0000030146-21-000010.txt : 20210823 0000030146-21-000010.hdr.sgml : 20210823 20210823114217 ACCESSION NUMBER: 0000030146-21-000010 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20210630 FILED AS OF DATE: 20210823 DATE AS OF CHANGE: 20210823 EFFECTIVENESS DATE: 20210823 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BNY Mellon Large Cap Securities Fund, Inc. CENTRAL INDEX KEY: 0000030146 IRS NUMBER: 136021175 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-00523 FILM NUMBER: 211195828 BUSINESS ADDRESS: STREET 1: C/O BNY MELLON INVESTMENT ADVISER, INC. STREET 2: 240 GREENWICH STREET CITY: NEW YORK STATE: NY ZIP: 10286 BUSINESS PHONE: 2129226400 MAIL ADDRESS: STREET 1: C/O BNY MELLON INVESTMENT ADVISER, INC. STREET 2: 240 GREENWICH STREET CITY: NEW YORK STATE: NY ZIP: 10286 FORMER COMPANY: FORMER CONFORMED NAME: DREYFUS FUND INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: NESBETT FUND INC DATE OF NAME CHANGE: 19680607 0000030146 S000000068 BNY Mellon Large Cap Securities Fund, Inc. C000000105 BNY Mellon Large Cap Securities Fund, Inc. DREVX N-CSRS 1 lp1-026.htm SEMI-ANNUAL REPORT

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811-00523
   
  BNY Mellon Large Cap Securities Fund, Inc.  
  (Exact name of Registrant as specified in charter)  
     
 

 

c/o BNY Mellon Investment Adviser, Inc.

240 Greenwich Street

New York, New York 10286

 
  (Address of principal executive offices)        (Zip code)  
     
 

Deirdre Cunnane, Esq.

240 Greenwich Street

New York, New York 10286

 
  (Name and address of agent for service)  
 
Registrant's telephone number, including area code:   (212) 922-6400
   

Date of fiscal year end:

 

12/31  
Date of reporting period:

06/30/2021

 

 
             

 

 

 

 
 

 

FORM N-CSR

Item 1.Reports to Stockholders.

 

BNY Mellon Large Cap Securities Fund, Inc.

 

SEMIANNUAL REPORT

June 30, 2021

 

 
 

Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.im.bnymellon.com and sign up for eCommunications. It’s simple and only takes a few minutes.

 

The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of BNY Mellon Investment Adviser, Inc. or any other person in the BNY Mellon Investment Adviser, Inc. organization. Any such views are subject to change at any time based upon market or other conditions and BNY Mellon Investment Adviser, Inc. disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a fund in the BNY Mellon Family of Funds are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any fund in the BNY Mellon Family of Funds.

 

Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value

 

Contents

THE FUND

  

Discussion of Fund Performance

2

Understanding Your Fund’s Expenses

4

Comparing Your Fund’s Expenses
With Those of Other Funds

4

Statement of Investments

5

Statement of Investments
in Affiliated Issuers

8

Statement of Assets and Liabilities

9

Statement of Operations

10

Statement of Changes in Net Assets

11

Financial Highlights

12

Notes to Financial Statements

13

Information About the Approval of
the Fund’s Management Agreement
and Approval of Sub-Investment
Advisory Agreement

22

Liquidity Risk Management Program

25

FOR MORE INFORMATION

 

Back Cover

 

DISCUSSION OF FUND PERFORMANCE (Unaudited)

For the period from January 1, 2021 through June 30, 2021, as provided by Leigh N. Todd, CFA, Erik A. Swords and Matthew Jenkin, Primary Portfolio Managers

Market and Fund Performance Overview

For the six-month period ended June 30, 2021, the BNY Mellon Large Cap Securities Fund, Inc. produced a total return of 13.65%.1 In comparison, the S&P 500® Index (the “Index”), the fund’s benchmark, provided a total return of 15.25% for the same period.2

Equity markets posted gains as the economy continued to rebound from the COVID-19 pandemic. The fund underperformed the Index largely due to unfavorable security selection.

The Fund’s Investment Approach

The fund seeks long-term capital growth consistent with the preservation of capital. Current income is a secondary goal. To pursue these goals, the fund primarily invests in common stocks issued by U.S. companies. The fund may invest up to 20% of its assets in foreign securities. In choosing stocks, we focus on large-capitalization, U.S. companies with strong positions in their industries and catalysts that can trigger a price increase. We use fundamental analysis to create a broadly diversified portfolio composed of a blend of growth stocks, value stocks and stocks that exhibit characteristics of both investment styles. We attempt to measure a security’s intrinsic value by analyzing “real” data (company financials, economic outlook, etc.) and other factors (management, industry conditions, competition, etc.) and select stocks based on their value, growth and financial profiles.

Market Rebound Continues, Inflation Concerns Emerge

Early in the reporting period, stocks benefited from a number of factors. With the approval of multiple COVID-19 vaccines in November 2020, investor sentiment improved, and the global economic outlook brightened. Returns were also boosted by interest rates, which remained low, and by the stimulus package approved by Congress, which provided support to consumers, small businesses and the economy generally. Investors also began to factor the likelihood of additional stimulus and infrastructure spending into their calculations. With the end of the pandemic in view and continued economic rebound likely, investors began to shift away from growth-oriented stocks and into value-oriented stocks.

As the end of the pandemic became more likely, government lockdowns were eased, and businesses that had been hard hit by the pandemic began to show signs of recovery. Businesses also became more confident and increased their capital spending. In addition, inventory shortages began to appear, providing another catalyst to economic growth.

Toward the end of the reporting period, the economic rebound continued, but combined with the Federal Reserve’s (the “Fed”) indications that it would tolerate higher inflation rates until the economy fully recovered, this led to a rise in inflation expectations. As a result, yields at the long end of the Treasury yield curve began to increase. These higher interest rates weighed heavily on the stock market performance, especially that of technology and other growth-oriented stocks.

Stock Selection Hindered Fund Performance

The fund’s performance was hampered primarily by unfavorable stock selection in three sectors, consumer discretionary, industrials and materials. In the consumer discretionary sector, shares of discount retail The TJX Companies were the primary detractor. Shares of Amazon.com, which rose during the period, also lagged the benchmark, hindering performance. In the industrials sector, positions in Ingersoll Rand, a maker of industrial equipment, and Union Pacific, produced positive returns but lagged the benchmark. In the materials sector, the chemical industry underperformed the materials sector, and within the chemical industry, FMC, a manufacturer of fertilizer, declined 5%. The

2

 

biggest detractor during the period was Tesla, which saw its shares decline after a strong performance in 2020.

On a more positive note, an overweight position and certain stock selections in the energy sector were beneficial. Shares of Hess and Valero Energy, in particular, contributed positively. Stock selection in the information technology sector was also advantageous. Shares in the semiconductor industry, especially Applied Materials and Nvidia, were particularly beneficial. A position in PayPal Holdings also contributed positively as did shares of Eli Lilly & Co., a drug manufacturer.

Positioned for Continued Recovery

Economic activity remains robust, and we believe the supply-and-demand dislocations that have hindered the economy and contributed to inflationary pressures will ease in the coming months. We also anticipate that earnings in the second quarter will be an additional catalyst to the market, although earnings comparisons may be more challenging for certain companies that benefited tremendously from stimulus programs and recovery in 2020. We will continue to distinguish those companies from others that have earnings that are more sustainable over the long term.

July 15, 2021

1 DUE TO RECENT MARKET VOLATILITY, CURRENT PERFORMANCE MAY BE DIFFERENT THAN THE FIGURES SHOWN. Investors should note that the fund’s short-term performance is highly unusual, in part due to unusually favorable market conditions, and is unlikely to be repeated or consistently achieved in the future. Total return includes reinvestment of dividends and any capital gains paid. Past performance is no guarantee of future results. Share price and investment returns fluctuate such that upon redemption, fund shares may be worth more or less than their original cost.

2 Source: Lipper Inc. — The S&P 500® Index is widely regarded as the best single gauge of large-cap U.S. equities. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization. Investors cannot invest directly in any index.

Equities are subject generally to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus.

Investing in foreign denominated and/or domiciled securities involves special risks, including changes in currency exchange rates, political, economic, and social instability, limited company information, differing auditing and legal standards, and less market liquidity. These risks generally are greater with emerging market countries.

Recent market risks include pandemic risks related to COVID-19. The effects of COVID-19 have contributed to increased volatility in global markets and will likely affect certain countries, companies, industries and market sectors more dramatically than others. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.

The fund may, but is not required to, use derivative instruments. A small investment in derivatives could have a potentially large impact

on the fund’s performance. The use of derivatives involves risks different from, or possibly greater than, the risks associated with investing

directly in the underlying assets.

3

 

UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in BNY Mellon Large Cap Securities Fund, Inc. from January 1, 2021 to June 30, 2021. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

    

Expenses and Value of a $1,000 Investment

 

Assume actual returns for the six months ended June 30, 2021

 

 

 

 

 

 

 

 

 

Expenses paid per $1,000

$3.76

 

Ending value (after expenses)

$1,136.50

 

COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS (Unaudited)

Using the SEC’s method to compare expenses

The Securities and Exchange Commission (“SEC”) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

    

Expenses and Value of a $1,000 Investment

 

Assuming a hypothetical 5% annualized return for the six months ended June 30, 2021

 

 

 

 

 

 

 

 

 

Expenses paid per $1,000

$3.56

 

Ending value (after expenses)

$1,021.27

 

Expenses are equal to the fund’s annualized expense ratio of .71%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

4

 

STATEMENT OF INVESTMENTS
June 30, 2021 (Unaudited)

        
 

Description

   

Shares

 

Value ($)

 

Common Stocks - 98.5%

     

Automobiles & Components - 1.6%

     

Tesla

   

41,078

a 

 27,920,717

 

Banks - 5.8%

     

JPMorgan Chase & Co.

   

307,885

 

47,888,433

 

The PNC Financial Services Group

   

148,132

 

28,257,660

 

U.S. Bancorp

   

392,404

 

22,355,256

 
    

98,501,349

 

Capital Goods - 10.5%

     

AMETEK

   

194,808

 

26,006,868

 

Howmet Aerospace

   

503,518

a 

17,356,265

 

Ingersoll Rand

   

779,805

a 

38,062,282

 

Rockwell Automation

   

77,321

b 

22,115,352

 

Roper Technologies

   

68,886

 

32,390,197

 

Trane Technologies

   

231,692

 

42,663,765

 
    

178,594,729

 

Consumer Durables & Apparel - 1.1%

     

VF

   

230,214

 

 18,886,757

 

Consumer Services - 1.3%

     

Booking Holdings

   

9,873

a 

 21,603,013

 

Diversified Financials - 3.9%

     

BlackRock

   

38,046

 

33,289,109

 

The Goldman Sachs Group

   

87,731

 

33,296,546

 
    

66,585,655

 

Energy - 5.0%

     

EQT

   

1,411,057

a,b 

31,410,129

 

Hess

   

390,929

 

34,135,920

 

Valero Energy

   

263,527

 

20,576,188

 
    

86,122,237

 

Food & Staples Retailing - 1.4%

     

Walmart

   

169,170

 

 23,856,353

 

Food, Beverage & Tobacco - 2.0%

     

PepsiCo

   

230,923

 

 34,215,861

 

Health Care Equipment & Services - 6.9%

     

Danaher

   

136,358

 

36,593,033

 

Edwards Lifesciences

   

257,225

a 

26,640,793

 

Intuitive Surgical

   

30,342

a 

27,903,717

 

Medtronic

   

215,794

 

26,786,509

 
    

117,924,052

 

Insurance - 2.4%

     

Chubb

   

125,402

 

19,931,394

 

The Progressive

   

212,169

 

20,837,117

 
    

40,768,511

 

5

 

STATEMENT OF INVESTMENTS (Unaudited) (continued)

        
 

Description

   

Shares

 

Value ($)

 

Common Stocks - 98.5% (continued)

     

Materials - 1.1%

     

FMC

   

179,486

 

 19,420,385

 

Media & Entertainment - 8.1%

     

Alphabet, Cl. C

   

39,729

a 

99,573,587

 

Match Group

   

49,614

a,b 

8,000,258

 

The Walt Disney Company

   

178,352

a 

31,348,931

 
    

138,922,776

 

Pharmaceuticals Biotechnology & Life Sciences - 7.7%

     

AbbVie

   

277,899

 

31,302,543

 

Biogen

   

44,995

a 

15,580,419

 

Eli Lilly & Co.

   

172,942

 

39,693,648

 

Seagen

   

117,634

a 

18,572,056

 

Zoetis

   

137,839

 

25,687,676

 
    

130,836,342

 

Retailing - 6.6%

     

Amazon.com

   

26,335

a 

90,596,614

 

The TJX Companies

   

337,733

 

22,769,959

 
    

113,366,573

 

Semiconductors & Semiconductor Equipment - 7.4%

     

Applied Materials

   

294,642

 

41,957,021

 

NVIDIA

   

71,020

 

56,823,102

 

Qualcomm

   

190,635

 

27,247,461

 
    

126,027,584

 

Software & Services - 13.8%

     

Ansys

   

45,701

a 

15,860,989

 

Microsoft

   

360,762

 

97,730,426

 

PayPal Holdings

   

158,659

a 

46,245,925

 

salesforce.com

   

135,388

a 

33,071,227

 

Visa, Cl. A

   

179,713

b 

42,020,494

 
    

234,929,061

 

Technology Hardware & Equipment - 8.0%

     

Apple

   

830,771

 

113,782,396

 

Zebra Technologies, Cl. A

   

41,815

a 

22,140,624

 
    

135,923,020

 

Transportation - 2.1%

     

Union Pacific

   

161,440

 

 35,505,499

 

Utilities - 1.8%

     

NextEra Energy

   

412,965

 

 30,262,075

 

Total Common Stocks (cost $935,426,928)

   

1,680,172,549

 

6

 
        
 

Description

 

1-Day
Yield (%)

 

Shares

 

Value ($)

 

Investment Companies - 1.6%

     

Registered Investment Companies - 1.6%

     

Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares
(cost $27,066,434)

 

0.05

 

27,066,434

c 

 27,066,434

 

Total Investments (cost $962,493,362)

 

100.1%

 

1,707,238,983

 

Liabilities, Less Cash and Receivables

 

(.1%)

 

(1,209,087)

 

Net Assets

 

100.0%

 

1,706,029,896

 

a Non-income producing security.

b Security, or portion thereof, on loan. At June 30, 2021, the value of the fund’s securities on loan was $72,922,089 and the value of the collateral was $74,336,110, consisting of U.S. Government & Agency securities.

c Investment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company’s prospectus.

  

Portfolio Summary (Unaudited)

Value (%)

Information Technology

29.1

Health Care

14.6

Industrials

12.6

Financials

12.1

Consumer Discretionary

10.7

Communication Services

8.1

Energy

5.0

Consumer Staples

3.4

Utilities

1.8

Investment Companies

1.6

Materials

1.1

 

100.1

 Based on net assets.

See notes to financial statements.

7

 

STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)

       

Investment Companies

Value
12/31/20($)

Purchases($)

Sales($)

Value
6/30/21($)

Net
Assets(%)

Dividends/
Distributions($)

Registered Investment Companies:

   

Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares

9,086,100

90,348,716

(72,368,382)

27,066,434

1.6

4,501

 Includes reinvested dividends/distributions.

See notes to financial statements.

8

 

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2021 (Unaudited)

       

 

 

 

 

 

 

 

 

 

 

Cost

 

Value

 

Assets ($):

 

 

 

 

Investments in securities—See Statement of Investments
(including securities on loan, valued at $72,922,089)—Note 1(c):

 

 

 

Unaffiliated issuers

935,426,928

 

1,680,172,549

 

Affiliated issuers

 

27,066,434

 

27,066,434

 

Dividends and securities lending income receivable

 

669,684

 

Receivable for shares of Common Stock subscribed

 

10,125

 

Prepaid expenses

 

 

 

 

28,989

 

 

 

 

 

 

1,707,947,781

 

Liabilities ($):

 

 

 

 

Due to BNY Mellon Investment Adviser, Inc. and affiliates—Note 3(b)

 

958,700

 

Cash overdraft due to Custodian

 

 

 

 

244,800

 

Payable for shares of Common Stock redeemed

 

622,465

 

Directors’ fees and expenses payable

 

8,895

 

Other accrued expenses

 

 

 

 

83,025

 

 

 

 

 

 

1,917,885

 

Net Assets ($)

 

 

1,706,029,896

 

Composition of Net Assets ($):

 

 

 

 

Paid-in capital

 

 

 

 

847,917,671

 

Total distributable earnings (loss)

 

 

 

 

858,112,225

 

Net Assets ($)

 

 

1,706,029,896

 

     

Shares Outstanding

 

 

(500 million shares of $1 par value Common Stock authorized)

104,443,877

 

Net Asset Value Per Share ($)

 

16.33

 

 

 

 

 

 

See notes to financial statements.

 

 

  

 

9

 

STATEMENT OF OPERATIONS
Six Months Ended June 30, 2021 (Unaudited)

       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Income ($):

 

 

 

 

Income:

 

 

 

 

Cash dividends:

 

Unaffiliated issuers

 

 

9,231,752

 

Affiliated issuers

 

 

4,501

 

Income from securities lending—Note 1(c)

 

 

8,845

 

Total Income

 

 

9,245,098

 

Expenses:

 

 

 

 

Management fee—Note 3(a)

 

 

5,154,551

 

Shareholder servicing costs—Note 3(b)

 

 

230,353

 

Professional fees

 

 

79,982

 

Directors’ fees and expenses—Note 3(c)

 

 

58,320

 

Prospectus and shareholders’ reports

 

 

30,358

 

Loan commitment fees—Note 2

 

 

22,447

 

Registration fees

 

 

18,797

 

Custodian fees—Note 3(b)

 

 

11,853

 

Chief Compliance Officer fees—Note 3(b)

 

 

7,862

 

Miscellaneous

 

 

11,227

 

Total Expenses

 

 

5,625,750

 

Investment Income—Net

 

 

3,619,348

 

Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):

 

 

Net realized gain (loss) on investments and foreign currency transactions

112,874,188

 

Net realized gain (loss) on forward foreign currency exchange contracts

(15)

 

Net Realized Gain (Loss)

 

 

112,874,173

 

Net change in unrealized appreciation (depreciation) on investments

91,026,419

 

Net Realized and Unrealized Gain (Loss) on Investments

 

 

203,900,592

 

Net Increase in Net Assets Resulting from Operations

 

207,519,940

 

 

 

 

 

 

 

 

See notes to financial statements.

     

10

 

STATEMENT OF CHANGES IN NET ASSETS

          

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended
June 30, 2021 (Unaudited)

 

Year Ended
December 31, 2020

 

Operations ($):

 

 

 

 

 

 

 

 

Investment income—net

 

 

3,619,348

 

 

 

8,966,852

 

Net realized gain (loss) on investments

 

112,874,173

 

 

 

113,750,963

 

Net change in unrealized appreciation
(depreciation) on investments

 

91,026,419

 

 

 

206,565,495

 

Net Increase (Decrease) in Net Assets
Resulting from Operations

207,519,940

 

 

 

329,283,310

 

Distributions ($):

 

Distributions to shareholders

 

 

(39,460,447)

 

 

 

(93,212,040)

 

Capital Stock Transactions ($):

 

Net proceeds from shares sold

 

 

3,778,893

 

 

 

6,353,026

 

Distributions reinvested

 

 

36,197,323

 

 

 

85,130,582

 

Cost of shares redeemed

 

 

(48,073,942)

 

 

 

(97,031,498)

 

Increase (Decrease) in Net Assets
from Capital Stock Transactions

(8,097,726)

 

 

 

(5,547,890)

 

Total Increase (Decrease) in Net Assets

159,961,767

 

 

 

230,523,380

 

Net Assets ($):

 

Beginning of Period

 

 

1,546,068,129

 

 

 

1,315,544,749

 

End of Period

 

 

1,706,029,896

 

 

 

1,546,068,129

 

Capital Share Transactions (Shares):

 

Shares sold

 

 

247,252

 

 

 

484,802

 

Shares issued for distributions reinvested

 

 

2,447,364

 

 

 

6,128,006

 

Shares redeemed

 

 

(3,148,301)

 

 

 

(7,559,244)

 

Net Increase (Decrease) in Shares Outstanding

(453,685)

 

 

 

(946,436)

 

 

 

 

 

 

 

 

 

 

 

See notes to financial statements.

        

11

 

FINANCIAL HIGHLIGHTS

The following table describes the performance for the fiscal periods indicated. Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. These figures have been derived from the fund’s financial statements.

         
   

Six Months Ended

June 30, 2021

Year Ended December 31,

(Unaudited)

2020

2019

2018

2017

2016

Per Share Data ($):

      

Net asset value,
beginning of period

14.74

12.43

10.47

11.55

10.54

10.68

Investment Operations:

      

Investment income—neta

.03

.09

.15

.11

.09

.11

Net realized and unrealized
gain (loss) on investments

1.95

3.15

2.65

(.24)

1.97

.67

Total from Investment Operations

1.98

3.24

2.80

(.13)

2.06

.78

Distributions:

      

Dividends from
investment income—net

(.04)

(.09)

(.15)

(.12)

(.10)

(.11)

Dividends from net realized
gain on investments

(.35)

(.84)

(.69)

(.83)

(.95)

(.81)

Total Distributions

(.39)

(.93)

(.84)

(.95)

(1.05)

(.92)

Net asset value,
end of period

16.33

14.74

12.43

10.47

11.55

10.54

Total Return (%)

13.65b

26.56

27.06

(1.20)

20.12

7.23

Ratios/Supplemental Data (%):

Ratio of total expenses
to average net assets

.71c

.71

.72

.71

.75

.76

Ratio of net investment
income to average
net assets

.46c

.67

1.23

.98

.82

1.01

Portfolio Turnover Rate

13.80b

44.24

27.73

32.16

40.41

68.83

Net Assets,
end of period ($ x 1,000)

1,706,030

1,546,068

1,315,545

1,132,091

1,232,034

1,118,858

a Based on average shares outstanding.

b Not annualized.

c Annualized.

See notes to financial statements.

12

 

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

BNY Mellon Large Cap Securities Fund, Inc. (the “fund”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), is a diversified open-end management investment company. The fund’s investment objective is to seek long-term capital growth consistent with the preservation of capital. BNY Mellon Investment Adviser, Inc. (the “Adviser”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. BNY Mellon Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Adviser, is the distributor of the fund’s shares, which are sold to the public without a sales charge.

On February 10, 2021, BNY Mellon Investment Management announced its intention to realign several of its investment firms. As a result of this realignment, which is scheduled to occur, subject to regulatory requirements, in the third quarter of 2021 (the “Effective Date”), portfolio managers responsible for managing the fund’s investments who are employees of Mellon Investments Corporation (“Mellon”) in a dual employment arrangement with the Adviser, will become employees of Newton Investment Management North America, LLC (“Newton”), which, like Mellon, will be an affiliate of the Adviser, and will no longer be employees of Mellon. Consequently, as of the Effective Date and subject to the approval of the fund’s Board of Directors (the “Board”), the Adviser will engage Newton to serve as the fund’s sub-adviser, pursuant to a sub-investment advisory agreement between the Adviser and Newton. As the fund’s sub-adviser, Newton will provide the day-to-day management of the fund’s investments, subject to the Adviser’s supervision and approval. It is currently anticipated that the fund’s portfolio managers who are responsible for the day-to-day management of the fund’s investments will continue to manage the fund’s investments as of the Effective Date. It is also currently anticipated that there will be no material changes to the fund’s investment objective, strategies or policies, no reduction in the nature or level of services provided to the fund, and no increase in the management fee payable by the fund as a result of the engagement of Newton as the fund’s sub-adviser. The Adviser (and not the fund) will pay Newton for its sub-advisory services.

The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund is an investment

13

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

company and applies the accounting and reporting guidance of the FASB ASC Topic 946 Financial Services-Investment Companies. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.

The fund enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.

(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.

Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:

Level 1—unadjusted quoted prices in active markets for identical investments.

Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).

Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:

14

 

Investments in equity securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. For open short positions, asked prices are used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are generally categorized within Level 1 of the fair value hierarchy.

Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. These securities are generally categorized within Level 2 of the fair value hierarchy.

Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.

When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.

For securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.

Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange.

The following is a summary of the inputs used as of June 30, 2021 in valuing the fund’s investments:

15

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

       
 

Level 1-Unadjusted Quoted Prices

Level 2- Other Significant Observable Inputs

 

Level 3-Significant Unobservable Inputs

Total

 

Assets ($)

  

Investments In Securities:

  

Equity Securities - Common Stocks

1,680,172,549

-

 

-

1,680,172,549

 

Investment Companies

27,066,434

-

 

-

27,066,434

 

 See Statement of Investments for additional detailed categorizations, if any.

(b) Foreign currency transactions: The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized on securities transactions between trade and settlement date, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments resulting from changes in exchange rates. Foreign currency gains and losses on foreign currency transactions are also included with net realized and unrealized gain or loss on investments.

(c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.

Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of the Adviser, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by the Adviser, or U.S. Government and Agency securities. The

16

 

fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, The Bank of New York Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund’s rights against the borrower and the collateral. Additionally, the contractual maturity of security lending transactions are on an overnight and continuous basis. During the period ended June 30, 2021, The Bank of New York Mellon earned $1,206 from the lending of the fund’s portfolio securities, pursuant to the securities lending agreement.

(d) Affiliated issuers: Investments in other investment companies advised by the Adviser are considered “affiliated” under the Act.

(e) Risk: Certain events particular to the industries in which the fund’s investments conduct their operations, as well as general economic, political and public health conditions, may have a significant negative impact on the investee’s operations and profitability. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers, which could adversely affect the fund. Global economies and financial markets are becoming increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. Recent examples include pandemic risks related to COVID-19 and aggressive measures taken world-wide in response by governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines of large populations, and by businesses, including changes to operations and reducing staff. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.

(f) Dividends and distributions to shareholders: Dividends and distributions are recorded on the ex-dividend date. Dividends from investment income-net are normally declared and paid quarterly. Dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital

17

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.

(g) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.

As of and during the period ended June 30, 2021, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended June 30, 2021, the fund did not incur any interest or penalties.

Each tax year in the three-year period ended December 31, 2020 remains subject to examination by the Internal Revenue Service and state taxing authorities.

The tax character of distributions paid to shareholders during the fiscal year ended December 31, 2020 was as follows: ordinary income $9,110,641 and long-term capital gains $84,101,399. The tax character of current year distributions will be determined at the end of the current fiscal year.

NOTE 2—Bank Lines of Credit:

The fund participates with other long-term open-end funds managed by the Adviser in a $823.5 million unsecured credit facility led by Citibank, N.A. (the “Citibank Credit Facility”) and a $300 million unsecured credit facility provided by The Bank of New York Mellon (the “BNYM Credit Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions (each, a “Facility”). The Citibank Credit Facility is available in two tranches: (i) Tranche A is in an amount equal to $688.5 million and is available to all long-term open-ended funds, including the fund, and (ii) Tranche B is an amount equal to $135 million and is available only to BNY Mellon Floating Rate Income Fund, a series of BNY Mellon Investment Funds IV, Inc. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for Tranche A of the Citibank Credit Facility and the BNYM Credit Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended June 30, 2021, the fund did not borrow under the Facilities.

18

 

NOTE 3—Management Fee and Other Transactions with Affiliates:

(a) Pursuant to a management agreement (the “Agreement”) with the Adviser, the management fee is payable monthly, based on the following annual percentages of the value of the fund’s average daily net assets: .65% of the first $1.5 billion; .625% of the next $500 million; .60% of the next $500 million; and .55% over $2.5 billion. The effective management fee rate during the period ended June 30, 2021 was .65%.

The Agreement also provides for an expense reimbursement from the Adviser should the fund’s aggregate expenses (excluding taxes and brokerage commissions) exceed 1% of the value of the fund’s average daily net assets for any full fiscal year. During the period ended June 30, 2021, there was no reduction in expenses pursuant to the Agreement.

(b) The fund has an arrangement with the transfer agent whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency fees. For financial reporting purposes, the fund includes net earnings credits, if any, as shareholder servicing costs in the Statement of Operations.

The fund has an arrangement with the custodian whereby the fund will receive interest income or be charged an overdraft fees when cash balances are maintained. For financial reporting purposes, the fund includes this interest income and overdraft fees, if any, as interest income in the Statement of Operations.

The fund compensates BNY Mellon Transfer, Inc., a wholly-owned subsidiary of the Adviser, under a transfer agency agreement for providing transfer agency and cash management services inclusive of earnings credits, if any, for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended June 30, 2021, the fund was charged $153,516 for transfer agency services, inclusive of earnings credit, if any. These fees are included in Shareholder servicing costs in the Statement of Operations.

The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended June 30, 2021, the fund was charged $11,853 pursuant to the custody agreement.

During the period ended June 30, 2021, the fund was charged $7,862 for services performed by the Chief Compliance Officer and his staff. These

19

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

fees are included in Chief Compliance Officer fees in the Statement of Operations.

The components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates” in the Statement of Assets and Liabilities consist of: management fees of $891,338, custodian fees of $5,100, Chief Compliance Officer fees of $7,862 and transfer agency fees of $54,400.

(c) Each Board member also serves as a Board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities and forward foreign currency exchange contracts (“forward contracts”), during the period ended June 30, 2021, amounted to $218,020,565 and $279,003,348, respectively.

Derivatives: A derivative is a financial instrument whose performance is derived from the performance of another asset. The fund enters into International Swaps and Derivatives Association, Inc. Master Agreements or similar agreements (collectively, “Master Agreements”) with its over-the-counter derivative contract counterparties in order to, among other things, reduce its credit risk to counterparties. Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under a Master Agreement, the fund may offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment in the event of default or termination.

Each type of derivative instrument that was held by the fund during the period ended June 30, 2021 is discussed below.

Forward Foreign Currency Exchange Contracts: The fund enters into forward contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to settle foreign currency transactions or as a part of its investment strategy. When executing forward contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward contracts, the fund incurs a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed. The fund realizes a gain if the value of the contract decreases between those dates. With respect to purchases of forward contracts, the fund incurs a loss if the value of the contract decreases between the date the forward contract is opened and the date the

20

 

forward contract is closed. The fund realizes a gain if the value of the contract increases between those dates. Any realized or unrealized gains or losses which occurred during the period are reflected in the Statement of Operations. The fund is exposed to foreign currency risk as a result of changes in value of underlying financial instruments. The fund is also exposed to credit risk associated with counterparty nonperformance on these forward contracts, which is generally limited to the unrealized gain on each open contract. This risk may be mitigated by Master Agreements, if any, between the fund and the counterparty and the posting of collateral, if any, by the counterparty to the fund to cover the fund’s exposure to the counterparty. At June 30, 2021, there were no forward contracts outstanding.

The following summarizes the average market value of derivatives outstanding during the period ended June 30, 2021:

   

 

 

Average Market Value ($)

Forward contracts

 

106

At June 30, 2021, accumulated net unrealized appreciation on investments was $744,745,621, consisting of $755,920,274 gross unrealized appreciation and $11,174,653 gross unrealized depreciation.

At June 30, 2021, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).

21

 

INFORMATION ABOUT THE APPROVAL OF THE FUND’S MANAGEMENT AGREEMENT AND APPROVAL OF SUB-INVESTMENT ADVISORY AGREEMENT (Unaudited)

At a meeting of the fund’s Board of Directors held on May 18, 2021 (the “Meeting”), the Board discussed with representatives of the Adviser plans to realign Mellon Investments Corporation’s (“Mellon”) equities and multi-asset capabilities with Newton Investment Management North America, LLC (“Newton US”) (the “Firm Realignment”), with such realignment scheduled to occur, subject to regulatory requirements, in the third quarter of 2021 (the “Effective Date”). The Adviser noted that, as a result of the Firm Realignment, the portfolio managers who are currently responsible for managing the investments of the fund as employees of Mellon in a dual employment arrangement with the Adviser, will become employees of Newton US as of the Effective Date. Consequently, the Adviser proposed to engage Newton US to serve as the fund’s sub-investment adviser, pursuant to a sub-investment advisory agreement between the Adviser and Newton US (the “New Sub-Advisory Agreement”), to be effective on the Effective Date. In addition, the Adviser proposed amending the Fund’s current management agreement (the “Current Management Agreement”) to more clearly reflect the Adviser’s ability to employ one or more sub-investment advisers to manage the fund on a day-to-day basis and the Adviser’s responsibility to oversee and supervise any such sub-investment adviser, and to reflect the engagement of Newton US as sub-investment adviser to the fund (as proposed to be amended, the “Amended Management Agreement”), to be effective on the Effective Date.

At the Meeting, the Adviser recommended the approval of the New Sub-Advisory Agreement, pursuant to which Newton US would serve as sub-investment adviser to the fund, and the Amended Management Agreement. The recommendation for the approval of the New Sub-Advisory Agreement and the Amended Management Agreement was based on the following considerations, among others: (i) approval of the New Sub-Advisory Agreement and the Amended Management Agreement would permit the fund’s current portfolio managers to continue to be responsible for the day-to-day management of the Fund’s portfolio after the Effective Date as employees of Newton US; (ii) there will be no material changes to the fund’s investment objective, strategies or policies, no reduction in the nature or level of services provided to the fund, and no increases in the management fee payable by the fund as a result of the proposed changes to the investment advisory arrangements; and (iii) the Adviser (and not the fund) will pay Newton US for its sub-investment advisory services. The Board also considered the fact that the Adviser stated that it believes there are no material changes to the information the Board had previously considered at a Board meeting on July 20-21, 2020 (the “15(c) Meeting”), at which the Board re-approved the Current Management Agreement for the ensuing year, other than the information about the Firm Realignment and Newton US.

At the Meeting, the Board members, a majority of whom are not “interested persons” (as defined in the Investment Company Act of 1940, as amended (the “1940 Act”)) of the fund (the “Independent Directors”), considered and approved the New Sub-Advisory Agreement and the Amended Management Agreement. In determining

22

 

whether to approve the New Sub-Advisory Agreement and the Amended Management Agreement, the Board considered the materials prepared by the Adviser received in advance of the Meeting and other information presented at the Meeting, which included: (i) a form of the New Sub-Advisory Agreement and a form of the Amended Management Agreement; (ii) information regarding the Firm Realignment and how it is expected to enhance investment capabilities; (iii) information regarding Newton US; and (iv) an opinion of counsel that the proposed changes to the investment advisory arrangements would not result in an “assignment” of the Current Management Agreement under the 1940 Act and the Investment Advisers Act of 1940, as amended, and, therefore, do not require the approval of fund shareholders. The Board also considered the substance of discussions with representatives of the Adviser at the Meeting and the 15(c) Meeting.

Nature, Extent and Quality of Services to be Provided. In examining the nature, extent and quality of the services that were expected to be provided by Newton US to the fund under the New Sub-Advisory Agreement, the Board considered: (i) Newton US’s organization, qualification and background, as well as the qualifications of its personnel; (ii) the expertise of the personnel providing portfolio management services, which would remain the same after the Effective Date; and (iii) the investment strategy for the fund, which would remain the same after the Effective Date. The Board also considered the review process undertaken by the Adviser and the Adviser’s favorable assessment of the nature and quality of the sub-investment advisory services expected to be provided to the fund by Newton US after the Effective Date. Based on their consideration and review of the foregoing information, the Board concluded that the nature, extent and quality of the sub-investment advisory services to be provided by Newton US under the New Sub-Advisory Agreement, as well as Newton US’s ability to render such services based on its resources and the experience of the investment team, which will include the fund’s current portfolio managers, were adequate and appropriate for the fund in light of the fund’s investment objective, and supported a decision to approve the New Sub-Advisory Agreement. The Board also considered, as it related to the Amended Management Agreement, that the nature, extent and quality of the services that are provided by the Adviser are expected to remain the same, including the Adviser’s extensive administrative, accounting and compliance infrastructures, as well as the Adviser’s supervisory activities over the fund’s portfolio management personnel.

Investment Performance. The Board had considered the fund’s investment performance and that of the investment team managing the fund’s portfolio at the 15(c) Meeting (including comparative data provided by Broadridge Financial Solutions, Inc.). The Board considered the performance and that the same investment professionals would continue to manage the fund’s assets after the Effective Date, as factors in evaluating the services to be provided by Newton US under the New Sub-Advisory Agreement after the Effective Date, and determined that these factors, when viewed together with the other factors considered by the Board, supported a decision to approve the New Sub-Advisory Agreement and the Amended Management Agreement.

23

 

INFORMATION ABOUT THE APPROVAL OF THE FUND’S MANAGEMENT AGREEMENT AND APPROVAL OF SUB-INVESTMENT ADVISORY AGREEMENT (Unaudited) (continued)

Costs of Services to be Provided and Profitability. The Board considered the proposed fee payable under the New Sub-Advisory Agreement, noting that the proposed fee would be paid by the Adviser and, thus, would not impact the fees paid by the fund or the Adviser’s profitability. The Board considered the fee payable to Newton US in relation to the fee paid to the Adviser by the fund and the respective services provided by Newton US and the Adviser. The Board recognized that, because Newton US’s fee would be paid by the Adviser, and not the fund, an analysis of profitability was more appropriate in the context of the Board’s consideration of the fund’s Current Management Agreement, and that the Board had received and considered a profitability analysis of the Adviser and its affiliates, including Newton US, at the 15(c) Meeting. The Board concluded that the proposed fee payable to Newton US by the Adviser was appropriate and the Adviser’s profitability was not excessive in light of the nature, extent and quality of the services to be provided to the fund by the Adviser under the Amended Management Agreement and Newton US under the New Sub-Advisory Agreement.

Economies of Scale to be Realized. The Board recognized that, because the fee payable to Newton US would be paid by the Adviser, and not the fund, an analysis of economies of scale was more appropriate in the context of the Board’s consideration of the Current Management Agreement, which had been done at the 15(c) Meeting. At the 15(c) Meeting, the Board determined that the economies of scale which may accrue to the Adviser and its affiliates in connection with the management of the fund had been adequately considered by the Adviser in connection with the fee rate charged to the fund pursuant to the Current Management Agreement and that, to the extent in the future it were determined that material economies of scale had not been shared with the fund, the Board would seek to have those economies of scale shared with the fund.

The Board also considered whether there were any ancillary benefits that would accrue to Newton US as a result of its relationship with the fund, and such ancillary benefits, if any, were determined to be reasonable.

In considering the materials and information described above, the Independent Directors received assistance from, and met separately with, their independent legal counsel, and were provided with a written description of their statutory responsibilities and the legal standards that are applicable to the approval of investment advisory and sub-investment advisory agreements.

After full consideration of the factors discussed above, with no single factor identified as being of paramount importance, the Board members, a majority of whom are Independent Directors, with the assistance of independent legal counsel, approved the New Sub-Advisory Agreement and Amended Management Agreement for the fund effective as of the Effective Date.

24

 

LIQUIDITY RISK MANAGEMENT PROGRAM (Unaudited)

Effective June 1, 2019, the fund adopted a liquidity risk management program (the “Liquidity Risk Management Program”) pursuant to the requirements of Rule 22e-4 under the Investment Company Act of 1940, as amended. Rule 22e-4 requires registered open-end funds, including mutual funds and exchange-traded funds but not money market funds, to establish liquidity risk management programs in order to effectively manage fund liquidity and shareholder redemptions. The rule is designed to mitigate the risk that a fund could not meet redemption requests without significantly diluting the interests of remaining investors.

The rule requires the fund to assess, manage and review their liquidity risk at least annually considering applicable factors such as investment strategy and liquidity during normal and foreseeable stressed conditions, including whether the strategy is appropriate for an open-end fund and whether the fund has a relatively concentrated portfolio or large positions in particular issuers. The fund must also assess its use of borrowings and derivatives, short-term and long-term cash flow projections in normal and stressed conditions, holdings of cash and cash equivalents, and borrowing arrangements and other funding sources.

The rule also requires the fund to classify its investments as highly liquid, moderately liquid, less liquid or illiquid based on the number of days the fund expects it would take to liquidate the investment, and to review these classifications at least monthly or more often under certain conditions. The periods range from three or fewer business days for a highly liquid investment to greater than seven calendar days for settlement of a less liquid investment. Illiquid investments are those a fund does not expect to be able to sell or dispose of within seven calendar days without significantly changing the market value. The fund is prohibited from acquiring an investment if, after the acquisition, its holdings of illiquid assets will exceed 15% of its net assets. In addition, if a fund permits redemptions in-kind, the rule requires the fund to establish redemption in-kind policies and procedures governing how and when it will engage in such redemptions.

Pursuant to the rule’s requirements, the Liquidity Risk Management Program has been reviewed and approved by the Board. Furthermore, the Board has received a written report prepared by the Program’s Administrator that addresses the operation of the Program, assesses its adequacy and effectiveness and describes any material changes made to the Program.

Assessment of Program

In the opinion of the Program Administrator, the Program approved by the Board continues to be adequate for the fund and the Program has been implemented effectively. The Program Administrator has monitored the fund’s liquidity risk and the liquidity classification of the securities held by the fund and has determined that the Program is operating effectively.

During the period from January 1, 2020 to December 31, 2020, there were no material changes to the Program and no material liquidity events that impacted the fund. During the period, the fund held sufficient highly liquid assets to meet fund redemptions.

Under normal expected foreseeable fund redemption forecasts and foreseeable stressed fund redemption forecasts, the Program Administrator believes that the fund maintains sufficient highly liquid assets to meet expected fund redemptions.

25

 
For More Information

BNY Mellon Large Cap Securities Fund, Inc.

240 Greenwich Street
New York, NY 10286

Adviser

BNY Mellon Investment Adviser, Inc.
240 Greenwich Street
New York, NY 10286

Custodian

The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286

Transfer Agent &
Dividend Disbursing Agent

BNY Mellon Transfer, Inc.
240 Greenwich Street
New York, NY 10286

Distributor

BNY Mellon Securities Corporation
240 Greenwich Street
New York, NY 10286

  

Ticker Symbol:

DREVX

Telephone Call your financial representative or 1-800-373-9387

Mail The BNY Mellon Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144

E-mail Send your request to info@bnymellon.com

Internet Information can be viewed online or downloaded at www.im.bnymellon.com

The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-PORT. The fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov.

A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.im.bnymellon.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-373-9387.

  

© 2021 BNY Mellon Securities Corporation
0026SA0621

 

 

 

 
 

 

 

Item 2.Code of Ethics.

Not applicable.

Item 3.Audit Committee Financial Expert.

Not applicable.

Item 4.Principal Accountant Fees and Services.

Not applicable.

Item 5.Audit Committee of Listed Registrants.

Not applicable.

Item 6.Investments.

(a)        Not applicable.

Item 7.Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8.Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9.Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.

Not applicable.

Item 10.Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures applicable to Item 10.

Item 11.Controls and Procedures.

(a)       The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b)       There were no changes to the Registrant's internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.

 
 
Item 12.Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not applicable.

Item 13.Exhibits.

(a)(1) Not applicable.

(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.

(a)(3) Not applicable.

(b)       Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.

 
 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

BNY Mellon Large Cap Securities Fund, Inc.

By: /s/ David DiPetrillo
       David DiPetrillo
        President (Principal Executive Officer)

 

Date: August 20, 2021

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

By: /s/ David DiPetrillo
       David DiPetrillo
       President (Principal Executive Officer)

 

Date: August 20, 2021

 

 

By: /s/ James Windels
       James Windels
       Treasurer (Principal Financial Officer)

 

Date: August 20, 2021

 

 

 

 
 

EXHIBIT INDEX

(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)

(b)       Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940. (EX-99.906CERT)

EX-99.CERT 2 exhibit302-026.htm CERTIFICATION REQUIRED BY RULE 30A-2

[EX-99.CERT]—Exhibit (a)(2)

SECTION 302 CERTIFICATION

 

I, David DiPetrillo, certify that:

1. I have reviewed this report on Form N-CSR of BNY Mellon Large Cap Securities Fund, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By:       /s/ David DiPetrillo

David DiPetrillo

President (Principal Executive Officer)

Date:       August 20, 2021

 
 

SECTION 302 CERTIFICATION

I, James Windels, certify that:

1. I have reviewed this report on Form N-CSR of BNY Mellon Large Cap Securities Fund, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By:       /s/ James Windels

James Windels

Treasurer (Principal Financial Officer)

Date:       August 20, 2021

 

EX-99.906 CERT 3 exhibit906-026.htm CERTIFICATION REQUIRED BY SECTION 906

[EX-99.906CERT]

Exhibit (b)

 

 

SECTION 906 CERTIFICATIONS

In connection with this report on Form N-CSR for the Registrant as furnished to the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)       the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable; and

 

(2)       the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

By:       /s/ David DiPetrillo

David DiPetrillo

President (Principal Executive Officer)

Date:       August 20, 2021

 

 

By:       /s/ James Windels

James Windels

Treasurer (Principal Financial Officer)

 

Date:       August 20, 2021

 

 

This certificate is furnished pursuant to the requirements of Form N-CSR and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

 

 

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