JPMorgan Chase &Co. plans to exit its government securities settlements business bythe end of 2017, The Wall Street Journalreported. The company is reportedly looking to redeploy capital in avenues thatwould yield a greater margin.
The market for interbank general collateral finance repos dividedin two on July 18, because of a row between JPMorgan, Depository Trust & Clearing Corp. and over technology.That was one of the factors in the company deciding to pull out from the business,the Journal reported, citing people familiarwith the matter.
JPMorgan also weighed selling securities settlements technology,but decided against it, anonymous sources told the publication. However, the companyis not exiting its tri-party repo service, where JPMorgan facilitates trades settlementfor a fee.
The company will be taking away access to the business from 30clients and will not be settling Treasury and agency bonds through its U.S. broker/dealerarm for them, the news outlet reported. The clients include ,Credit Suisse Group AGand HSBC Holdings Plc.BNY Mellon is the only other provider of the said service, so these clients mighthave to reach out to that company for it, according to the news story.