Clearance & Collateral Management

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Derivatives Collateral Management

Over the Counter (OTC) derivatives trading is bilateral in nature, resulting in counterparty credit exposure. The exchange of collateral, as defined in the Credit Support Annex (CSA) to the ISDA Master Agreement, mitigates this risk.

Many institutions lack the relevant infrastructure or expertise to implement a robust and effective derivatives collateral management program. The high cost of developing a solution internally or buying software is often an impediment to realizing cost efficient credit risk mitigation.

J.P. Morgan delivered the industry’s first full-service OTC Derivatives Collateral Management (“DCM”) solution in August 2005. J.P. Morgan DCM continues to be the market leader for providing an end-to-end post-trade service incorporating CSA management, rehypothecations, automated derivative trade reconciliation, settlement and custody. Our continuing investment in infrastructure enables our clients to focus on their core business.

J.P. Morgan’s suite of award-winning Derivatives Collateral Management products enables clients to take advantage of a more cost effective means of managing their collateral than many in-house alternatives. Implementation is measured in weeks rather than the months usually associated with technology implementations. In addition, clients benefit from J.P. Morgan’s extensive collateral management experience.

Our experienced staff stands ready to offer optimal solutions to clients’ derivatives collateral management challenges, regardless of size and complexity.