The post-crisis environment has not been easy for custodians – clients have demanded increased transparency and reporting while using more esoteric instruments. Regulators have cast a heavy shadow and fees have been under increased scrutiny, but JP Morgan has adapted to this new environment with skill. It has continued to build its business despite these difficult conditions.
This year, it bought Schroders Private Equity Services, which extended its private equity custody services and provided the ability to service a wider range of fund strategies as well as a number of new jurisdictions, including Guernsey.
In 2010, the group has seen its prime brokerage custody integration, which enables clients requiring the services of a custodian and a prime broker to keep their long positions with JP Morgan and their short positions at the prime broker. This has enhanced the group’s flexibility to its clients.
The group has also extended its expertise in alternatives this year, such as through the improved Options Clearing Corporation Symbology and futures and options automation. At the same time, its new long and short programme has enabled it to support negative positions, communicate shorts to the market, process inbound cover transactions and provide asset servicing of repurchase agreements, reverse repurchase agreements and short positions. It has also developed a series of new online tools, integrated into its core custody product to support funds processing from order placement to final settlement.
JP Morgan is in the middle of a multi-year programme of technology and process change across its trades, cash and asset-servicing departments. The aim is to create an end-to-end processing model for both global and local custody, and it has made several steps towards that goal this year, for example, with global passbook servicing and processing.
The group now has an impressive roster of clients across Europe, including a number of sovereign wealth funds. Clients have said they like the group’s ability to deal with complexity and its efficiency of implementation. JP Morgan has proved itself adept at supporting the ambitions of its clients.
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