Capital briefs: Fed Gives Mellon a Nod To Start Securities Unit

The Federal Reserve Board gave Mellon Bank Corp. permission Monday to set up a subsidiary to handle much of its securities work.

"It is an important first step in the regulatory approval process," Mellon spokesman Jim Dever said. Mr. Dever said the bank expects to receive approval from the National Association of Securities Dealers next month.

The bank wants to house its expanding securities business in the new unit, he said.

"This was a move we had been preparing for," Mr. Dever said. "It comes after we had grown our business to the point where this was the next logical step for us."

Mellon Financial Markets Inc., which will be based in Pittsburgh, can underwrite and deal in municipal revenue bonds, securities backed by mortgages on one-family to four-family properties, consumer receivable securities, and commercial paper.

Mellon Financial also can serve as an agent for the private placement of securities, and buy and sell securities on behalf of customers.

The company also can provide brokerage services and investment advice, and handle foreign currency transactional work.

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