JPMorgan launches CustodyConnect; upgrades US bank clearance capabilities

Source: JPMorgan

JPMorgan Worldwide Securities Services today announced the launch of JPMorgan CustodyConnect.

JPMorgan CustodyConnect provides technology and processing services for financial institutions that already offer custody and related services in their local and regional markets, but want to improve and expand their offering and maintain a high level of client service.

Swedbank, the Swedish financial institution, is the first bank to use JPMorgan CustodyConnect.

JPMorgan CustodyConnect enables financial institutions to continue offering custody and related services to their clients while reducing their proprietary investment in infrastructure, such as core custody platforms, global sub-custodian networks and applications.

These institutions can leverage JPMorgan's operational and technical expertise for post-trading services, including trade capture, processing, asset servicing and reporting, while retaining responsibility for sales and marketing, relationship management and client servicing. The modular approach means financial institutions can choose what services they need, while reducing their operational and technology burden.

The clients of JPMorgan CustodyConnect users will have access to JPMorgan Worldwide Securities Services' comprehensive and flexible client-facing technology and processing capabilities, in a smooth transition. JPMorgan Worldwide Securities Services last year spent $600 million on technology.

Mike Clark, CEO of JPMorgan Worldwide Securities Services, said, "JPMorgan CustodyConnect enables financial institutions, such as Swedbank, to better compete with their peers by giving them access to state of the art processing and reporting tools. We look forward to continuing our long-standing relationship with Swedbank by providing them with this forward-thinking service."

Birgitte Bonnesen, Senior Vice President, Swedbank Markets, said, "JPMorgan has been a trusted partner of ours for over seven years. It was therefore a natural step for us to look to JPMorgan when we decided to take steps to re-invent our custody product offeriroduct offering. JPMorgan has responded with a vast amount of global expertise, willingness, and innovative thinking in helping us develop a product offering that will be competitive now and in the future."

Separately, JPMorgan Worldwide Securities Services today announced it has successfully integrated and upgraded its US and international GlobeClear clearance capabilities to improve processing efficiency.

As part of the initiative, JPMorgan has made a multi-million dollar investment in its US Agent Bank Clearing product, to expand its core clearance and custody systems to improve settlement of securities processes through the Depository Trust & Clearing Corporation (DTCC).

This investment allows JPMorgan clients around the world who invest in US securities to benefit from:
  • Segregated participant accounts, eliminating traditional limitations of omnibus account structures.
  • Minimizing delivery fails and their associated financing.
  • Rehypothecation, permitting straight-through processing of all repurchases and loans.
  • Securities Payment Orders, processed automatically to better support the US stock loan business.
  • SWIFT Messaging, which is expanded to improve access to comprehensive information about settlement status and corporate action / income information on rehypothecated positions.

Ed Corral, Clearance and Settlement Business Executive at JPMorgan Worldwide Securities Services, said, "JPMorgan has long been a participant in US domestic off-exchange clearance, and this investment and upgrade enables us to offer what we believe is a new standard for integrated global clearance. As markets continue to become global, the convergence between US and international clearance becomes increasingly important."

The market leader in US Government clearance and settlement, JPMorgan handled 52% of total clearing bank volumes in 2006. In addition to its premier Agent Bank Clearing product, JPMorgan's GlobeClear product facilitates clearance for 20 exchanges and more than 60 OTC markets (including the Federal Reserve and DTCC) through a single access point.

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