It seems JP Morgan is closing all proprietary trading desks, according to Bloomberg, starting with its commodities unit. Equities and fixed income desks will come later.
From the report:
Closing the prop trading desk for commodities affects fewer than 20 traders, including one in the U.S. and the rest in the U.K., the person said. The unit is based in London, and traders there were given notice on Aug. 27 that their jobs may be in jeopardy as required by U.K. law, according to the person.
About time. The bank first disclosed (internally) its intention to close its prop desks on 4 November 2008. Either the Volcker Rule has forced an end to a serious round of procrastination or such a move just takes longer than anybody realizes.
As Clusterstock notes, other banks are still contemplating what to do about their prop desks. As we wrote in early August, in the aftermath of FinReg they have put their lawyers and risk managers to work searching for creative (sometimes very creative) ways to overcome the rule.
And with respect to JPM specifically, here’s what the Washington Post reported a few weeks ago:
At J.P. Morgan Chase, for example, more than 100 project teams are hard at work trying to anticipate the implications of the new rules and to adjust the firm’s businesses accordingly.
Good thing, too — JP Morgan has a few other problems.
Related links:
JPMorgan Said to End Proprietary Trading to Meet Volcker Rule – Bloomberg
More on overcoming the Volcker Rule – FT Alphaville