Bank of New York Mellon Corp

Recent accounting developments

The following accounting guidance issued by the Financial Accounting Standards Board (“FASB”) has not yet been adopted as of March 31, 2024.

ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”). In addition, disclosure will be required of the title and position of CODM, and how the CODM uses the reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources.

This ASU is effective for annual periods beginning after Dec. 15, 2023 with early adoption permitted. BNY Mellon is currently evaluating this guidance and the impact on the business segment disclosures.

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires a company to disclose, on an annual basis, additional disaggregated information related to the existing disclosures for the effective income tax rate reconciliation and income taxes paid.

This ASU is effective on a prospective basis, with a retrospective option, for annual periods beginning after Dec. 15, 2024, and interim periods within fiscal years beginning after Dec. 15, 2025. BNY Mellon is currently evaluating this guidance and the impact on the income tax disclosures.

Recent regulatory and other developments

For a summary of additional regulatory matters relevant to our operations, see “Supervision and Regulation” in our 2023 Annual Report. The following discussion summarizes certain regulatory, legislative and other developments that may affect BNY Mellon.

SEC Enhancement and Standardization of Climate-Related Disclosures for Investors Rule

On March 6, 2024, the SEC adopted its final climate-risk disclosure rule, which it first proposed in March 2022. The final rule is currently subject to multiple legal challenges and, on April 4, 2024, the SEC voluntarily issued an order staying the final rule pending the completion of judicial review of the legal challenges. If effective, the final rule would require registrants to disclose material climate-related information in registration statements and periodic reports, with a phased-in compliance period that varies based on disclosure content and for BNY Mellon would begin for the year-ended Dec. 31, 2025. We are assessing the developments and the potential impact of the final rule.

European and UK Financial Markets and Market Infrastructure

The EU and the UK have embarked on changes to their financial markets and market infrastructure regulations. In the EU, this is being effected by amendments to Markets in Financial Instruments Directive II and Markets in Financial Instruments Regulation, the amending instruments for which entered into force on March 28, 2024 (with secondary legislation to follow). In the UK, this is being undertaken by the UK Financial Conduct Authority pursuant to the UK Government’s Edinburgh Reforms (a series of measures to promote stability and competitive growth in the UK financial markets post-Brexit), and pursuant to the Financial Services and Markets Act 2023. These changes will in particular affect transaction reporting and market transparency obligations, as well as laying the ground for the establishment of consolidated tape providers to collate market data and provide a standardized electronic data feed in the equity and debt secondary markets. BNY Mellon will continue to monitor the practical impacts of these rules as further details emerge.

BNY Mellon 45

EU Corporate Sustainability Due Diligence Directive

On March 15, 2024, EU lawmakers approved an amended version of the Corporate Sustainability Due Diligence Directive (as amended, “CSDDD”), which the European Parliament approved on April 24, 2024. The final rules are subject to adoption by the European Council, with publication of the approved CSDDD in the Official Journal of the EU and entry into force expected in or around the third quarter of 2024. CSDDD is likely to impact BNYM given that under the CSDDD, large EU companies and non-EU companies with significant EU activity, will be required to comply with due diligence obligations (including preventing and mitigating potential adverse human rights and environmental impacts as well as ending, and minimizing the extent of, actual adverse impacts) for their operations and for their upstream chains of activities (a regulated financial undertaking’s chain of activities with downstream business partners that are receiving services and products are not in scope of CSDDD). Companies are also required to adopt a transition plan for climate change mitigation which aims to ensure, through best efforts, compatibility of the business model and strategy of the company with the transition to a sustainable economy and with the limiting of global warming to 1.5°C. CSDDD will be implemented on a phased-in basis starting three years after CSDDD’s entry into force, dependent on a company’s number of employees and net worldwide or EU turnover, with first reporting expected for financial years starting on or after Jan. 1, 2028. We are assessing the potential impact of the regulation.