In order to comply with new regulatory mandates, Barclays will be transferring part of its derivatives book to JP Morgan, giving JPM a unique inroad into European markets.
Barclays Plc agreed to transfer a portfolio of derivatives contracts to JPMorgan Chase & Co., as the U.K.’s second-largest bank speeds up the sale of unwanted assets to reduce its capital requirements. The portfolio consists mainly of interest-rate swaps, many of which are backed by collateral that will transfer to JPMorgan, according to a person with knowledge of the terms of the deal. Barclays will contact customers affected by the portfolio transfer this year and will need their consent before they can be moved to JPMorgan, the London-based bank said. JPMorgan, which had more than $37 trillion in notional interest-rate derivatives at the end of September, said it will gain access to additional European trading clients.