Bank of New York Co. said Monday that it had agreed to buy a direct-access agency brokerage, Francis P. Maglio & Co. Inc., a deal that would enable Bank of New York to offer institutional investors more trading services.
Direct-access brokerages receive customer orders right on the floor of a stock exchange. Bank of New York sees the business as a growth opportunity, said Carey S. Pack, the president of its BNY ESI subsidiary.
"Direct-access trading is experiencing rapid growth in the global securities markets," Joseph M. Velli, the Bank of New York senior executive vice president in charge of brokerage and clearing, said in a press statement. The deal will "significantly enhance the execution capabilities of our clients," he said.
Bank of New York specializes in securities processing and other services for institutional clients. In recent years it has been buying up businesses to add to those capabilities. It has also used acquisitions to boost its presence in asset management.
In the first quarter Bank of New York bought Autranet Inc. from Credit Suisse First Boston. Autranet offers stock research and brokerage services and had contacts with about 500 institutional money managers, the companies said at the time.
Mr. Pack would not say how many clients Bank of New York would add through the Maglio deal, which is scheduled to close in June. (The price was not disclosed.)
Maglio would be folded into BNY ESI, and its chief operating officer, Joseph Cangemi, would become a managing director of the unit. BNY ESI is Bank of New York's trading arm and a part of its brokerage and clearing services operations.
Several large U.S. financial institutions have sought deeper connections with the stock exchanges, particularly the New York Stock Exchange, over the past few years, though most of the recent deals have been for specialist firms whose brokers make markets in specific stocks.
In late 2000 Goldman Sachs Group bought Spear Leeds & Kellogg and FleetBoston Financial Corp. acquired M.J. Meehan & Co.
