Source: JPMorgan Chase closing proprietary trading desks to comply with new law

Source: JPMorgan Chase halting proprietary trading

BOSTON — JPMorgan Chase & Co. is shutting down its proprietary trading desks and eliminating around 80 jobs to comply with new restrictions on investment banks, a source familiar with the situation said on Tuesday.

The source spoke to The Associated Press on condition of anonymity because JPMorgan Chase isn’t formally announcing the move.

The overhaul of U.S. financial regulations signed into law in July limits proprietary trading in which an investment bank trades on its own accounts for its own profit, rather than on behalf of clients.

The source says JPMorgan Chase is responding by phasing out proprietary desks that trade stocks, bonds and commodities. The desks are in several locations around the globe, including London and New York. Roughly 80 employees out of a total 29,000 staff in JPMorgan Chase’s investment banking operations will lose their jobs.

The plans were reported earlier Tuesday by Bloomberg News.

The move doesn’t affect far-larger operations that execute trades on behalf of clients of JPMorgan Chase, the second-largest U.S. bank ranked by assets.

The investment banking restrictions in the financial overhaul are part of what’s known as the Volcker rule, named after Paul Volcker, a former Federal Reserve chairman who advises the Obama administration. Volcker says banks should stick to taking deposits and making loans. He thinks dealmaking and investment banking should be left to firms that taxpayers wouldn’t have to bail out.