Good morning, ladies and gentlemen, and welcome to the Second Quarter 2016 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 webcast will be recorded and will consist of copyrighted material. You may not record or rebroadcast these materials without BNY Mellon's consent. I will now turn the call over to Ms. Valerie Haertel. Ms. Haertel, you may begin.

Thank you. Good morning, and welcome, everyone, to the BNY Mellon Second Quarter Earnings Conference Call. With us today are Gerald Hassell, our Chairman and CEO; Todd Gibbons, our CFO; as well as members of our executive leadership team. Our second quarter earnings materials include a financial highlights presentation that will be referred to in the discussion of our results, and can be found on the Investor Relations section of our website. Before Gerald and Todd begin, let me take a moment to remind you that our remarks today may include forward-looking statements Actual results may differ materially from those indicated or implied by our forward-looking statements as a result of various factors. These factors include those identified in the cautionary statement in the earnings press release, the financial highlights presentation and those identified in our documents filed with the SEC that are available on our website, bnymellon.com. Forward-looking statements made on this call speak only as of today, July 21, 2016, and we will not update forward-looking statements. Now, I would like to turn the call over to Gerald Hassell. Gerald? Gerald L. Hassell - Chairman & Chief Executive Officer: Thanks, Valerie, and welcome, everyone, and thank you for joining us to discuss our second quarter results. This quarter demonstrated the value of having a well-diversified, lower-risk business model which provides stability to our revenue base during periods of global market uncertainty and volatility. We remain focused on the execution of our long-term strategy to drive future growth by continuing to invest in strategic initiatives to support our client's success while maintaining the safety and soundness of our enterprise. We continue to aggressively control expenses through our business improvement process, which enabled us to maintain a strong adjusted pre-tax operating margin of 33%. In a challenging revenue environment with…

Certainly. Thank you. As a reminder, we ask that you please limit yourself to one question and one related follow-up question. [Operation Instructions] Our first question will come from Ashley Serrao from Credit Suisse. Ashley Neil Serrao - Credit Suisse Securities (USA) LLC (Broker): Good morning. Gerald L. Hassell - Chairman & Chief Executive Officer: Good morning. Ashley Neil Serrao - Credit Suisse Securities (USA) LLC (Broker): Gerald, I was hoping you could elaborate on the potential for robotics across the organization as you look out a few years. And then also, perhaps, touch on the cost of data. I know you noted a reduction in market data terminals, but hoping you could give us a sense of how much the firm spends today and how the firm is thinking about procuring data, especially as you strive to deliver more analytical solutions to clients. Gerald L. Hassell - Chairman & Chief Executive Officer: So, Ashley, I think your first question was about Brexit. Is that correct? Ashley Neil Serrao - Credit Suisse Securities (USA) LLC (Broker): Oh, no. Sorry. The potential for robotics across the organization. Gerald L. Hassell - Chairman & Chief Executive Officer: Robotics. Ashley Neil Serrao - Credit Suisse Securities (USA) LLC (Broker): Yeah. Gerald L. Hassell - Chairman & Chief Executive Officer: Sorry. Sorry. Yeah, robotics. So right now, we have three bots – 30, I'm sorry – 30 bots in production right now across six different processes. We're very encouraged by the results. It's really taking some of the manual mind-numbing exercises out of the process and doing it at a lower cost. So we started with a couple of bots in one process and we since expanded it. So we're actually pretty encouraged by the upside associated with this. We think we're in the…

And our next question will come from Alex Blostein of Goldman Sachs. Alexander Blostein - Goldman Sachs & Co.: Hey. Thanks, guys. Good morning. A question around resolution and the expense outlook that you guys just highlighted. Todd, can you provide a little more color, I guess, how much more an elevated reg spend getting compliant will cost you guys as you go through this process and maybe the timing of that? I mean, it sounds like a lot of that is going to be kind of second half of this year and then it should probably phase down into 2017. And I guess more importantly, it seems like you're keeping your overall expense guidance in line with what you said in the past kind of flat to slightly down. So what are the areas where you're finding incremental savings to offset the more elevated regulated spend? Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: Sure, Alex. So the guidance we did give, so I'd say it's a little bit improved from what we had previously given, and that is on a year-over-year basis. We do expect to be flat, perhaps down a bit on total expenses. And that includes a number of headwinds. We have the higher distribution fees related to fee waivers. It's kind of a good expense. So as the fee waivers abate, we incur that expense. The government assessments are going up substantially. So, the Single Resolution Fund in Europe, the bank levies and increased FDIC expense is up substantially. And then, we've mentioned the higher regulatory cost associated with compliance with the resolution plans as well as the demands around CCAR. So those are all incorporated into the run rate that I just mentioned. All other expenses should more than offset what I…

And now we'll take our next question from Brennan Hawken of UBS.

Good morning. Thanks for taking the question. The NII guide in the back half, does that – I know that you had indicated your expense outlook would be reflective of potential headwinds from living will. But does the NII guide also include the potential headwinds that you flag onto a HQLA? Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: So what we guided in the third quarter, assuming that the Fed doesn't take any action in the third quarter, that we would expect NIR to be flat with the number that we just posted. There could be some additional debt issuance that we would incur in the quarter, as well as I had mentioned that we are going to reduce the balance sheet with some of the unfriendly – what we call LCR-unfriendly – the liquidity coverage ratio-unfriendly deposits as well as some of the lower-yielding repo that we have on the books. That combination should substantially improve the SLR ratio and I think put us in a good position for next year's compliance. And there's a possibility there could be additional TLAC post that.

Okay. But it's too early to determine, I guess, exactly how that would shake out. Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: It really is, Brennan, because we have not – we've simply not been able to complete the financial analysis at this time. And I probably should give you a little more color. Effectively, if we need to issue TLAC to preposition so that we could support, say, the institutional bank in the time of crisis, what we would do is we would issue debt and we'd probably invest it in a similar duration, high-quality liquid asset. Let's just say it was treasuries. That costs us about 100 basis points. So we end up doing $5 billion of that. It's going to cost us about $50 million over the course of the year.

Okay. That's great. Thanks for clarifying there. And then, is it possible – could you give us in constant dollar operating leverage both quarter-over-quarter and year-over-year? Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: It's possible, but I don't have it at my fingertips. It's almost not impactful. There was more noise within the currencies, so you saw a move between sterling and euro but the net impact was relatively modest, less than 100 basis points to revenue or expenses for the entire company. So net-net in operating leverage, that doesn't do much.

So you... Gerald L. Hassell - Chairman & Chief Executive Officer: The reported...

Sorry. Gerald L. Hassell - Chairman & Chief Executive Officer: The reported operating leverage numbers will essentially be – they're pretty currency-adjusted ones. Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: Yeah.

Okay. Okay, great. So, effectively, even though you highlighted and included the currency translation in the noise impacting your fee revenue, when we think about it on a net bottom line impact, that really didn't have an operating leverage impact this quarter. Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: Well, think about it. It's 1%. It's approximately 1% of both. So, net-net, that's not going to do too much to operating leverage.

Yes. Yes, got it. Thank you.

And now we'll move next to Brian Bedell of Deutsche Bank.

Hi. Good mornings, folks. Gerald L. Hassell - Chairman & Chief Executive Officer: Good morning, Brian.

Just to do a quickie on expenses. The lease exit costs I think, Todd, you referenced the increase sequentially to that. So, should we imply about of $10 million of lease exit costs that are sort of onetime in nature? And then also on your expense guidance on flat to possibly down for this year, do you have distribution expenses related to money market fee waivers going up, I guess, in terms of like factoring when you have the Fed raising rates? Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: Yeah. Brian, in terms of the – it's a little less than $10 million, but somewhere approximating that...

Okay. Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: ...and on the lease exit costs. And from time to time, you're going to continue to see us do this as we manage our real estate portfolio. So, it just makes sense for us to get back some space to consolidate and just improve our workspace in general. And in terms of the fee waivers, we do reflect what our projection is throughout the rest of the year and that's incorporated – excuse me, our distribution fees. That's incorporated into that number. The assumption that we made in the number is that there's no additional Fed tightening.

Okay. Okay, that's clear. And then maybe just switching gears on maybe either Gerald or I don't know if Brian's on the call as well, if you could just give us an update on the T. Rowe mid-office contract onboarding. I think there were some more revenues coming in later this year on that. And then just in also the $167 billion of new wins, the timing of that and the client mix there. Gerald L. Hassell - Chairman & Chief Executive Officer: Yeah, I'll let Brian handle that. Brian is on the call here. Brian Thomas Shea - Vice Chairman & CEO-Investment Services: Okay. Thanks, Gerald. So, Brian, taking the new wins first. New wins tend to be bumpy in asset servicing, so you see volatility in that number. But we had a pretty good quarter, with $167 billion in AUC new wins. About $100 billion of that was from one large insurance company client that we're excited about bringing on board. And we still see longer term secular trends in the asset management space, where asset managers really do want to focus on their core value proposition in the investment process and they're looking for lower, more variabilized capital-light solutions. So we see real opportunities in the middle office space for asset managers for hedge funds. And we obviously are now signing up our first third-party clients following the lift-out of the Deutsche Bank real estate and private equity admin business last year. We have actually signed six clients year-to-date, new clients, so that's going to start to be a source of revenue. And so overall, we feel good about the long-term prospects for asset servicing growth. And what was the first part?

The T. Rowe. Brian Thomas Shea - Vice Chairman & CEO-Investment Services: So on T. Rowe Price, we're moving along well with T. Rowe Price. Last August we actually lifted out their middle office team and we're operating their middle office and fund accounting services every day. And the service levels and the relationship are strong and we continue to work through the implementation plan to convert them to our fund accounting technology platform and our middle office services platform. So we're still moving along nicely. There always are some technical things that have to be resolved along the way, but we are moving along well with T. Rowe Price.

And is there a revenue lift as you implement that through this year? Brian Thomas Shea - Vice Chairman & CEO-Investment Services: I would say there's been some – we obviously are getting revenue from the middle office services since the middle of last year. I think you should think about that more like in 2017. Not any real growth in the revenue this year.

Okay. Okay, great. That's helpful. Thank you. Gerald L. Hassell - Chairman & Chief Executive Officer: Thank you.

And now we'll go to Ken Usdin of Jefferies. And, Ken, your line is open. If you could please check your mute function.

Thank you. Good morning, everyone. Thanks. Todd, I was wondering if you could elaborate more on the activity side of the business. The core FX was down a little bit; less seasonality in sec lending, which we know is a little bit more on the changing dynamics in Europe. And then clearing, you mentioned lower volumes. Can you just talk about kind of how the quarter progressed in terms of the activity side? And did Brexit have an impact at the end? And then how do you see the markets behaving now? Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: Sure. So in terms of Brexit, a little bit frustrating. It was probably a negative for us for the quarter. So what we saw was a little bit of an increase and a little flurry in FX activity at the end of the quarter, but that was effectively given back by the hedge that we have on investment management because of the very low interest rates. And then the fact that the amortization of the premium against the NIR was driven by the very low interest rates, I'd basically say it cost us about $0.01 as we look back to it. So far this quarter, I think the activity has been a little elevated in FX, so a pretty good start. Whether that's going to sustain itself or not, we'll have to see. In terms of activity across the investment service, Brian, you're probably better suited to answer that. Clearing activity I guess was a little bit softer for most of the quarter. But generally activity is not bad. Brian Thomas Shea - Vice Chairman & CEO-Investment Services: Yeah, I would say that. Clearing services, as we've said, has been affected by some lost clients and some client…

Okay. Gerald L. Hassell - Chairman & Chief Executive Officer: Ken...

Yeah. Gerald L. Hassell - Chairman & Chief Executive Officer: Ken, I just would like to add, when you look across the markets, whether it's emerging markets' interest rates, whatever the case may be, our core underlying businesses I think are performing reasonably well. Issuance in the Corporate Trust area in DRs has actually been down, but we've had a higher-than-market share gain in those spaces. And so while it's flat, when you look at the overall market activity, us being flat is actually a positive. When you look at asset servicing and you think of some of the things that we've won here, I think the core underlying business has got some pretty decent solid momentum. In clearing services, even though we've lost business on a year-over-year basis, to fully recover that and show a little bit of increase, again, I think the core underlying business is performing well.

Fair point, Gerald. Just a follow-up on capital and the preferreds. So you got the preferred kind of aligned with the CCAR, as you said, and also I think presumably as part of your further SLR build. So can you talk about just the expected timing of when you might get the market for preferreds? And bigger picture is, should we expect that the preferred as connected with CCAR is an annual thing and now it's part of rightsizing the capital structure? Or once you get this last one and get SLR compliant, are you done? Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: Ken, I think that when we look at our capital stack in the nature of our risk, we probably could do some additional preferred relative to common equity, especially when you think that it's the Tier 1 that drives the SLR ratio, which is our binding – what I'll call spot capital constraint. I can't really speak to the timing of any issuance. But if you look at what was disclosed in the CCAR, we did get approval to do $750 million and buyback a substantial part of that, but not all of it. So that will generate some additional Tier 1. And with interest rates down as low as they are, it's a pretty attractive form of capital.

Thanks, guys.

And our next question will come from Glenn Schorr of Evercore ISI.

Hello there. Todd... Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: Hi, Glenn.

Hello. Could I get a clarification on just two things you mentioned earlier? One was curious on what external loss events got incorporated in this quarter for the ops risk RWA that would have the capital ratios fall sequentially. And the other one was within FX trading. You talked about clients migrating to lower margin products. I'm just looking for an example of what that is and if you see that as a sustainable trend. Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: Okay. I'll answer the question on the operating losses. Effectively, what happens is when large losses, and a lot of these are settlement types of losses, go into an external database, it helps to inform our – if you think about this, we distribute a potential – there's a potential distribution of losses. There's a probability of them occurring. That distribution is informed by those large losses, so I can't identify specifically which one it was, but they keep coming, if you will. And they don't fall out of that database for 10 years or so. So that's what's affecting it. So it keeps picking up on some of these litigations. There is some consideration to taking a look at how operational risk is computed and it's likely that this will change in the not-too-distant future. There are some big discussions within the regulatory bodies right now. We do expect that there will probably be some relief coming within the next couple of quarters on how that's computed, but I can't really confirm that at this time. So, that's what drives it and you'll see it in – I don't think it's exclusive to us, where you've seen some of that noise around operational risk losses and the addition to risk-weighted assets. Now, it's kind of interesting, Glenn, because if you look at the CCAR test, the CCAR test is not against the advanced approach. The advanced approach is the one that includes the model for operating losses. It's using the standardized approach. And so, if you look at our ratios on a standardized approach, they didn't go down into the quarter.

Right. Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: And in fact, they have now a substantial – they're substantially higher than the advanced approach. So the good news is, this is not really a constraining issue for us because when we go through the CCAR, we're testing against a much higher ratio.

Makes sense. I appreciate that. Gerald L. Hassell - Chairman & Chief Executive Officer: And then, Glenn, the answer on the foreign exchange, as we've commented in the earnings release, we continue to see – and it's been a relatively long-term trend – a shift in client activity from either the old standing instruction type of activity to negotiated rates and electronic platforms as the market continues to become more competitive on a price point of view, and that's been absorbed in our foreign exchange results. And we, of course, have built out additional options for our clients and they're utilizing those options, but we did want to call out the fact that there's been a shift in the activity.

Got it. Last quickie, LDI is now 34% of AUM. Maybe the best acquisition is never in asset management. But curious how that progresses when we live in this world of low rates and a flatter curve, like I thought growth was getting tapped out and waiting on higher rates, but I guess that's wrong.

Yeah, no. This is Mitchell. It's the pipeline, the conversations we're having with our clients and prospects. We're still showing a very robust and very healthy pipeline, quite frankly, in the UK. We're looking to obviously extend that success into the U.S. That will be slow. But, no, the client behavior has not changed at all and the interest is still as high as it's ever been. Gerald L. Hassell - Chairman & Chief Executive Officer: But, Glenn, if you think about it with a lower-for-longer interest rate environment and pension liability is not declining, these firms need to come up with a better solution to match the liabilities against the returns on the assets. That's exactly what our firm does, what Insight does. It really knows and tries to understand the liability structures and develop investment returns to better match it. Pension funds all over the world are struggling with this.

Yeah, I appreciate it. Thank you all.

And our next question will come from Mike Mayo of CLSA.

Hi. On expenses, you're making progress year-over-year linked quarter, but head count is still up and if you can reconcile that. And then, separately, you're guiding now for better expense guidance flat to down, is that simply reflecting the progress you've made in the first half of the year? Because it looks like that's where you're headed, anyway. Gerald L. Hassell - Chairman & Chief Executive Officer: So, Mike, on head count, yes, we've added some head counts in the technology sectors. We finished insourcing the contractors and have application developed largely in-house now. We've added some folks in the asset servicing and operations areas to support the new business we've taken on and some of the strategic initiatives that we've taken on with clients. But I think I'd really point you to the fact that the staff expense has been down. So we're putting people in the right locations at the right levels to offset the increase in the head counts. So we're really trying to manage staff not just purely from a head count point of view, but from an overall cost perspective. And I think that's the more important way to look at it. And yes, we have additional people doing certain things to match the activity on the client and the initiative side. So... Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: And the regulatory side. Gerald L. Hassell - Chairman & Chief Executive Officer: And the regulatory side. We've insourced and are building a more sustainable capability to deal with the regulatory items that we're being asked to deal with. So instead of using consultants and a lot of third parties, we are building sustainable teams to be able to handle whether it's CCAR, CLAR, resolution plans, whatever the case may be, and we think we're doing it in a more cost-effective way. Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: And so, Mike, when we have temporary staff, they don't show up in the head count numbers, but they do show up in the salary numbers. So one of the big things we've been doing is replacing them by more cost-efficient permanent staff, as well as the insourcing of some of the developers that has continued. So the head count is not necessarily a good reflection, that's why we keep saying let's take a look at staff expense. But we've also got the initiatives that we've had to accommodate with T. Rowe and some of the other ones that we've discussed this morning, as well as significant increases in regulatory and compliance-related staff. Gerald L. Hassell - Chairman & Chief Executive Officer: And the final part of your question, we do see an ability to garner additional gains out of our business improvement process to offset these cost increases, to be able to sustain a flat to decline in expenses through the course of the year.

And then just one follow-up. Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: Just to be clear.

Yeah. For the business improvement process, can you just summarize like where are you in that process? Are you one-fourth done, one-half done, three-fourths done, I mean, because you're relying on this to navigate a tough environment? How much more do you have? Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: My colleague, Brian Shea, is biting at the bit on this one. He wants to speak as we'll never be done. Gerald L. Hassell - Chairman & Chief Executive Officer: We're never done, Brian. Brian Thomas Shea - Vice Chairman & CEO-Investment Services: Todd and Gerald said it well. I echo that. It's a continuous – we're calling it a business improvement process on purpose. It's not a project or a program; it's a process. We're going to drive continuous improvement in our operating efficiency, our productivity, our service quality, in every aspect of the way we operate. And so we have a pipeline, Mike, of other initiatives and other process improvements that we're going to drive across the company. So more to do on location strategy, more to do on technology, more opportunity to reduce vendor costs, more opportunity to shift traditional servers to the cloud. And so, we really think we have a sustainable, continuous process improvement approach and it's really a cultural change in the way we're operating and I think it's really gaining more traction every day.

I can't help it, what is the BYOD policy? Brian Thomas Shea - Vice Chairman & CEO-Investment Services: Bring your own device. Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: Yeah. Brian Thomas Shea - Vice Chairman & CEO-Investment Services: In other words, all employees buy their own device, it's their choice. We will reimburse them for company-driven activity. But essentially, everyone chooses their own device and their own carrier, then we put our applications that are company applications up on it in a secured manner for them to use.

All right. Thank you.

And next we'll go to Geoffrey Elliott of Autonomous Research.

Oh, hello. Good morning. Thank you for taking the question. On the initiatives around reducing some of those LCR-unfriendly deposits, I wondered if you could quantify the scale of deposits that you're looking to reduce. Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: So there are two elements. One is we think we can encourage some of our clients rather than to leave the money on our balance sheet to sweep it into money market funds so that we can continue to earn some margin, maybe a little bit less than what we would have earned on balance sheet, but the capital benefits far outweigh that. And then, there are some of the, what I'll call, the hotter money that doesn't get positive LCR treatment, which we're going to – we still have some on our balance sheet which we are going to discourage off of the balance sheet. And then, we have some repo activity where occasionally, we will basically run what looks like a matched book. The scale of that, every $10 billion is about 15 basis points to the SLR. So it wouldn't – we could do $20 billion or $30 billion relatively easily and fall within the guidance that I gave you on NIRs is our current estimate. We also generate from intangible amortization and employee compensation issuance of the common stock about 5 basis points a quarter or so. So that's kind of the scale that we're talking about.

And then just a quick follow-up. Money market fee waivers, how much of a potential upside is still left from those going away? Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: Yeah, we have recovered. It's a little bit different in our various businesses, but in aggregate for the company, we've probably recovered a little bit over 50% of the fee waivers with the first 25-basis-point move. There wasn't much of a change. We got it in the first quarter and we got it in the second quarter, so it's really not much of a change quarter-to-quarter. And we had indicated that a 50-basis-point move would give us about 70% and we – I'd still stick with that estimate for now.

Great. Thank you very much.

And now we'll go to Betsy Graseck of Morgan Stanley. Elizabeth Lynn Graseck - Morgan Stanley & Co. LLC: Hi. Good morning. Gerald L. Hassell - Chairman & Chief Executive Officer: Good morning, Betsy. Elizabeth Lynn Graseck - Morgan Stanley & Co. LLC: I had a question on money market funds and the transition that's going on in the industry. We've got the prime, non-prime transition happening in October. Could you talk a little bit about what you've done so far? I know you've moved some of your funds to govies, but could you talk about what you've done so far? What's left to do, if any, and if there's any impact that we should be expecting on either gross margins or any other relevant metrics as we go into the third, fourth and first quarter?

It's Mitchell, Betsy. I think that from a transition point of view, we're prepared for the move and we've made all the regulatory changes already. So I don't see any expense or any related issues there. From a yield perspective, we're all trying to continue to increase yields, but what you see happening is a couple of things in the market. First off, prime funds have already started industry-wide to decrease. There's been about a 28% shift in asset moves from prime to treasury. In addition to that, the overall market is down about 4% where we've been down about 1%. So we're doing a bit better on that front. And that prime has also decreased a little less than the industry and that only 24% of our assets have moved. We still expect about a third to a half of prime assets to move out into treasury funds over the next quarter. Exactly how much, we're not sure. But we've got the products and we are continuing to look carefully at yields in order to make sure that the shift goes into our treasuries. Alternative products such as insured deposit accounts are also possible where people will move funds, too. It's still a little bit wait-and-see and quite frankly, it's going to be this third quarter where we're really going to see how the movements play out, but I think we're very well-positioned for it. Elizabeth Lynn Graseck - Morgan Stanley & Co. LLC: And you're basically taking liquidity into liquidity. You're not seeing a trend of investors moving from liquidity product into maybe a bit of a barbell strategy to try to maintain yields.

No. Gerald L. Hassell - Chairman & Chief Executive Officer: No.

No, not at all. Elizabeth Lynn Graseck - Morgan Stanley & Co. LLC: Okay. Gerald L. Hassell - Chairman & Chief Executive Officer: And I think the volatility uncertainty in the market, there's a lot more cash being held in general.

There's a lot more cash being held and their funds are holding a lot more cash in anticipation of a shift between funds. Elizabeth Lynn Graseck - Morgan Stanley & Co. LLC: Right. And I guess what I'm surprised that is that only a third move. So you're saying two-thirds of the funds are willing to accept the higher risk associated with the prime fund structure. Gerald L. Hassell - Chairman & Chief Executive Officer: I think they're waiting till the last minute. Elizabeth Lynn Graseck - Morgan Stanley & Co. LLC: Okay.

Yeah. Brian Thomas Shea - Vice Chairman & CEO-Investment Services: And, Betsy, it's Brian. From a servicing perspective, we've invested in the changes we need to make to our systems to support a floating NAV institutional prime money funds and we are on track to be ready to serve our clients in October seamlessly. Elizabeth Lynn Graseck - Morgan Stanley & Co. LLC: Okay. Because that's a flip of the switch day out, right? Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: Yeah. Brian Thomas Shea - Vice Chairman & CEO-Investment Services: Yeah. Elizabeth Lynn Graseck - Morgan Stanley & Co. LLC: Okay. Thank you. Brian Thomas Shea - Vice Chairman & CEO-Investment Services: Thanks, Betsy.

And next we will go to Jim Mitchell of Buckingham Research.

Hey. Good morning. Maybe just a quick follow-up, but if you could help us think through more specifics around Brexit, if there's shifting you need to do in terms of client assets or people. And if we should think is there any material impact on you guys in terms of your UK presence from the declining pound? Any specifics that you can share with us? Gerald L. Hassell - Chairman & Chief Executive Officer: Sure. Great question. Thank you for it. We are extremely well positioned. We already have in place and have had in place for a long period of time a Belgian Brussels bank. It is well established. It's an operating center. It has capital liquidity, governance, management, everything that a European bank is required to have. And it's already passportable across all of Europe. In addition, we have a UK bank and we have a branch of our institutional bank in the UK. We also have a bank in Luxembourg that's also fully registered and then we have operations in Ireland as well. So we think we have lots of choice for our clients as they go through this. And, particularly, the fund managers, when they have to think about the jurisdiction of their funds, if they have to move them from the UK to a European-passported location, we are very well positioned to help them get there. So we think we're in good shape operationally to help our clients deal with whatever impact Brexit offers.

So no real incremental expense for you guys. Do you see any impact on your clients that could be adverse, or is it just really just shifting AUM around and no real net outflow? Gerald L. Hassell - Chairman & Chief Executive Officer: One, I think it's early to tell. I think our clients are all going to go through is does it make sense to make the shift. They're going to go through the process of is there marginal activity that warrants continuing to make the investment and/or shift versus shutting it down. I think we're very early in the process, but we have the expertise and the legal entities and the structures to be able to help our clients navigate those decisions. Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: Right.

And any impact from the pound on you guys that's material? Gerald L. Hassell - Chairman & Chief Executive Officer: Not really. Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: We have some pound/euro cross-exposure, but I don't think it's substantial. And when we looked at our performance for the second quarter, there was a fair amount of noise in the currencies. But when it all came netted down, it was within $1 million of impact.

Okay. Great. Thanks a lot. Gerald L. Hassell - Chairman & Chief Executive Officer: Thank you.

And our next question will come from Adam Beatty of Bank of America Merrill Lynch.

Thank you and good morning. First for Mitchell on the distribution strategy in investment services. Obviously, it's a pretty broad topic with your different geographies and market segments. But just was wondering, maybe get some highlights on the strategic thinking behind that. Where you would expect the greatest leverage in the relatively near term and how the boutiques will play a role? Thanks.

Thanks for that. There's several things. You have really institutional retail and wealth, so you have several different distribution points. And then you have with the institutional, we've traditionally been focused on the U.S. and I think we've broadened it because we've had opportunities out in Asia. So we're strengthening Asia where there are more immediate opportunities. And clearly pockets are growing, both specifically on the sovereign wealth, but on the institutional side. Japan has some terrific opportunities there and we've certainly been focused on those. On the retail side, when you think about the DOL and the changes taking place there, I think all we're doing is rebalancing both how we interact with the intermediary side, given the changes. The RIAs and the private banks, we haven't had enough focus, particularly on the RIA segment, which is the fastest-growing segment from a distribution perspective. And then on the wealth side, we've continued with the build-out of Atherton to focus really on where pockets of wealth in the southern part of the United States and out West have been growing. We've been more focused on the traditional, I'll call it the industrial, belt of Detroit, Chicago and those kind of – and the East Pittsburgh, New York. So it's where the pockets of wealth are. It's segmentation of what segments of wealth are growing, and that are the women, the Hispanics in particular. So we're looking both geographically and on a segmentation basis. And with respect to the boutiques, the boutiques are focused primarily on the institutional markets and the center is focused primarily on the retail markets. So I think we've clarified or cleaned up where each of our responsibilities lie.

Great. So the boutiques are basically going into the institutional market on a stand-alone basis somewhat.

Yes, in their home markets. In Asia, we're representing all of them. It's much more efficient to do it that way out in the Asian markets. And the servicing that they require, particularly the Japanese, it's a very high level of service, so it's best done on a consolidated basis.

Got it. That's great. Thank you. And then on Pershing, just wanted to step back a little bit, a lot of crosscurrents with some doing self-clearing, some competitors exiting, probably a net headwind in the recent past. But just comparing a multi-year growth trajectory and then looking out, would you expect higher growth? Lower growth? Same? And also maybe a comment on some of the RIA price cuts at Schwab. Thank you. Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: Yeah, I would say a couple things. We've had two of our large U.S. wealth management clients owned by FIs exit and we still have one more to go. We've been obviously offsetting that fee pressure with new business from competitors in transition and pivoting more of our resources toward growth in the RIA market. We think the Department of Labor fiduciary standard is going to obviously continue to accelerate the secular trend from traditional brokerage commission-based relationships to advisory-based relationships. And Pershing is well-positioned with managed account platforms, advisory tools and an RIA custody business that's growing high-double digits to benefit from that perspective. We're also continuing to extend the prime services business in a modest, controlled way. And so there's a variety of I think longer-term trends, including those self-clearing firms that can drive reasonable growth in the clearing services business. The pressure is on the broker-dealer model overall, which is a headwind. There are 800 fewer broker-dealers in United States today than they were pre-financial crisis and there are still more pressures on their business model. So that's a headwind, but we're pivoting toward serving larger firms and the RIA market and other services, which I think will offset that.

That's great. And maybe on the competitive action from Schwab. Thomas P. Gibbons - Vice Chairman & Chief Financial Officer: We focus on professionally managing large advisors. So our targeted market in the advisory space tends to be a much larger advisory firm rather than an individual practitioner and we tend to focus also higher net-worth investors at the end of the day. So we've got some differentiating factors. For example, and this is a combination of Pershing and BNY Mellon at its best, we've integrated a bank and brokerage custody platform that enables us to deliver both of those options through a seamless front-end technology solution. Another example where we're creating distinction is through delivering private banking services to introducing broker-dealers and RIAs. We've talked about this before, but at the end of the second quarter, we've now reached $3 billion in outstanding credit facilities driven from our private banks to those RIA and broker-dealer intermediaries and over $2 billion of those facilities have been drawn and used. So that's creating a stronger competitive value proposition for those independent advisors and broker-dealers, and it's also creating sort of another virtual private banking capability for our private bank. And it's a great example of enterprise teamwork. So Schwab's obviously a market leader in what they do. We're focused on leveraging the best of BNY Mellon to distinguish ourselves in the RIA market.

And our final question will come from Gerard Cassidy of RBC.

Thank you. Good morning, guys. I had a question regarding – there was a story in this morning's paper about direct repo loans are gaining traction as the large global banks step back. Is this an opportunity for you guys to get more business from some of your existing clients or create new clients? Or could it work against you? Gerald L. Hassell - Chairman & Chief Executive Officer: It's an interesting question. We always want to maintain great credit standards before jumping into something like this. We also have to be mindful of the effect to the balance sheet. And so, there is opportunity for us to be direct with certain clients. And so, on a client-by-client basis, we're looking at it carefully.

And then second as a follow-up, Gerald, to your comment about the issues with the pension funds around the world with the rate environment, the way it is, and the unfounded liabilities, have you guys tried to quantify how much you could help them shrink that gap versus having to structurally change the pension fund, whether lowering the payout or raising the contributions by the municipality, the corporate or the entity that has it? Gerald L. Hassell - Chairman & Chief Executive Officer: Yeah. I would say in the UK, we're very, very active. We're just beginning in the U.S. and just beginning in other parts of the world. And we actually have an initiative going on here in the U.S. extending the Insight business model here. We did a small acquisition last year that's integrated into Insight to address that very issue. So, we're moving around the country and having that dialogue as we speak.

Is it fair to say that your reception is probably very good from who you're talking to? Gerald L. Hassell - Chairman & Chief Executive Officer: I would say generally, yes. There's lots of accounting challenges associated with pension liabilities and pension accounting in company's balance sheet in the U.S., so it's not an easy answer. We want to help manage to the returns, the pension funds we're looking for. We don't want to assume the pension liability. Some insurance companies are actually buying the liabilities. We don't have an interest in doing that. But we are interested in working with either the companies or those who are taking on the liabilities to manage to a prescribed return.

Great. Thank you for the color. Gerald L. Hassell - Chairman & Chief Executive Officer: Okay. Well, thank you very much everyone for dialing in. Sorry, we had to cut off the questions, but we're over time. But I know Valerie Haertel and her whole team are available for additional questions and thank you very much.

And once again, ladies and gentlemen, if there are any additional questions or comments, you may contact Ms. Valerie Haertel at (212) 635-8529. Thank you. This does conclude today's conference call webcast. Thank you again for participating.