JPMorgan’s regulatory cash management group said it will begin offering its Interest Earning Facility 4 (IEF4) collateral management program to members of the Chicago Mercantile Exchange (CME).
The IEF4 program provides additional flexibility beyond IEF3 by offering clearing members free-of-payment collateral movements and flexibility in substituting securities held in their account throughout the business day.
IEF3 and IEF4 are specialized CME collateral programs that use various methods of processing that are most typically associated with tri-party repurchase agreements.
As an independent tri-party agent, JPMorgan facilitates the management of collateral posted or transferred in fulfilling CME margin requirements. Clearing members may deposit and withdraw U.S. Treasury securities or other assets posted as margin collateral, interacting only with JPMorgan.
“In an environment where regulatory compliance is of the utmost importance, we are honored to extend our expertise by assisting CME clearing members in the management of required collateralization,” said Ed Corral, senior vice president and head of JPMorgan’s Clearance and Collateral Management Division, which runs JPMorgan’s Regulatory Cash Collateral Management group.
“With both collateral management and risk management centralized by JPMorgan, we are able to help reduce infrastructure costs associated with managing and monitoring collateral requirements,” Corral added.
JPMorgan’s Clearance and Collateral Management Division is a major player in the management of securities and cash collateral in both the U.S. and Europe.