Common use of Collateral for Loaned Securities Clause in Contracts

Collateral for Loaned Securities. Pursuant to the SLA, in exchange for the Loaned Securities, JPMS will provide you (or, in the alternative, pledge to you in an account maintained by a custodian) with either cash collateral or a form of non-cash collateral permissible under Rule 15c3-3(b)(3)(iii)(B) of the Securities Exchange Act of 1934 and related SEC guidance. Pursuant to the SLA and applicable regulations, JPMS will ▇▇▇▇ the Loaned Securities to market at the close of trading on each business day and, if necessary, will transfer additional collateral no later than the close of business on the next business day so that the market value of the collateral is equal to the market value of the Loaned Securities. If JPMS defaults and the market value of the Loaned Securities increases in value on the day JPMS defaults, the cash collateral provided by JPMS may be insufficient to fully collateralize the Loaned Securities. If JPMS collateralizes the Loaned Securities with securities collateral, the securities collateral will be subject to market risk, and therefore may not be sufficient to replace the full value of Loaned Securities should JPMS default. SHOULD JPMS POST SECURITIES COLLATERAL AS PERMITTED BY APPLICABLE LAW, SOME SECURITIES PROVIDED BY JPMS AS COLLATERAL UNDER THE SLA MAY NOT BE GUARANTEED BY THE UNITED STATES.