J.P. Morgan Worldwide Securities Services tri-party offering for the Chicago Mercantile Exchanges IEF4 program will begin supporting corporate bonds. The enhancement is part of CME Clearings decision to include corporate bonds and and extends the capabilities of J.P. Morgans longstanding support of the CME Clearings IEF4 program.
IEF4 is a specialized collateral program that permits clearing firms to pledge collateral that CME Clearing does not accept directly into an approved tri-party account this now includes corporate bonds. J.P. Morgan manages the collateral as the tri-party agent to the transaction. The collateral may be substituted during the business day as long as the deal amount is maintained.
As custodian and tri-party agent to these transactions, J.P. Morgan prices and administers securities processing services. As an additional change to the IEF4 program, sequestered accounts will also be eligible for the IEF4 program.
We are delighted about the opportunity to deepen our relationship with CME and provide additional support to their clients as demands on collateral increase, said Jason Paltrowitz, Americas market executive for Banks and Broker Dealers at J.P. Morgan Worldwide Securities Services. This expansion of our work with CME reflects just one way in which collateral agency services can readily adapt to evolving market needs, and support clients facing the pressures of new regulation.
(JDC)