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Message From Sandie O’Connor

Sandie O’Connor,
Global Head,
Prime Services

By now many of you have heard that I am assuming a new role in J.P. Morgan Investment Bank as the head of our Prime Services Unit. I want to take this opportunity to thank you for your business, confidence and trust in our firm over the past four years, during which we have experienced together some truly extraordinary times. During this time, J.P. Morgan has transformed its Securities Lending business to provide you with solutions to your unique and complex needs – from managing risk to enhancing yield to increasing operational efficiencies – by offering access to world markets, strong risk management capabilities and scalable global operations.

While I will miss working with each of you, please know that I am not far away. And I am leaving you in extremely capable hands with Colin McKechnie. Since 2008, when Colin joined our team from the Investment Bank, he has played a major role in helping build our securities lending platform into a global leader with his extensive markets experience, effective management style and keen business insights. It has been a privilege and a pleasure to work with you.

Message From Colin McKechnie

Colin McKechnie ,
Global Head,
Financing & Markets Products

I want to thank Sandie for her leadership of this business since 2006 and I am extremely pleased and privileged to have been given the opportunity to work with you more broadly in my expanded role. On behalf of my entire leadership team, please rest assured that we will continue to uphold the high standards that J.P. Morgan and Sandie have set for serving your current needs and for innovating new market products and integrated solutions for meeting your future ones. I look forward to working with you.

Overview

Global and U.S. domestic regulatory reforms continue to capture great attention. The heightened international scrutiny on trading practices, both real and perceived, are also believed to be contributing to market volatility. Short selling reform in particular has been very much a prime focus. While recent bans and restrictions by governments and regulators are targeted at short-selling (and short sellers specifically) and not securities lending, it is expected that there may be unintended consequences for market participants as a result of these reforms.

The second quarter saw continued concern in the markets over the financial stability of the euro-zone countries, despite the unprecedented emergency bail-out package arranged by the ECB working with the IMF and local governments. We continue to monitor overall exposures in the euro-zone markets and have been navigating the risk through disciplined, conservative investment and lending practices. The focus in Q3 will be on the maturing on the ECB’s 440 billion tender program that was put into place in the summer of 2009.

The developments in the euro-zone have drawn some focus away from the U.S. markets and the Federal Reserve’s monetary policy. We do not believe the Fed will take any drastic actions in the foreseeable future while it monitors further developments in the euro-zone. Additionally, forecasts for this year’s U.S. federal budget deficit have scaled back as improved economic conditions have lead to higher tax receipts which may also give the Fed pause for any actions in Q3.

Beyond the markets, we are proud of our industry leading commitment to transparency, education and communication. And you can look forward to future initiatives that we are working on behalf of our securities lending clients. In the meantime, please continue to reach out to your relationship manager with any needs or suggestions on how we can serve you better.

Again, thank you for your business, confidence and trust.

To view the next article, Regulatory Corner & J.P. Morgan in the News, please click here.

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