National Financial opens new clearing biz

National Financial Services LLC of Boston today launched a new clearing business aimed at taking over certain operations from broker-dealers that clear and custody their own trades. Those broker-dealers will keep their own self-clearing status, but National Financial will handle operations that B-Ds want to outsource. Named National Financial Self-Clearing Outsourcing, the offering will focus on midsize to large regional, independent and bank broker-dealers. That segment of broker-dealers represents nearly $4 trillion in retail assets, National Financial said. National Financial expects to sign up its first client to the service within six months, said Norman Malo, president and chief executive of National Financial. Broker-dealers are likely to keep such clearing services as stock lending and setting their own margin requirements, while they look to outsource clearing and custody services such as tracking dividends and securities received and delivered. “Those other things are commodities,” Mr. Malo said. “Outsourcing is an acceptable practice today; it wasn’t 20 years ago.” National Financial spent $50 million developing the venture. Mark Healy, most recently National Financial’s chief operating officer and executive vice president, is executive vice president of the new business line. National Financial is a giant in the clearing and custody business, serving 330 broker-dealers and registered investment advisers, and holding in custody $709 billion in client assets.