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JP Morgan To Cease Proprietary Trading
Global banking giant JP Morgan has apparently decided to close down its proprietary trading operations, sources from within the bank say. According to an unnamed source quoted by Dow Jones, JP Morgan has issued notice to approximately 20 proprietary traders that trade commodities.
JP Morgan has never had a huge focus on proprietary trading, and it’s prop trading desks have tended to be small. Nevertheless those desks have been affected by regulatory reform and in particular the Volcker Rule, which forbids banks from proprietary trading, proprietary investments in hedge funds and private equity.
According to the source, the lender has decided to exit the proprietary trading business altogether, and has given notice to its commodities proprietary trading desk which is based in London, and one of the largest proprietary desks at JP Morgan.
Last year Citigroup divested Phibro, its commodities trading business, which also ran its own proprietary positions.
Other companies including Goldman Sachs are still mulling their options. Goldman in particular has a very large proprietary operation, and is considering a number of options, the most radical of which include transferring them to its asset management business and spinning the entire unit of as a new listed entity.
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