J.P. Morgan |

Thought Spring 2009

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Untitled Document Compliance Reporting Services in
Australia & New Zealand

Compliance reporting has become an essential part of the portfolio risk management process for asset managers, fund sponsors and trustees. Clients must be able to efficiently detect and manage violations of their investment rules, facilitating risk reduction and demonstrating industry best practices.

J.P. Morgan services a large number of sophisticated clients globally, via dedicated regional teams based in the United States, United Kingdom and Australia. These comprise over 6,000 portfolios, representing approximately $2 trillion in assets. Our diverse client list includes corporate and public pensions, investment managers, endowments and foundations, corporate cash, insurers and central banks. In Australia and New Zealand, we service over 500 superannuation and asset manager portfolios.

Compliance Reporting Services
We offer clients a flexible service delivery model that enables our Compliance Reporting Services to be customized to meet their specific requirements regarding the scope of reporting, timeliness of report production and J.P. Morgan’s involvement within the breach investigation and resolution process.

To provide greater access to reporting, and a tool for recording and storing breach investigations, we worked closely with our clients in Australia and New Zealand to move their reporting onto our online Compliance Breach Register, which is delivered through the JPMorgan ACCESSSM portal.

The Compliance Breach Register’s features include:
• Automatic creation of breach records when a warning or violation limit is exceeded.
• Enables clients to update breach records with the results of their investigation.
• Comprehensive management reporting capability, including viewing historical and
non-exception-based (passed) reports.
• My Allocation view showing all open records assigned to a user.

We have also developed an automated e-mail notification service which alerts users on a daily basis about existing and new breach records that require attention.

Breach Review
In addition to our standard Compliance Reporting Services delivery model, which includes online exception-based compliance reports, our staff can provide a thorough breach review as an extended service.

Our compliance staff reviews all of the exception reports triggered by the client’s compliance parameters, and within the online Compliance Breach Register recommends a course of action to be taken by the client.

Enhanced Reporting
We are constantly looking for opportunities to better serve our clients’ needs and enhance our reporting capabilities. Recent developments have included our ability to provide reporting on:

• Shareholder Ownership Limits: Calculation of the percentage of voting rights   ownership across share classes of assets to assist with the requirements of local   beneficial ownership rules.
• Securities Lending Compliance: The ability to independently report on securities   lending cash collateral and loan positions.
  This service is available for clients using J.P. Morgan’s Securities Lending services.
• Socially Responsible Investing: The addition of over 275 data elements relating to   environmental, social and governance (ESG) and socially responsible investing (SRI)   screening of portfolios. This enhancement enables our clients to identify companies with   whom they should consider engaging with to discuss ESG issues, as opposed to   companies they should automatically exclude from their portfolios.

Regulators and investors are demanding greater transparency and accountability from asset managers, fund sponsors and trustees in ensuring they have appropriate risk management and compliance monitoring systems, controls and processes. Our commitment to ongoing product development and innovation for the market-leading Compliance Reporting Services continues to ensure we are well placed to assist our clients at a time when there is increased market risk and volatility.