JP Morgan’s active tri-party repo clients have successfully completed the transition to three-way trade confirmation as mandated by the Tri-Party Repo Market Infrastructure Reform Task Force.
By value, 99% of all tri-party repos booked daily through JP Morgan are now confirmed by both counterparties.
According to Kelly Mathieson (pictured), Worldwide Securities Services Global Custody and Clearance Executive at JP Morgan: “This milestone reflects the concerted efforts of our whole community. JP Morgan has worked daily with dealers and cash investors in its tri-party repo program to familiarize them with our new tools and procedures and ensure their smooth transition to three-way trade matching in order to meet the Task Force deadline.”
Three-way trade confirmation increases market transparency for cash investors, a key Task Force objective. JP Morgan has developed innovative tools to facilitate trade confirmation, including Repo Access and a Trade Matching Engine that gives cash investors greater control by actively affirming trade instructions. JP Morgan also accepts trade instructions via a variety of different messaging types, including SWIFT, or via other third-party vendor services to accommodate client preferences.
Mathieson notes that JP Morgan has been an integral partner in defining and implementing the new tri-party repo market model put forth by the Task Force, saying: “We continue to devote a significant amount of time, talent and investment to developing the tools and resources to help our clients adjust to market changes.”
Acknowledging that Task Force reforms will continue into 2012, Mathieson says: “In our role as co-chair of the Operational Arrangements Working Group, we continue to be deeply involved as an advocate for our clients and market reforms and are working closely with our clients to communicate and prepare for upcoming milestones.”
Collateral management is a vital risk management tool for institutions seeking to generate additional value from their portfolios while effectively managing their credit risk. JP Morgan’s fixed income clearing and collateral management solution helps clients seamlessly manage their government clearance and tri-party repo financing needs, with automation and technology that integrates these activities to better manage net exposure.