Here’s what we get asked most frequently by topic and how we can help.
The MiFID II research unbundling rules prevent in-scope clients from receiving research unless they bear the cost for that research themselves or pay for it from a separate research payment account funded by specific charges to underlying investors. In-scope entities may not continue to pay for research via bundled commissions. Therefore, effective January 3, 2018, J.P. Morgan will be required to restrict access to all research content so that it is only available to out-of-scope clients or in-scope clients that pay for it on an unbundled basis.
The online form should be completed by the person who is responsible for overseeing your access to research. It is important that you register your interest as soon as possible to ensure the least disruption to your research access.
If you have any immediate questions, please do not hesitate to reach out to your representative or email us at MiFID II Research Access.
TRADING TRANSPARENCY & MARKET STRUCTURE
MiFID II defines an SI as an investment firm which, on an organized, frequent, systematic and substantial basis, deals on its own account when executing client orders outside a Regulated Market (RM), Multilateral Trading Facility (MTF), or Organised Trading Facility (OTF) without operating a multilateral system. Firms that are SIs have pre-trade quoting and post-trade reporting requirements under MiFID II. Investment firms have the ability to voluntarily opt in to be an SI from January 3, 2018, ahead of the first mandatory determination date of September 1, 2018.
J.P. Morgan has decided to voluntarily opt-in to become a Systematic Internaliser (SI) for non-equity instruments, including equity derivatives, that are Traded on Trading Venue (TOTV) and will be registered as an SI in the vast majority of equity and equity-like instruments subject to the MiFID II share trading obligation. For this reason, the SI designation will apply to J.P. Morgan Securities plc and JPMorgan Chase Bank N.A., London Branch.
As always, we remain committed to providing liquidity to the market and making prices for our clients. Even as we all work to implement the extensive, new regulation and prepare for its impact on our products and services, we want to ensure that trading with us remains as straightforward as possible.
Our decision to be an SI will shift the obligation of real-time post-trade reporting from our clients to J.P. Morgan, beginning January 3, 2018 in many cases. On a quarterly basis, we will make available to our clients information about the quality of our execution (including information regarding trades where we have provided a quote but have not executed) and, on an annual basis, we will also make available information regarding our top five execution venues.
Yes, the implication of MiFID II for each product group by asset class varies and we have developed more detailed information for F&O, Cash Equities and Custody & Fund Services. Please reach out to your representative or email JPMorgan Regulatory Updates.
CUSTODY & FUND SERVICES
Yes, depending on the services we provide to you, a material number of MiFID II requirements may affect your business with us, especially where the services we provide to you include any trading activities. We are introducing various changes to our existing processes which will impact the service we provide to you, please contact your relationship manager for more detailed information.
IMPACT OUTSIDE OF EEA
MiFID II will have a global impact for a few reasons. First, clients with operations in the EEA will be affected by MiFID II. Second, non-EEA clients may be dealing in instruments traded in European regulated markets or venues, which may be impacted by the new regulation. Finally, if you trade with our EEA entities you will also be impacted.
DOCUMENTATION & REFERENCE DATA
We are amending our contractual terms for our European entities primarily to reflect the requirements of the revised directive and new regulation. This update is mandatory but we do not anticipate that clients would need to negotiate our amendments or that it will involve any fundamental change to our commercial relationship with our clients. Our clients should have already started receiving these updated terms.
Yes. As of January 3, 2018 J.P. Morgan’s EEA entities cannot transact without having a client’s LEI recorded in its systems.
If you already have an LEI but have not yet provided it to us please email JPMorgan Regulatory Updates.
If you have not yet obtained LEIs for all of your in-scope legal entities, you can do so by contacting any LEI issuer in the industry LEI FAQ.
As always, we are committed to making the transition to and after MiFID II as smooth as possible for our clients.
If you have any questions, please do not hesitate to reach out to your J.P. Morgan representative or email JPMorgan Regulatory Updates.
DISCLOSURE OF MINOR NON-MONETARY BENEFITS
This supplement should be read in conjunction with the Terms of Business for investment business conducted by, or any other specific product document for investment business conducted by, J.P. Morgan Securities plc, J.P. Morgan Europe Limited (and any of its branches established in the EEA), JPMorgan Chase Bank, National Association (London Branch, or any other of its branches established in the EEA), J.P. Morgan Limited, J.P. Morgan Markets Limited, J.P. Morgan Bank (Ireland) plc, J.P. Morgan Bank Luxembourg S.A. and J.P. Morgan AG (together J.P. Morgan).
Where you are subject to restrictions under regulatory rules applicable to you on the receipt of fees or commissions or the provision or receipt of non-monetary benefits (other than acceptable minor non-monetary benefits), in both cases to or from third parties, you are responsible for compliance with these requirements and must assess whether any non-monetary benefit we may provide to you is in compliance with the regulatory rules as they apply to you. Accordingly, we provide no assurance that any non-monetary benefit we may provide to you complies with the regulatory rules as they apply to you.
We may provide you with certain acceptable minor non-monetary benefits listed in the relevant EEA member state national implementation of Article 12(3) of Commission Delegated Directive (EU) 2017/593, which may include:
Other minor non-monetary benefits:
Pursuant to the relevant EEA member state national implementation of Article 11(5)(a) of Commission Delegated Directive (EU) 2017/593, certain minor non-monetary benefits that J.P. Morgan may provide or receive, may be described in a generic way and these may include:
This list of examples is non-exhaustive and subject to change.
The jurisdictions where it is possible for a security interest, lien or right of set-off to be created by way of operation of law or regulation are:
For further information on MiFID II, please contact your J.P. Morgan relationship manager or email JPMorgan Regulatory Updates.