J.P. Morgan has integrated the teams responsible for brokering client derivatives and securities trades with those that look after the back office aspects of those trades in response to regulatory reforms.
The consolidation became effective at the end of June.
As early as the end of 2012, the US Dodd-Frank Act could push many OTC transactions into clearinghouses, while Basel III capital rules, which will be implemented at the beginning of 2013, could force firms to begin posting margin upfront on trades.
Before the consolidation, J.P. Morgan Worldwide Securities Services handled securities clearing, but some OTC derivatives or swaps clearing took place within the investment bank, which was already acting as broker on cleared futures and options that were traded on exchanges.
J.P. Morgan's brokerage services for customer trading are now combined with the group that helps clients to source and manage assets that are required to fortify trades under the new rules.
It believes that combining three businesses into one, which it already had in place, will make it more efficient to trade under the new rules. This will benefit existing clients and attract new ones.
Emily Portney, who is already the global head of futures and options within J.P. Morgan’s investment bank, will lead the consolidated business lines in an expanded role that also has her overseeing clearing and collateral management.
