JP Morgan Chase 2012 Annual Report Download - page 270

Notes to consolidated financial statements
280 JPMorgan Chase & Co./2012 Annual Report
Note 16 – Variable interest entities
For a further description of JPMorgan Chase’s accounting policies regarding consolidation of VIEs, see Note 1 on pages 193–
194 of this Annual Report.
The following table summarizes the most significant types of Firm-sponsored VIEs by business segment. The Firm considers a
“sponsored” VIE to include any entity where: (1) JPMorgan Chase is the principal beneficiary of the structure; (2) the VIE is
used by JPMorgan Chase to securitize Firm assets; (3) the VIE issues financial instruments with the JPMorgan Chase name; or
(4) the entity is a JPMorgan Chase–administered asset-backed commercial paper conduit.
Line-of-Business Transaction Type Activity Annual Report
page reference
CCB Credit card securitization trusts Securitization of both originated and purchased
credit card receivables 281
Other securitization trusts Securitization of originated automobile and student
loans 281–283
Mortgage securitization trusts Securitization of originated and purchased
residential mortgages
281–283
CIB Mortgage and other securitization trusts Securitization of both originated and purchased
residential and commercial mortgages, automobile
and student loans
281–283
Multi-seller conduits
Investor intermediation activities:
Assist clients in accessing the financial markets in a
cost-efficient manner and structures transactions to
meet investor needs
284–285
Municipal bond vehicles 285–286
Credit-related note and asset swap vehicles 286–288
The Firm’s other business segments are also involved with VIEs, but to a lesser extent, as follows:
• Asset Management: Sponsors and manages certain funds that are deemed VIEs. As asset manager of the funds, AM earns a
fee based on assets managed; the fee varies with each fund’s investment objective and is competitively priced. For fund
entities that qualify as VIEs, AM’s interests are, in certain cases, considered to be significant variable interests that result
in consolidation of the financial results of these entities.
• Commercial Banking: CB makes investments in and provides lending to community development entities that may meet the
definition of a VIE. In addition, CB provides financing and lending related services to certain client-sponsored VIEs. In
general, CB does not control the activities of these entities and does not consolidate these entities.
• Corporate/Private Equity: Corporate uses VIEs to issue trust preferred securities. See Note 21 on pages 297–299 of this
Annual Report for further information. The Private Equity business, within Corporate/Private Equity, may be involved with
entities that are deemed VIEs. However, the Firm’s private equity business is subject to specialized investment company
accounting, which does not require the consolidation of investments, including VIEs.
The Firm also invests in and provides financing and other services to VIEs sponsored by third parties, as described on page 288
of this Note.