been over the target of 10% since at least 2009. And so if this is a superior structure should there at least be an ROE in the double-digits?

Well, Mike we -- just as I said at the shareholder meeting, it’s a business we like a lot. We think there is a lot of good benefits with the two businesses together. Investment management is a great contributor to our earnings, it’s capital light it’s fee-based. We’re getting collaboration across the businesses we learn from each other, we are collaborating our new products, new services, new capabilities. When we have done math as I said at the annual meeting, we don’t take the math works, there is a lot of tax challenges, a lot of regulatory challenges associated with it. We are in fact improving the margins both in investment services and in investment management and that was evidence this quarter, in investment management you saw a 2% improvement year-over-year in the margins in the business, why we’re still investing in it? So we think we can improve the returns and the margins and drive a great business together. We like the diversity of the earnings, we like the fact that they mutually service the same client, I think it’s a great combination.

I have three follow-up questions, should I ask one and then re-queue or ask all three now? CLSA: I have three follow-up questions, should I ask one and then re-queue or ask all three now?

Ideally one now and then re-queue Mike.

Okay. Well, so what is the dollar amount of synergies and to repeat what I said before, again this is such a good combination, why is the ROE been below the cost of capital for the last five years? CLSA: Okay. Well, so what is the dollar amount of synergies and to repeat what I said before, again this is such a good combination, why is the ROE been below the cost of capital for the last five years?

So Curtis maybe you want to touch base a little bit on some of the synergies.

Yes. So Mike I think that when you think about investment management we’re serving the same clients. In so many cases that our clients run investment services business, you’ve asked for a very specific number. Truthful what is happening is these clients become clients with both parts of our organization, but with this continuous ability to connect to the investment services clients that's such powerful part of investment management. Let me give you a -- just in this quarter, a couple of examples. We had a foundation, a line of the investment servicing business that is expressing interest and expanding their portfolio in a direction of direct lending investment vehicles. The team that covers them for investment services are well aware of our capabilities in this space introduced us to that client and it became a win for us in terms of getting an investment management mandate. The other part of the investment services business that’s been a real winner for us from past several months has been offering our private banking services for the clients approaching. So the financial advisors that approach and serves, many of them don’t have access to their own private banking activity, so we’ve linked those two actually invested in having a team in our private bank, make lending available to them and have seen nearly $0.5 billion of loan volume over a pretty short time and actually on really what we call the pilot effort that we’re now actually planning to make it a much bigger part of the business. If you look at our cash business today, because we’re at a low interest environment, the overall economics of the cash business are not really what we think the contingent opportunity is in a more normalized rate environment, but just think of all the changes that occurred in the money market fund world with the question was asked earlier about the basic change in market structure. We think we’re well positioned to provide services around cash products into the higher rate environment that will be very valuable to the shareholders of BNY Mellon. So those are some examples of the places where there is real synergy.

Okay. I’ll re-queue. Thanks. CLSA: Okay. I’ll re-queue. Thanks.

Thanks Mike.

Thank you. The next question is from Brennan Hawken with UBS.

Good morning. So I guess I’m just, I’m a little bit confused about why you would want to be give up your asset sensitivity or lose some of the asset sensitivity here. I mean the NIM currently at like roughly 100 basis points is just far from heroic you have got Yellen in making comments that rates might be moving higher. So can you help us understand what drove that decision a little bit with a little bit greater clarity? UBS: Good morning. So I guess I’m just, I’m a little bit confused about why you would want to be give up your asset sensitivity or lose some of the asset sensitivity here. I mean the NIM currently at like roughly 100 basis points is just far from heroic you have got Yellen in making comments that rates might be moving higher. So can you help us understand what drove that decision a little bit with a little bit greater clarity?

So you’re talking about moving a little bit of the cash that we have in the form of placements into high quality liquid assets. Part of that is compliance with LCR, so we are sitting on a massive amount of cash, placements are not LCR compliant. So this is a fairly easy way for us to comply and we will generate a little bit of additional NIR. We don’t want to give up much of our interest rate sensitivity, so you’re not going to see a significant move there. We do think that there is growth in opportunity cost and the capital cost to join that Brennan. But you will see a modest adjustment.

Yes. And Brennan some of the other activities we’re working on, you’ve seen the loan book and our wealth management business grow, we like that sort of that asset. You’ve seen some of our secured financing for some of our collateral management clients’ increase. We are looking at other area within our asset capabilities to generate better returns on those assets and still keep the interest rate sensitivity available to us for our win rates to improve.

Okay. Thanks for that color. And then if we think about your asset management business and the sort of adjusted pre-tax margin there, if we look at what happened last year in that business, it contracted about 100 basis points versus 12 and I understand the majority of that was investment in distribution. But if we look at other asset management firms, they saw a rather significant expansion in margins last year. So I guess what's holding back the asset management business given how constructive the market is? Is there a structural impediment there, does it have something to do with how the agreements with the affiliates are structured. If you can maybe help us understand that a little bit that be great? UBS: Okay. Thanks for that color. And then if we think about your asset management business and the sort of adjusted pre-tax margin there, if we look at what happened last year in that business, it contracted about 100 basis points versus 12 and I understand the majority of that was investment in distribution. But if we look at other asset management firms, they saw a rather significant expansion in margins last year. So I guess what's holding back the asset management business given how constructive the market is? Is there a structural impediment there, does it have something to do with how the agreements with the affiliates are structured. If you can maybe help us understand that a little bit that be great?

Yes Brennan, it is Curtis. So first of all I would say that last year in addition to the investments that we made to grow our wealth management to expand our reach to financially expand our budgets through primarily in the U.S. to drive us and also to grow geographically. Those investments they sort of dampen margin, but I would also would call out the fact that we had a pretty some meaningful fee waiver environment, so we have a big part of our business is absolutely impacted by low or short rates. When you compare our overall enterprise to other peers that are sort of over the $1 trillion mark, we have a substantially smaller percentage of assets that are any equity asset class, and so the -- and I would also point out that our equity AUM is also pretty diversified, lot less as a percent is U.S. equities which have -- and especially did here last year. So we don’t -- well it was certainly a tailwind for us. It was not nearly the tailwind that it would have been for investment firms that are less diversified and more similarly exposed to equity AUM. I don’t think that the boutique structure certainly is one of our investment firms is very focused on their client base, their asset classes. They have a wider array of their own activities, both institutional and through retail distribution channels. But I actually think that they would benefit from the scale. We have firms that are 30, 40, 50 people highly focused on a very specific asset class, and we give them geographic reach in terms of clients and have a firm on the East Coast of United States that’s raising money all over Asia and throughout the Sovereign Wealth Fund World without having to actually build their own infrastructure to do that. So I think it is a -- we’re pretty excited about what we do. We are investing in it and you’re absolutely focused on improving margins. That’s why we are investing with where we are. If you look at the peers who have higher margins than us, they generally have substantially larger percentage of their assets in the retail space, and they have a larger share currently, they are benefiting from the equity tailwind. Of course that creates more profit volatility and margin volatility, if you look at it through time. But we are investing to improve our margins and are pretty excited about our opportunities there.

Yes just one final bit of color, I think you are seeing evidence of it in the 200 basis points improvement in margin year-over-year. This year and early next year are sort of the high watermarks in terms of the level of investment and we showed you in April. We expect an improvement in margin as those investments start to pay off. And also I might add, the investments we are making are not high risk investments. It is investing in wholesalers and distribution. It’s investing in wealth managers. We are bringing in clients. That’s starting to show up in numbers now. These are investments we have very-very conference on the returns.

Okay, thanks for the color. UBS: Okay, thanks for the color.

Thank you.

Thank you. The next question is from Brian Bedell with Deutsche Bank.

Hi. Great, thanks. Good morning. Deutsche Bank: Hi. Great, thanks. Good morning.

Good morning, Brian.

Yes good morning. On the, just back to the corporate trust, on the expense side of this can you just talk a little bit about to what degree some of the consolidation of this platforms were involved in the prior cost reduction program, and whether the dynamic changed upon your decision. And then, so should we be thinking about any other further backdrop of consolidations as the potential expenses on the corporate trust now that you are keeping in? Deutsche Bank: Yes good morning. On the, just back to the corporate trust, on the expense side of this can you just talk a little bit about to what degree some of the consolidation of this platforms were involved in the prior cost reduction program, and whether the dynamic changed upon your decision. And then, so should we be thinking about any other further backdrop of consolidations as the potential expenses on the corporate trust now that you are keeping in?

Yes, the primary operating platform for corporate trust is the trust accounting system. It’s really dedicated to corporate trust. They are the last user above it, and actually we were in a migration mode to our end-stage platform called GSP, for those of you who are interested in acronyms. We’re in the process of doing the conversion and we are going to continue the process and it should be completed next year. And so there is no change in that going forward. And we will realize better operating metrics as a result of it.

Okay. So that’s yes, it’s interchanged through sort of expense -- based on you keeping that. Deutsche Bank: Okay. So that’s yes, it’s interchanged through sort of expense -- based on you keeping that.

Brian, you’re breaking up, if you could…

I’m sorry, so there is no change in the expense fee based on you are keeping that, it’s the takeaway there? Deutsche Bank: I’m sorry, so there is no change in the expense fee based on you are keeping that, it’s the takeaway there?

No, not at all.

And then on the revenue side, maybe question for Curtis and Brian -- and congrats on your extended role by the way. On the clearing business, you know the revenue, hope that well given charges definitely declined in the quarter. So I was just wondering if that was due to the component that’s related to licensing and asset management or are you gaining new clients and is the run rate better there? And then similarly for Curtis, you know the organic growth has been very strong in asset management recently, this quarter little bit weaker, maybe if you could just address the LDI outflow and your view of the organic growth coming in the next one to two quarter overall? Deutsche Bank: And then on the revenue side, maybe question for Curtis and Brian -- and congrats on your extended role by the way. On the clearing business, you know the revenue, hope that well given charges definitely declined in the quarter. So I was just wondering if that was due to the component that’s related to licensing and asset management or are you gaining new clients and is the run rate better there? And then similarly for Curtis, you know the organic growth has been very strong in asset management recently, this quarter little bit weaker, maybe if you could just address the LDI outflow and your view of the organic growth coming in the next one to two quarter overall?

Brian, it is Brian Shea. I will start with the clearing question and then I will turn it over to Curtis. The clearing business has been pretty strong with core fee growth driven by significant growth in mutual fund assets and asset-based fees offset by higher cash earnings receivers and lower DARTS as you recognized. I think the underlying metrics behind the clearing business are all really pretty strong. In this quarter we have a record level of client assets in custody. We have a record number of total individual investments on our platforms globally. We have a record levels of mutual fund assets on our platform overall. And growing margin balances as you can see in the metrics year-over-year, and you know the slight -- lots of low rates and discussions about money market industry, pretty solid cash management balances. And I would not actually to reinforce Curtis’ point that the market share urging clients choosing, because they decide which cash management alternatives they use. But the clients have chosen Dreyfus more than ever before, and so we have a record level of market share of Dreyfus cash management on the purging platform. Again, when an interest rate environment changes that will be a much more valuable linkage in synergies between the investment management and investment services business. So that’s my perspective on clearing I am going to turn it over to Curtis.

Yes and on the organic side, first of all we will tell you that we had a long-term out flows this quarter of 13 billion. It’s a pretty unique situation actually and that one of our large LDI clients actually decided to take their LDI activities in-house. So it was not any way related to our investment performance or service, we always hate losing any business, but completing our standard decisions that they may -- to do that. I will tell you that our pipelines around LDI specifically continue to be robust, pension de-risking is still very much alive and well and I would actually say it’s expanding geographically. So our largest business is Insight, which has a large book of UK, LDI business and I can tell you that the global interest in LDI is definitely not shrinking. One of the nice things about just -- since we are talking about the Insight, I will tell you the Insight, the tools that you’ve to be able to perfectly model the liabilities, especially UK liabilities are having inflation sensitivity component. You have to be very good at understanding market dynamics and what drives risk and return and in the quarter, Insight specifically actually had a very significant amount of inflow into alternative strategies absolute return strategies where they are taking a lot of their capabilities and creating absolute return products, if their clients, who have been very satisfied with them in the LDI space are allocating to them and also getting broader interest. We like the short term side like the rest of the industry did experience outflows our outflows we think are roughly in inline with that the industry saw in the second quarter both some of it being tax payment, some of this being that clients were certainly in the beginning of the quarter reallocating short-term cash into some of the higher yielding on assets and actually that’s the story in fixed income as well. Our product outflow there is related to mostly short duration fixed income where clients are reallocating. In equities the dynamic there has really been three things. The equity rebalancing so the increase in equity markets has caused clients to move money. But we’ve also seen clients move assets around into past strategies. So in this quarter, you actually will see our increase of 7 billion was almost entirely equity index. So it’s nice thing you have a diverse range of products to be able to -- it’s leaving one place, it’s going another money in motion is big part of our advantage here.

Great, great thanks very much for the thorough answer. Deutsche Bank: Great, great thanks very much for the thorough answer.

Wendy, I think we have one more question.

Thank you. The next question is from Cynthia Mayer with Bank of America Merrill Lynch.

Hi, thanks a lot. So just getting back to the expense management, you and others have been mentioning for a while that the pressure of compliance cost and I am just wondering looking ahead, do you see those leveling off? Is that a pressure that you feel is abating, so that to the extent you do streamlining, more of it will fall to the bottom line and same question and I guess the combining of your platforms, is there upfront IT for that? Bank of America Merrill Lynch: Hi, thanks a lot. So just getting back to the expense management, you and others have been mentioning for a while that the pressure of compliance cost and I am just wondering looking ahead, do you see those leveling off? Is that a pressure that you feel is abating, so that to the extent you do streamlining, more of it will fall to the bottom line and same question and I guess the combining of your platforms, is there upfront IT for that?

Great question, Cynthia, so first on the regulatory side, the rate of increase is slowing down, it is creating greater clarity around the rules and the regulations and what we need to do to be in compliance with them. But importantly, we cannot sacrifice having a well-controlled, well risk-managed firm we are absolutely committed to that and we’re not going to sacrifice having a great firm in those categories. But we do in fact see the rate of growth moderating and our expense management is taking into consideration, continuing to fund those activities and so that’s why we are very diligent around all the other things that we can control so that we can fund new investments, we can fund having a well controlled environment and continue to grow our businesses and serve our clients well. So it’s all factored into the expense control programs that we put in place. And the platform consolidations again the technology investments that we’re making are factored in the expense base and we’re realizing the synergies out of the platform consolidations and it’s in the run rate.

Okay. Thanks a lot. Bank of America Merrill Lynch: Okay. Thanks a lot.

Thanks.

Thank you. Everyone thank you very much for dialing in today. I know you had a lot of interest in our results and so follow up questions to Izzy Dawood or Andy Clark they are available to answer your questions and thank you for your interest in us. Have a great.

Thank you. If there are any additional questions or comments, you may contact Mr. Izzy Dawood at 212-635-1850. Thank you, ladies and gentlemen, this concludes today’s conference call. Thank you for participating.