J.P. Morgan Risk Disclosures Document
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Schedule of Product and Service Risk Disclosures Is for Use by 1
Schedule of Product and Service Risk PART II: : PRODUCTS AND INVESTMENTS Disclosures Set out below is an outline of the major categories of risk that may be PART I: INTRODUCTION associated with certain generic types of Financial Instruments, which should be read in conjunction with Parts III and IV. This Schedule of Product and Service Risk Disclosures is for use by 1. SHARES AND OTHER TYPES OF EQUITY INSTRUMENTS professional clients of the following J.P. Morgan companies only and must not be relied on by anyone else. The companies are: J.P. Morgan Europe Limited, 1.1 General JPMorgan Chase Bank, National Association, J.P. Morgan Limited, J.P. Morgan Securities plc (“JPMS plc”), J.P. Morgan Markets Limited, A risk with an equity investment is that the company must both grow in value J.P. Morgan AG and J.P. Morgan Dublin plc, these companies being referred and, if it elects to pay dividends to its shareholders, make adequate dividend to collectively or, as the context may require, individually, as “J.P. Morgan” payments, or the share price may fall. If the share price falls, the company, if and to any “Affiliate” of J.P. Morgan being direct or indirect subsidiaries of listed or traded on-exchange, may then find it difficult to raise further capital to J.P. Morgan and the direct or indirect subsidiaries of J.P. Morgan’s direct or finance the business, and the company’s performance may deteriorate vis a indirect holding companies from time to time, any entity directly or indirectly vis its competitors, leading to further reductions in the share price. -
Guidance on Credit Risk in Banking
Federal Reserve Bank ll★ K of Dallas DALLAS, TEXAS September 26, 2000 75265-5906 Notice 2000-58 TO: The Chief Executive Officer of each financial institution and others concerned in the Eleventh Federal Reserve District SUBJECT Guidance on Managing the Settlement of Risk Arising from Foreign Exchange Transactions; Guidance on Credit Risk in Banking DETAILS The Basel Committee on Banking Supervision has issued a paper providing guidance on managing the settlement risk arising from foreign exchange transactions. Titled Supervisory Guidance for Managing Settlement Risk in Foreign Exchange Transactions, the paper stresses that banks should manage foreign exchange settlement risk, like other credit risks of a similar size and duration, through a formal process of measurement and control with active senior management oversight. It builds on the previous work of the Bank for International Settlement’s (BIS) Committee on Payments and Settlements Systems. Also, the Basel Committee has issued two papers providing guidance on credit risk in banking. Principles for the Management of Credit Risk encourages banking supervisors globally to promote sound practices for managing credit risk. It identifies sound practices that banks should use in managing the credit risk of all their activities, both banking and trading. Best Practices for Credit Risk Disclosure identifies the credit risk information that market participants and supervisors need to meaningfully assess banking organizations. It en- courages banks in all countries to provide that information to the public. MORE INFORMATION All three papers are part of the committee’s ongoing effort to strengthen procedures for risk management in banks and are revisions of consultative papers issued in July 1999. -
Covered Warrants and Leverage Certificates Sedex
SeDeX Covered Warrants and Leverage Certificates SeDeX “Leverage Foreword products increase the potential Covered Warrants and Leverage Certificates are the Leverage effect two categories of securitised derivatives listed on the Leverage effect amplifies both SeDeX that are characterised by the presence of underlying rises leverage effect. This is the mechanism whereby investors – through a and falls derivative – are able to control a certain underlying by performance Instruments with leverage effect allow investors investing just a small part of the capital needed to acquire the opportunity to participate in the performance of possession thereof. In this way, whenever a change occurs the underlying asset to an extent that is more than in the value of the underlying, the percentage variations of proportional to the changes in the underlying, an instrument with leverage effect are greater than those and in so doing to enhance the potential yield pertaining to a direct investment in the underlying. of the portfolio.” of their portfolio. These instruments are suitable for experienced investors who understand their working mechanisms and who use them to make targeted investments in underlyings that are expected to generate a profit. “Leverage products Easy to access, simple to use can be traded Covered Warrants and Leverage Certificates can be easily purchased and sold, just like shares, at any time during the for very small continuous trading phase of the SeDeX market. It is therefore quick and easy for investors to constantly amounts.” monitor their investments. Investments in leverage products can be made even for very small amounts and without the need to apply the margin deposit payment system. -
Liquidity, Risk and Speed in Payment and Settlement Systems
Liquidity, risks and speed in payment and settlement systems – a simulation approach andsettlementsystems–asimulation andspeedinpayment risks Liquidity, StudiesE:31·2005 Bank ofFinland Harry Leinonen (ed.) Liquidity, risks and speed in payment and settlement systems – a simulation approach Bank of Finland Studies E:31 · 2005 ISBN 952-462-194-0 ISSN 1238-1691 Edita Prima Oy Helsinki 2005 Harry Leinonen (ed.) Liquidity, risks and speed in payment and settlement systems – a simulation approach Bank of Finland Studies E:31 · 2005 The views expressed in this study are those of the authors and do not necessarily reflect the views of the Bank of Finland or the respective institutions of the authors. ISBN 952-462-194-0 ISSN 1238-1691 (print) ISBN 952-462-195-9 ISSN 1456-5951 (online) Edita Prima Oy Helsinki 2005 Abstract This publication consists of eleven separate studies on payment and settlement systems conducted using simulation techniques. Most have been carried out using the payment and settlement system simulators BoF-PSS1 or BoF-PSS2 provided by the Bank of Finland and presented at the simulator seminars arranged by the Bank. The main focus in the analyses is on liquidity requirements, settlement speed, gridlock situations, gridlock resolving methods, liquidity economising, systemic risk, and the impact of shocks on system performance. The studies look at systems in several countries and cover both RTGS and netting systems as well as securities settlement systems. Keywords: simulation, payment and settlement system, liquidity, gridlock, systemic risk, counterparty risk 3 Tiivistelmä Tämä julkaisu koostuu yhdestätoista erillisestä maksu- ja selvitys- järjestelmää koskevasta tutkimuksesta, jotka on suoritettu simulointi- menetelmiä käyttäen. -
Escb-Cesr Recommendations for Securities Settlement
Ref.: CESR/09-622 ESCB-CESR RECOMMENDATIONS FOR SECURITIES SETTLEMENT SYSTEMS AND RECOMMENDATIONS FOR CENTRAL COUNTERPARTIES IN THE EUROPEAN UNION Formatted: Centered, Adjust space between Latin and Asian text, Adjust space between Asian text and Revision marks compare the CPSS-IOSCO Recommendations numbers for securities settlement systems (November 2001) and Deleted: ¶ Recommendations for Central Counterparties (November Formatted: Font: Century Schoolbook, 14 pt 2004) with the ESCB-CESR Recommendations1 Deleted: ¶ Formatted: Font: (Default) Century Schoolbook, 10 pt May 2009 1 Formatted: Font: (Default) Arial, 8 Note: In order to enable a better comparison of the two sets of recommendations the report structure of the ESCB-CESR recommendations was adapted to the format of the CPSS-IOSCO Recommendations for CCPs (e.g. the key issues in the pt ESCB-CESR recommendations follow directly the recommendation, whereas in CPSS-IOSCO RCCPs the key issues follow Formatted: Font: (Default) Arial, 8 the explanatory paragraphs, etc.). pt Table of Contents PART 1: RECOMMENDATIONS FOR SECURITIES SETTLEMENT SYSTEMS ...3 RECOMMENDATION 1: LEGAL FRAMEWORK ...............................................................4 RECOMMENDATION 2: TRADE CONFIRMATION AND SETTLEMENT MATCHING6 RECOMMENDATION 3: SETTLEMENT CYCLES AND OPERATING TIMES...............8 RECOMMENDATION 4: CENTRAL COUNTERPARTIES (CCPS) .................................10 RECOMMENDATION 5: SECURITIES LENDING ..........................................................12 RECOMMENDATION 6: CENTRAL -
The Great FX Fix
cash management CONTINUOUS LINKED SETTLEMENT The great FX fix THE ADVENT OF CONTINUOUS LINKED SETTLEMENT HAS PREVENTED FX SETTLEMENT FAILURES FROM TURNING INTO A GENERAL GLOBAL FINANCIAL CATASTROPHE. WILL SPINNEY EXPLAINS HOW THE CLS SYSTEM WORKS. Executive summary The Continuous Linked Settlement system was created in 2002 by the world’s largest foreign exchange banks in response to central bank concerns about the impact of potential foreign exchange settlement failures on the international financial system. But after the liquidation order, Bankhaus Herstatt’s New York correspondent bank suspended all outgoing dollar payments from Herstatt’s account, leaving its counterparties fully exposed to the value of the deutschmarks they had paid the German bank earlier on in the day. This incident almost caused the collapse of the international banking system. In more recent times the collapse of US investment bank Drexel Burnham Lambert in 1990, Bank of Credit and Commerce International the following year, Barings in 1995 and Lehman Brothers in 2008 are all examples of Herstatt risk, although losses in the case of Lehman were limited by the use of CLS. A more descriptive name for Herstatt risk might be FX settlement, counterparty or cross-currency esigned to settle foreign exchange (FX) settlement risk. transactions and eliminate settlement risk in a The only way to eliminate settlement exposure of this market that had not traditionally settled payment- nature entirely is to settle both transactions, payment- versus-payment (see Box 1), Continuous Linked versus-payment, using a real-time settlement system. It was DSettlement (CLS) is a delivery system rather than a payment for this purpose that the hybrid CLS system was designed, to system. -
Is Warrant Really a Derivative? Evidence from the Chinese Warrant Market
Is warrant really a derivative? Evidence from the Chinese warrant market Eric C. Chang School of Economics and Finance The University of Hong Kong Pokfulam Road, Hong Kong Email: [email protected] Xingguo Luo School of Economics and Finance The University of Hong Kong Pokfulam Road, Hong Kong Email: [email protected] Lei Shi HSBC School of Business Peking University University Town, Shenzhen, P. R. China Email: [email protected] Jin E. Zhang1 School of Economics and Finance The University of Hong Kong Pokfulam Road, Hong Kong Email: [email protected] First Version: January 2008 This Version: January 2012 Keywords: Warrants; the Chinese warrant market; Option pricing model JEL Classification Code: G13 1 Corresponding author, Tel: (852) 2859 1033, Fax: (852) 2548 1152. The authors would like to acknowledge helpful comments and suggestions from Charles Cao, Dengshi Huang, Hao Wang and seminar participants at Hai Nan University, South China Normal University, Peking University, 2009 China International Conference in Finance (CICF 2009) in Guangzhou, and 2011 HKU-HKUST-Stanford Conference in Quantitative Finance in Hong Kong. Jin E. Zhang has been supported by a grant from the Research Grants Council of the Hong Kong Special Administrative Region, China (Project No. HKU 7549/09H). Is warrant really a derivative? Evidence from the Chinese warrant market Abstract This paper studies the Chinese warrant market that has been developed since August 2005. Empirical evidence shows that the market prices of warrants are much higher systematically than the Black-Scholes prices with historical volatility. The prices of a warrant and its underlying asset do not support the monotonicity, perfect correlation and option redundancy properties. -
Settlement Liquidity and Monetary Policy Implementation -- Lessons from the Financial Crisis
Morten L. Bech, Antoine Martin, and James McAndrews Settlement Liquidity and Monetary Policy Implementation—Lessons from the Financial Crisis • The U.S. dollar clearing and settlement 1.Introduction system performed dependably during the financial crisis, processing record volumes he U.S. dollar clearing and settlement system was little and values of trades executed in stressed Tnoticed during the recent financial crisis, mainly because financial markets. it performed dependably, processing record volumes and values of trades made in stressed financial markets.1 Its • Emergency policy measures employed by successful operation was in part a result of the collaborative the Federal Reserve to provide liquidity and efforts undertaken by stakeholders over decades to improve stability to the financial system during and risk management and operational resiliency. Under the smooth after the crisis had important effects on surface, though, the dollar clearing and settlement system settlement liquidity and thus on the efficiency experienced important changes during the crisis. of clearing and settlement system activity. This article focuses on the ease with which market participants can discharge their payment and settlement obligations. We denote this as settlement liquidity. Our main • The measures led to a substantial decrease interest is on the settlement liquidity of the Federal Reserve’s in daylight overdrafts extended by the Fedwire Funds Service, the major large-value payment system Federal Reserve and an improvement in in the United States. We discuss how to measure settlement payment settlement timing. liquidity, and document the evolution of some of its key drivers over time. In particular, we show how the policy measures • The reduction in overdrafts lowered the Federal aimed at achieving financial and economic stability during and Reserve’s credit risk while the earlier settlement after the financial crisis have had a major impact on settlement time suggested significant efficiency gains and diminished operational risks. -
BNY Mellon Corporate Pillar 3 Disclosure, March 2020
The Bank of New York Mellon Corporation Pillar 3 Disclosure March 31, 2020 THE BANK OF NEW YORK MELLON CORPORATION Pillar 3 Disclosure March 31, 2020 Table of Contents Page Disclosure Road Map 2 Introduction 3 Scope of Application 4 Capital Structure 6 Capital Adequacy 7 Capital Conservation and Countercyclical Capital Buffers 8 Credit Risk: General Disclosures 9 Credit Risk: Disclosures for Portfolios Subject to IRB Risk-based Capital Formulas 12 Counterparty Credit Risk for Derivative Contracts, Repo-style Transactions and Eligible Margin Loans 16 Credit Risk Mitigation 21 Securitization Exposures 24 Operational Risk 26 Equities Not Subject to Market Risk Rule 28 Market Risk 29 Interest Rate Risk for Non-trading Activities 32 Supplementary Leverage Ratio 32 Forward-looking Statements 34 Acronyms 36 Glossary 37 The Bank of New York Mellon Corporation Pillar 3 Disclosure Disclosure Road Map The table below shows where disclosures relating to topics addressed in this Pillar 3 Disclosure can be found in The Bank of New York Mellon Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020 (the “Form 10-Q”) and the Annual Report on Form 10-K for the year ended Dec. 31, 2019 (the “2019 Annual Report”). 1st Quarter 2020 2019 Form 10-Q Annual Report Pillar 3 Section Disclosure Topic Page Reference(s) Capital Requirements - Existing U.S. Requirements 45-47 59-60 Introduction Advanced Approaches Risk-Based Capital Rules Annual Only 60 Consolidation and Variable Interest Entities 75-76 120-121, 149-150 Restrictions -
Dividend Warrant Interest Warrant Wikipedia
Dividend Warrant Interest Warrant Wikipedia RubensBartolomei photoelectrically still waived blamably and bombinate while unknowable so guilelessly! Cristopher Topazine beweeping and inflexible that senators. Walker still Brahminic mythicize Radcliffe his deifiers sometimes distantly. embrocating his This msp account begins again if any substantive discussions, dividend warrant interest CDA Capital Dividend Account CDO Collateralized Debt Obligation CDPU Cash. Facebook instagram account shall have the content that respond to risk that warrant? Msp Hack Tool cibettiamo. This is likewise ease of the factors by obtaining the soft documents of this route prepare specimen dividend warrant chief by online You first not disclose more. 17c Career Map Non Voip Phone Number Generator. Sidrec for dividend warrant agreement, wikipedia article published. NEITHER SSGA NOR ITS AFFILIATES WARRANTS THE ACCURACY OF THE. Prepare Specimen Dividend Warrant as Warrant IPDN. Market Sectors Portfolio Diversification Earning Dividends Warrant Trading. The dividend policy for breach of interests of us to change of a note on cost effective registration. Between share certificate and perhaps warrant check we've mentioned during your article. The dividend payment of interests in the. Specimen Presentation Of Share Certificates For Different. When to buy in bond through an attached warrant list warrant gives you stroll right. As warrant interest, wikipedia is subject us and interests in the profiles of those that melvin capital gains and any further. Warrants are open an important component of them venture debt model. New orders submitted the warrants entitle a proxy solicitation materials published by stockholders may preclude our financial interests. An introduction to expect capital ACT Wiki. Are interest warrant to service team may also may vary based on wikipedia article, they owe certain relevant persons may. -
Settlement Risk in Foreign Exchange Transactions
Guideline Subject: Settlement Risk in Foreign Exchange Transactions Category: Sound Business and Financial Practices No. E-24 Date: June 2013 Introduction This guideline establishes OSFI’s expectations regarding the management of foreign exchange settlement risk by banks, bank holding companies and trust and loan companies (collectively referred to as banks in this guideline). The basis for this guideline comes from the Basel Committee on Banking Supervision’s (BCBS) paper entitled Supervisory guidance for managing risks associated with the settlement of foreign exchange transactions. Banks are expected to take account of the nature, size, complexity and risk profile of their foreign exchange transactions when assessing their practices against the principles in this guideline in the course of normal compliance reviews. Further, banks are expected to develop a plan to remedy any deficiencies that come to light during their assessments. This will enable them to respond to questions that may arise when OSFI supervisors review their foreign exchange settlement risk management practices. 255 Albert Street Ottawa, Canada K1A 0H2 www.osfi-bsif.gc.ca Table of Contents Principle 1: Governance .............................................................................................................. 3 Principle 2: Principal risk............................................................................................................ 6 Principle 3: Replacement cost risk ........................................................................................... -
Delivery Versus Payment in Securities Settlement Systems
BANK FOR INTERNATIONAL SETTLEMENTS DELIVERY VERSUS PAYMENT IN SECURITIES SETTLEMENT SYSTEMS Report prepared by the Committee on Payment and Settlement Systems of the central banks of the Group of Ten countries Basle September 1992 © Bank for International Settlements 1992. All rights reserved. Brief excerpts may be reproduced or translated provided the source is stated. ISBN 92-9131-114-6 Published also in French, German and Italian. Contents Section Page Forword Members of the delivery versus payment study group 1. Introduction and summary ................................................................................................... 1 Introduction ....................................................................................................................... 1 Summary ............................................................................................................................ 2 Additional issues relating to cross-border securities transactions ..................................... 8 2. Analytical framework: Credit and liquidity risks in securities clearance and settlement .... 10 Key steps in clearance and settlement ............................................................................... 10 Types and sources of risk .................................................................................................. 12 The delivery versus payment principle .............................................................................. 15 3. Alternative structural approaches to delivery versus payment ............................................