JPMorgan Institutional Trust Services today initiated same-day settlement of the first Euro Commercial Paper (ECP) issuance via Euroclear France. J.P. Morgan Securities Ltd. was dealer for ECP issuer Reseau Ferr De France, the owner and the manager of the French railway infrastructure, rated A1+/P1/F1+.
JPMorgan claims to be the first issuing and paying agent to provide automated same-day settlement to the Euro market. According to Ray Morison, a vice president of JPMorgan who serves as chairman of the International Paying Agents Association, “the combination of automated same-day settlement and the European Pre-Issuance Messaging initiative will lay the foundation for straight-through processing for the Euro market.”
Demand for same-day settlement has long been an issue throughout the industry as a whole, but the capability requires a high level of automation. Euroclear France, via its RGV system, responds to this requirement.
The European Pre-Issuance Messaging (EPIM) initiative, sponsored by Euroclear, Clearstream and The Depository Trust & Clearing Corporation (DTCC), will reduce the time needed to obtain an International Securities Identification Number. JPMorgan settled its first ECP issue via the EPIM system on July 22, 2002.
Ultimately, the new service from Morgan aims to provide corporate treasurers with an alternative source of overnight and term liquidity. “Providing same-day settlement puts JPMorgan squarely in the forefront of facilitating fully automated settlement of ECP, which will help promote market growth,” says Samir Pandiri, a senior vice president of JPMorgan. “This initiative demonstrates JPMorgan’s commitment to the global commercial paper market, as well as the firm’s leadership in developing access to new growth markets.”