UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K Annual report pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 JPMorgan Chase & Co. (Exact name of registrant as specified in its charter) Registrants telephone number, including area code: (212) 270-6000 Securities registered pursuant to Section 12(b) of the Act: Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yes  No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes o No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ( 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act. Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes  No The aggregate market value of JPMorgan Chase & Co. common stock held by non-affiliates as of June 30, 2013 : $197,931,024,385 Number of shares of common stock outstanding as of January 31, 2014 : 3,786,825,346 Documents incorporated by reference: Portions of the registrants Proxy Statement for the annual meeting of stockholders to be held on May 20, 2014 , are incorporated by reference in this Form 10-K in response to Items 10, 11, 12, 13 and 14 of Part III. Form 10-K Index Part I ITEM 1: BUSINESS Overview JPMorgan Chase & Co. ( JPMorgan Chase  or the Firm), a financial holding company incorporated under Delaware law in 1968, is a leading global financial services firm and one of the largest banking institutions in the United States of America (U.S. or United States), with operations worldwide; the Firm had $2.4 trillion in assets and $211.2 billion in stockholders equity as of December 31, 2013 . The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, asset management and private equity. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S. and many of the worlds most prominent corporate, institutional and government clients. JPMorgan Chase s principal bank subsidiaries are JPMorgan Chase Bank, National Association ( JPMorgan Chase Bank, N.A. ), a national bank with U.S. branches in 23 states, and Chase Bank USA, National Association (Chase Bank USA, N.A.), a national bank that is the Firms credit cardissuing bank. JPMorgan Chase s principal nonbank subsidiary is J.P. Morgan Securities LLC (JPMorgan Securities), the Firms U.S. investment banking firm. The bank and nonbank subsidiaries of JPMorgan Chase operate nationally as well as through overseas branches and subsidiaries, representative offices and subsidiary foreign banks. One of the Firms principal operating subsidiaries in the United Kingdom (U.K.) is J.P. Morgan Securities plc (formerly J.P. Morgan Securities Ltd.), a wholly owned subsidiary of JPMorgan Chase Bank, N.A. The Firms website is www.jpmorganchase.com. JPMorgan Chase makes available free of charge, through its website, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after it electronically files such material with, or furnishes such material to, the U.S. Securities and Exchange Commission (the SEC). The Firm has adopted, and posted on its website, a Code of Ethics for its Chairman and Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and other finance professionals of the Firm. Business segments JPMorgan Chases activities are organized, for management reporting purposes, into four major reportable business segments, as well as a Corporate/Private Equity segment. The Firms consumer business is the Consumer & Community Banking segment. The Corporate & Investment Bank, Commercial Banking, and Asset Management segments comprise the Firms wholesale businesses. A description of the Firms business segments and the products and services they provide to their respective client bases is provided in the Business segment results section of Managements discussion and analysis of financial condition and results of operations (MD&A), beginning on page 64 and in Note 33 on pages 334337 . Competition JPMorgan Chase and its subsidiaries and affiliates operate in a highly competitive environment. Competitors include other banks, brokerage firms, investment banking companies, merchant banks, hedge funds, commodity trading companies, private equity firms, insurance companies, mutual fund companies, investment managers, credit card companies, mortgage banking companies, trust companies, securities processing companies, automobile financing companies, leasing companies, e-commerce and other Internet-based companies, and a variety of other financial services and advisory companies. JPMorgan Chase s businesses generally compete on the basis of the quality and range of their products and services, transaction execution, innovation and price. Competition also varies based on the types of clients, customers, industries and geographies served. With respect to some of its geographies and products, JPMorgan Chase competes globally; with respect to others, the Firm competes on a regional basis. The Firms ability to compete also depends on its ability to attract and retain professional and other personnel, and on its reputation. The financial services industry has experienced consolidation and convergence in recent years, as financial institutions involved in a broad range of financial products and services have merged and, in some cases, failed. This is expected to continue. Cons olidation could result in competitors of JPMorgan Chase gaining greater capital and other resources, such as a broader range of products and services and geographic diversity. It is likely that competition will become even more inten se as the Firms businesses continue to compete with other financial institutions that may have a stronger local presence in certain geographies or that operate under different rules and regulatory regimes than the Firm. Supervision and regulation The Firm is subject to regulation under state and federal laws in the United States, as well as the applicable laws of each of the various jurisdictions outside the United States in which the Firm does business. Regulatory reform : On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), which is intended to make significant structural reforms to the financial services industry. The Dodd-Frank Act instructs U.S. federal banking and other regulatory agencies to conduct approximately 285 rule-makings and 130 studies and reports. These regulatory agencies include the Commodity Futures Trading Commission (the CFTC); the Securities and Exchange Commission (the SEC); the Board of Governors of the Federal Reserve System (the Federal Part I Reserve); the Office of the Comptroller of the Currency (the OCC); the Federal Deposit Insurance Corporation (the FDIC); the Bureau of Consumer Financial Protection (the CFPB); and the Financial Stability Oversight Council (the FSOC). As a result of the Dodd-Frank Act rule-making and other regulatory reforms, the Firm is currently experiencing a period of unprecedented change in regulation and such changes could have a significant impact on how the Firm conducts business. The Firm continues to work diligently in assessing and understanding the implications of the regulatory changes it is facing, and is devoting substantial resources to implementing all the new regulations, while, at the same time, best meeting the needs and expectations of its clients. Given the current status of the regulatory developments, the Firm cannot currently quantify the possible effects on its business and operations of all of the significant changes that are currently underway. For more information, see Risk Factors on pages 918 . Certain of these changes include the following: 
central clearing of standardized over-the-counter derivatives and the requirement that they be traded on regulated trading platforms) and heightened supervision. Further, some of the rules for derivatives apply extraterritorially to U.S. firms doing business with clients outside of the United States. In addition, commencing July 2015, certain derivatives transactions now executed by JPMorgan Chase Bank, N.A., will be required to be executed through subsidiaries or affiliates of JPMorgan Chase Bank, N.A. The effect of these rules issued under the Dodd-Frank Act will necessitate banking entities, such as the Firm, to significantly restructure their derivatives businesses, including by changing the legal entities through which their derivatives activities are conducted. In the European Union (the EU), the implementation of the European Market Infrastructure Regulation (EMIR) and the revision of the Markets in Financial Instruments Directive (MiFID II) will result in comparable, but not identical, changes to the European regulatory regime for derivatives. The combined effect of the U.S. and EU requirements, and the conflicts between them, present challenges and risks to the structure and operating model of the Firms derivatives businesses. 
certain shareholders. On June 5, 2013, the SEC approved the publication of proposed structural reforms of money market funds. The proposal considered two reform alternatives that could be adopted either alone or in combination: (i) requiring prime and tax-exempt institutional money market funds to float their net asset values or (ii) requiring all non-governmental money market funds to impose liquidity fees of up to 2% and to have the option to temporarily suspend redemptions (or gate the money market fund) upon the occurrence of specified events indicating that the fund may be under stress. It is currently anticipated that the SEC will adopt final structural reforms in 2014. The Financial Stability Board (the FSB) has endorsed and published for public consultation 15 policy recommendations proposed by the International Organization of Securities Commissions, including requiring money market funds to adopt a floating net asset value. In addition, in September 2013 the European Commission (the EC) released a proposal for a new regulation on money market funds in the EU. The EC proposed two options for stable net asset value money market funds: either (i) maintain a capital buffer of at least three percent of assets under management or (ii) float the net asset value of the money market fund. The EC proposal is currently being reviewed by the European Parliament and the Council of Member States as co-legislators, and is expected to be approved in 2014. For further information on international regulatory initiatives, see Significant international regulatory initiatives on pages 89 . 
bank subsidiaries pay annually to the FDIC. For more information, see Deposit insurance on page 6 . 
Systemically important financial institutions : The Dodd-Frank Act creates a structure to regulate systemically important financial institutions, and subjects them to heightened prudential standards, including heightened capital, leverage, liquidity, risk management, resolution plan, single-counterparty credit limits and early remediation requirements. JPMorgan Chase is considered a systemically important financial institution. On December 20, 2011, the Federal Reserve issued proposed rules to implement certain of the heightened prudential standards. Permissible business activities : JPMorgan Chase elected to become a financial holding company as of March 13, 2000, pursuant to the provisions of the Gramm-Leach-Bliley Act. If a financial holding company or any depository institution controlled by a financial holding company ceases to meet certain capital or management standards, the Federal Reserve may, pursuant to its bank supervisory authority, impose corrective capital and/or managerial requirements on the financial holding company and place limitations on its ability to conduct the broader financial activities permissible for financial holding companies. In addition, the Federal Reserve may require divestiture of the holding companys depository institutions if the deficiencies persist. Federal regulations also provide that if any depository institution controlled by a financial holding company fails to maintain a satisfactory rating under the Community Part I Reinvestment Act (the CRA), the Federal Reserve must prohibit the financial holding company and its subsidiaries from engaging in any additional activities other than those permissible for bank holding companies that are not financial holding companies. The Federal Reserve has proposed rules under which the Federal Reserve could impose restrictions on systemically important financial institutions that are experiencing financial weakness, which restrictions could include limits on acquisitions, among other things. For more information on the restrictions, see Prompt corrective action and early remediation on page 6 . Financial holding companies and bank holding companies are required to obtain the approval of the Federal Reserve before they may acquire more than 5% of the voting shares of an unaffiliated bank. Pursuant to the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the Riegle-Neal Act), the Federal Reserve may approve an application for such an acquisition without regard to whether the transaction is prohibited under the law of any state, provided that the acquiring bank holding company, before or after the acquisition, does not control more than 10% of the total amount of deposits of insured depository institutions in the United States or more than 30% (or such greater or lesser amounts as permitted under state law) of the total deposits of insured depository institutions in the state in which the acquired bank has its home office or a branch. In addition, the Dodd-Frank Act restricts acquisitions by financial companies if, as a result of the acquisition, the total liabilities of the financial company would exceed 10% of the total liabilities of all financial companies. For non-U.S. financial companies, liabilities are calculated using only the risk-weighted assets of their U.S. operations. U.S. financial companies must include all of their risk-weighted assets (including assets held overseas). This could have the effect of allowing a non-U.S. financial company to grow to hold significantly more than 10% of the U.S. market without exceeding the concentration limit. Under the Dodd-Frank Act, the Firm must provide written notice to the Federal Reserve prior to acquiring direct or indirect ownership or control of any voting shares of any company with over $10 billion in assets that is engaged in financial in nature activities. Dividend restrictions : Federal law imposes limitations on the payment of dividends by national banks. Dividends payable by JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A., as national bank subsidiaries of JPMorgan Chase, are limited to the lesser of the amounts calculated under a recent earnings test and an undivided profits test. Under the recent earnings test, a dividend may not be paid if the total of all dividends declared by a bank in any calendar year is in excess of the current years net income combined with the retained net income of the two preceding years, unless the national bank obtains the approval of the OCC. Under the undivided profits test, a dividend may not be paid in excess of a banks undivided profits. See Note 27 on page 316 for the amount of dividends that the Firms principal bank subsidiaries could pay, at January 1, 2014, to their respective bank holding companies without the approval of their banking regulators. In addition to the dividend restrictions described above, the OCC, the Federal Reserve and the FDIC have authority to prohibit or limit the payment of dividends by the banking organizations they supervise, including JPMorgan Chase and its bank and bank holding company subsidiaries, if, in the banking regulators opinion, payment of a dividend would constitute an unsafe or unsound practice in light of the financial condition of the banking organization. Under proposed rules issued by the Federal Reserve, dividends are restricted once any one of three risk-based capital ratios (tier 1 common, tier 1 capital, or total capital) falls below their respective minimum capital ratio requirement (inclusive of the GSIB surcharge) plus 2.5%. Moreover, the Federal Reserve has issued rules requiring bank holding companies, such as JPMorgan Chase, to submit to the Federal Reserve a capital plan on an annual basis and receive a notice of non-objection from the Federal Reserve before taking capital actions, such as paying dividends, implementing common equity repurchase programs or redeeming or repurchasing capital instruments. For more information, see CCAR and stress testing on pages 56 . Capital requirements : Federal banking regulators have adopted risk-based capital and leverage guidelines that require the Firms capital-to-assets ratios to meet certain minimum standards. The risk-based capital ratio is determined by allocating assets and specified off-balance sheet financial instruments into risk-weighted categories, with higher levels of capital being required for the categories perceived as representing greater risk. Under the guidelines, capital is divided into two tiers: Tier 1 capital and Tier 2 capital. The amount of Tier 2 capital may not exceed the amount of Tier 1 capital. Total capital is the sum of Tier 1 capital and Tier 2 capital. Under the guidelines, banking organizations are required to maintain a total capital ratio (total capital to risk-weighted assets) of 8% and a Tier 1 capital ratio of 4%. The federal banking regulators also have established minimum leverage ratio guidelines. The leverage ratio is defined as Tier 1 capital divided by adjusted average total assets. The minimum leverage ratio is 4% for bank holding companies. Bank holding companies may be expected to maintain ratios well above the minimum levels, depending upon their particular condition, risk profile and growth plans. The minimum risk-based capital requirements adopted by the federal banking agencies follow the Capital Accord of the Basel Committee on Banking Supervision (Basel I). In 2004, the Basel Committee published a revision to the Accord (Basel II). The goal of the Basel II Framework is to provide more risk-sensitive regulatory capital calculations and promote enhanced risk management practices among large, internationally active banking operations. In December 2010, the Basel Committee finalized further revisions to the Accord (Basel III) which narrowed the definition of capital, increased capital requirements for specific exposures, introduced short-term liquidity coverage and term funding standards, and established an international leverage ratio. In June 2011, the U.S. federal banking agencies issued rules to establish a permanent Basel I floor under Basel II/Basel III calculations. In October 2013, U.S. federal banking agencies published the interim final rules implementing Basel III in the U.S. The interim final rules narrowed the definition of capital, increased capital requirements for certain exposures, set higher capital ratio requirements and minimum floors with respect to the capital ratio requirements and included a supplementary leverage ratio. U.S. banking regulators and the Basel Committee have, in addition, proposed changes to the leverage ratios applicable to the Firm and its bank subsidiaries. In connection with the U.S. Governments Supervisory Capital Assessment Program in 2009, U.S. banking regulators developed an additional measure of capital, Tier 1 common, which is defined as Tier 1 capital less elements of Tier 1 capital not in the form of common equity  such as perpetual preferred stock, non-controlling interests in subsidiaries and trust preferred capital debt securities. Tier 1 common, a non-GAAP financial measure, is used by banking regulators, investors and analysts to assess and compare the quality and composition of the Firms capital with the capital of other financial services companies. The Firm uses Tier 1 common along with the other capital measures to assess and monitor its capital position.In June 2012, the U.S. banking regulators revised, effective January 1, 2013, certain capital requirements for trading positions and securitizations (Basel 2.5). GSIBs will be required to maintain additional capital, above the Basel III Tier 1 common equity minimum, in amounts ranging from 1% to 2.5%, depending upon the banks systemic importance. In November 2012, the FSB indicated that the Firm would be in the category subject to a 2.5% capital surcharge. Furthermore, in order to provide a disincentive for banks facing the highest required level of Tier 1 common equity to increase materially their global systemic importance in the future, an additional 1% charge could be applied. Currently, no GSIB is required to hold more than the additional 2.5% of Tier 1 common. The Federal Reserve has issued a proposed rule-making that incorporates the concept of a capital surcharge for GSIBs. The Basel III revisions governing the capital requirements are subject to prolonged observation and transition periods. The phase-in period for banks to meet the revised Tier 1 common equity requirement begins in 2015, with implementation on January 1, 2019. The additional capital requirements for GSIBs will be phased-in starting January 1, 2016, with full implementation on January 1, 2019. The Basel III rule also includes a requirement for advanced approach banking organizations, including the Firm, to calculate a supplementary leverage ratio (SLR). The SLR, a non-GAAP measure, is Tier 1 capital under Basel III divided by the Firms total leverage exposure. Total leverage exposure is calculated by taking the Firms total average on-balance sheet assets, less amounts permitted to be deducted for Tier 1 capital, and adding certain off-balance sheet exposures, such as undrawn commitments and derivatives future exposure. Following approval of the final Basel III rules, the U.S. banking agencies issued proposed rulemaking relating to SLR that would require U.S. bank holding companies, including the Firm, to have a minimum SLR of at least 5%. Insured depository institutions, including JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A., are required to have a minimum SLR of at least 6%. In addition, the Basel Committee has proposed further refinements to the computation of the SLR. In addition to capital requirements, the Basel Committee has also proposed two new measures of liquidity risk: the liquidity coverage ratio and the net stable funding ratio, which are intended to measure, over different time spans, the liquidity of the Firm. The observation periods for both these standards began in 2011, with implementation commencing in 2015 and 2018, respectively. On October 24, 2013, the U.S. banking regulators released a proposal to implement a quantitative liquidity requirement consistent with, but more conservative than, the Basel III liquidity coverage ratio (LCR) for large banks. It also provides for an accelerated transition period compared to what is currently required under the Basel III LCR rules. The Firm believes that it was in compliance with this new U.S. proposal related to LCR at December 31, 2013. The Dodd-Frank Act prohibits the use of external credit ratings in federal regulations. In June 2012, the Federal Reserve, OCC and FDIC issued final rules implementing ratings alternatives for the computation of risk-based capital for market risk exposures, which will result in significantly higher capital requirements for many securitization exposures. For additional information regarding the Firms regulatory capital, see Regulatory capital on pages 161165 . Risk reporting: In January 2013, the Basel Committee issued new regulations relating to risk aggregation and reporting. Under these regulations, the banks risk governance framework must encompass risk-data aggregation and reporting, and data aggregation must be highly automated and allow for minimal manual intervention. The regulations also impose higher standards for the accuracy, comprehensiveness, granularity and timely distribution of data reporting, and call for regular supervisory review of bank risk aggregation and reporting. GSIBs will be required to comply with these new standards by January 1, 2016. CCAR and stress testing: In December 2011, the Federal Reserve issued final rules regarding the submission of capital plans by bank holding companies with total assets of $50 billion or more. Pursuant to these rules, the Federal Reserve requires the Firm to submit a capital plan on an Part I annual basis. In October 2012, the Federal Reserve issued rules requiring bank holding companies with over $50 billion in total assets to perform an annual stress test and report the results to the Federal Reserve in January. The results of the annual stress test will also be publicly disclosed, and will be used as a factor in determining whether the Federal Reserve will or will not object to the bank holding companys capital plan. On January 6, 2014, the Firm submitted its capital plan to the Federal Reserve under the Federal Reserves 2014 CCAR process. The Firm expects to receive the Federal Reserves final response to its plan no later than March 14, 2014. In reviewing the capital plan, the Federal Reserve will consider both quantitative and qualitative factors. Qualitative assessments will include, among other things, the comprehensiveness of the plan, the assumptions and analyses underlying the Firms capital plan, and any relevant supervisory information. If the Federal Reserve objects to the Firms capital plan, the Firm will be unable to make any capital distributions unless approved by the Federal Reserve. Bank holding companies must perform an additional stress test in the middle of the year and publicly disclose those results as well. The OCC issued similar regulations that require national banks with over $10 billion in total assets to perform annual stress tests. Accordingly, the Firm submits separate stress tests to the OCC for its national bank subsidiaries that exceed that threshold. Heightened Expectations: In January 2014, the OCC issued proposed rules and guidelines establishing heightened standards for large banks. The proposed guidelines set forth standards for the design and implementation of the banks risk governance framework, and minimum standards for oversight of that framework by the board of directors. The proposed guidelines are an extension of the OCCs heightened expectations for large banks developed after the financial crisis. The heightened standards are intended to protect the safety and soundness of the bank. The bank may use certain components of the parent companys risk governance framework, but the framework must ensure the banks risk profile is easily distinguished and separate from parent for risk management purposes. Under the proposed guidelines, the board is required to have two members who are independent of the bank and parent company management. The board is responsible for ensuring the risk governance framework meets the standards in the OCCs guidelines, providing active oversight and credible challenge to managements recommendations and decisions, and ensuring that the parent company decisions do not jeopardize the safety and soundness of the bank. Prompt corrective action and early remediation : The Federal Deposit Insurance Corporation Improvement Act of 1991 requires the relevant federal banking regulator to take prompt corrective action with respect to a depository institution if that institution does not meet certain capital adequacy standards. While these regulations apply only to banks, such as JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A., the Federal Reserve is authorized to take appropriate action against the parent bank holding company, such as JPMorgan Chase & Co., based on the undercapitalized status of any bank subsidiary. In certain instances, the bank holding company would be required to guarantee the performance of the capital restoration plan for its undercapitalized subsidiary. In addition, in December 2011, the Federal Reserve issued proposed rules which provide for early remediation of systemically important financial companies that experience financial weakness. These proposed restrictions could include limits on capital distributions, acquisitions, and requirements to raise additional capital. Deposit Insurance : The FDIC deposit insurance fund provides insurance coverage for certain deposits, which is funded through assessments on banks, such as JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A. Higher levels of bank failures during the financial crisis dramatically increased resolution costs of the FDIC. In addition, the amount of FDIC insurance coverage for insured deposits has been increased from $100,000 per depositor to $250,000 per depositor. In light of the increased stress on the deposit insurance fund caused by these developments, and in order to maintain a strong funding position and restore the reserve ratios of the deposit insurance fund, the FDIC has increased assessment rates of insured institutions generally. As required by the Dodd-Frank Act, the FDIC issued a final rule in February 2011 that changes the assessment base from insured deposits to average consolidated total assets less average tangible equity, and changes the assessment rate calculation. These changes became effective on April 1, 2011, and resulted in a substantial increase in the assessments that the Firms bank subsidiaries pay annually to the FDIC. Powers of the FDIC upon insolvency of the Firm or its insured depository institution subsidiaries : Upon the insolvency of an insured depository institution, such as JPMorgan Chase Bank, N.A., the FDIC may be appointed the conservator or receiver under the FDIA. Under the Dodd-Frank Act, where a systemically important financial institution, such as JPMorgan Chase & Co., is in default or danger of default, the FDIC may be appointed receiver in order to conduct an orderly liquidation. In both cases, the FDIC has broad powers to transfer any assets and liabilities without the approval of the institutions creditors. Depositor preference: Under federal law, the claims of a receiver of an insured depository institution for administrative expense and the claims of holders of U.S. deposit liabilities (including the FDIC) have priority over the claims of other unsecured creditors of the institution, including public noteholders and depositors in non-U.S. offices. As a result, such persons could receive substantially less than the depositors in U.S. offices of the depository institution. The U.K. Prudential Regulation Authority (the PRA) has issued a proposal that may require the Firm to either obtain equal treatment for U.K. depositors or subsidiarize in the U.K. In September 2013, the FDIC issued a final rule, which clarifies that foreign deposits are considered deposits under the FDIA only if they are also payable in the United States. Cross-guarantee: An FDIC-insured depository institution can be held liable for any loss incurred or expected to be incurred by the FDIC in connection with another FDIC-insured institution under common control with such institution being in default or in danger of default (commonly referred to as cross-guarantee liability). An FDIC cross-guarantee claim against a depository institution is generally superior in right of payment to claims of the holding company and its affiliates against such depository institution. The Bank Secrecy Act : The Bank Secrecy Act (BSA) requires all financial institutions, including banks and securities broker-dealers, to, among other things, establish a risk-based system of internal controls reasonably designed to prevent money laundering and the financing of terrorism. The BSA includes a variety of record-keeping and reporting requirements (such as cash and suspicious activity reporting), as well as due diligence/know-your-customer documentation requirements. The Firm has established a global anti-money laundering program in order to comply with BSA requirements. Regulation by Federal Reserve : The Federal Reserve acts as an umbrella regulator and certain of JPMorgan Chases subsidiaries are regulated directly by additional authorities based on the particular activities of those subsidiaries. For example, JPMorgan Chase Bank, N.A., and Chase Bank USA, N.A., are regulated by the OCC. See Other supervision and regulation on pages 78 for a further description of the regulatory supervision to which the Firms subsidiaries are subject. Holding company as source of strength for bank subsidiaries : JPMorgan Chase & Co. is required to serve as a source of financial strength for its depository institution subsidiaries and to commit resources to support those subsidiaries. Restrictions on transactions with affiliates : The bank subsidiaries of JPMorgan Chase are subject to certain restrictions imposed by federal law on extensions of credit to, and certain other transactions with, the Firm and certain other affiliates, and on investments in stock or securities of JPMorgan Chase and those affiliates. These restrictions prevent JPMorgan Chase and other affiliates from borrowing from a bank subsidiary unless the loans are secured in specified amounts and are subject to certain other limits. For more information, see Note 27 on page 316 . Effective in 2012, the Dodd-Frank Act extended such restrictions to derivatives and securities lending transactions. In addition, the Dodd-Frank Acts Volcker Rule imposes similar restrictions on transactions between banking entities, such as JPMorgan Chase and its subsidiaries, and hedge funds or private equity funds for which the banking entity serves as the investment manager, investment advisor or sponsor. CFPB and other consumer regulations : The activities of JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A. as consumer lenders also are subject to regulation under various U.S. federal laws, including the Truth-in-Lending, Equal Credit Opportunity, Fair Credit Reporting, Fair Debt Collection Practice, Electronic Funds Transfer and CARD acts, as well as various state laws. These statutes impose requirements on consumer loan origination and collection practices. The CFPB issued final regulations regarding mortgages, which became effective January 10, 2014, and which will prohibit mortgage servicers from beginning foreclosure proceedings until a mortgage loan is 120 days delinquent. During this period, the borrower may apply for a loan modification or other option and the servicer cannot begin foreclosure until the application has been addressed. The CFPB issued another final regulation which became effective January 10, 2014, imposing an ability to repay requirement for residential mortgage loans. A creditor (or its assignee) will be liable to the borrower for damages if the creditor fails to make a good faith and reasonable determination of a borrowers reasonable ability to repay as of consummation. Borrowers can sue the creditor or assignee for up to three years after closing, and can raise an ability to repay claim against the servicer as a set off at any point during the loans life if in foreclosure. A Qualified Mortgage as defined in the regulation is generally protected from such suits. On April 22, 2013, the OCC issued guidance regarding the obligation of servicers to track loans scheduled for foreclosure sale within 60 days and to confirm certain information prior to proceeding with the scheduled sale. The Firm has adopted procedures designed to effect compliance with this guidance. On March 21, 2013, the CFPB issued a bulletin regarding Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act, in which it declared that a purchaser of automobile loans (indirect lender) from automobile dealers may be liable for Equal Credit Opportunity Act violations based on dealer specific and portfolio wide disparities, on a prohibited basis, that result from allowing dealers to mark up the interest rate offered to consumers by indirect lenders and allowing the dealers a share of the increased revenue. The bulletin imposes significant dealer education and monitoring requirements on these indirect lenders if they continue allowing discretionary dealer mark-ups. Alternatively, the bulletin indicates that a flat fee arrangement would be acceptable. The Firm has adopted a dealer education and monitoring program to address the concerns raised in the bulletin. Other supervision and regulation : The Firms banks and certain of its nonbank subsidiaries are subject to direct supervision and regulation by various other federal and state authorities (some of which are considered functional regulators under the Gramm-Leach-Bliley Act). JPMorgan Chases national bank subsidiaries, such as JPMorgan Chase Bank, N.A., and Chase Bank USA, N.A., are subject to Part I supervision and regulation by the OCC and, in certain matters, by the Federal Reserve and the FDIC. Supervision and regulation by the responsible regulatory agency generally includes comprehensive annual reviews of all major aspects of the relevant banks business and condition, stress tests of banks and imposition of periodic reporting requirements and limitations on investments, among other powers. The Firm conducts securities underwriting, dealing and brokerage activities in the United States through J.P. Morgan Securities LLC and other broker-dealer subsidiaries, all of which are subject to regulations of the SEC, the Financial Industry Regulatory Authority and the New York Stock Exchange, among others. The Firm conducts similar securities activities outside the United States subject to local regulatory requirements. In the United Kingdom, those activities are conducted by J.P. Morgan Securities plc, which is regulated by the PRA (a subsidiary of the Bank of England which has responsibility for prudential regulation of banks and other systemically important institutions) and the Financial Conduct Authority (which regulates prudential matters for other firms and conduct matters for all participants). JPMorgan Chase mutual funds also are subject to regulation by the SEC. The Firm has subsidiaries that are members of futures exchanges in the United States and abroad and are registered accordingly. In the United States, two subsidiaries are registered as futures commission merchants, and other subsidiaries are either registered with the CFTC as commodity pool operators and commodity trading advisors or exempt from such registration. These CFTC-registered subsidiaries are also members of the National Futures Association. The Firms U.S. energy business is subject to regulation by the Federal Energy Regulatory Commission. It is also subject to other extensive and evolving energy, commodities, environmental and other governmental regulation both in the United States and other jurisdictions globally. Under the Dodd-Frank Act, the CFTC and SEC are the regulators of the Firms derivatives businesses. JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC, J.P. Morgan Securities plc and J.P. Morgan Ventures Energy Corporation have registered with the CFTC as swap dealers. The Firm expects that JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC and J.P. Morgan Securities plc may also need to register with the SEC as security-based swap dealers. The types of activities in which the non-U.S. branches of JPMorgan Chase Bank, N.A. and the international subsidiaries of JPMorgan Chase may engage are subject to various restrictions imposed by the Federal Reserve. Those non-U.S. branches and international subsidiaries also are subject to the laws and regulatory authorities of the countries in which they operate. Under the requirements imposed by the Gramm-Leach-Bliley Act, JPMorgan Chase and its subsidiaries are required periodically to disclose to their retail customers the Firms policies and practices with respect to the sharing of nonpublic customer information with JPMorgan Chase affiliates and others, and the confidentiality and security of that information. Under the Gramm-Leach-Bliley Act, retail customers also must be given the opportunity to opt out of information-sharing arrangements with non-affiliates, subject to certain exceptions set forth in the Gramm-Leach-Bliley Act. Significant international regulatory initiatives: The EU has created a European Systemic Risk Board which monitors financial stability, together with a framework of European Supervisory Agencies which oversees the regulation of financial institutions. In addition, the Group of Twenty Finance Ministers and Central Bank Governors (G-20) formed the FSB. At both G-20 and EU levels, various proposals are under consideration to address risks associated with global financial institutions. Some of the initiatives adopted include increased capital requirements for certain trading instruments or exposures and compensation limits on certain employees located in affected countries. In the EU, there is an extensive and complex program of proposed regulatory enhancement which reflects, in part, the EUs commitments to policies of the G-20 together with other plans specific to the EU. This program includes EMIR, which will require, among other things, the central clearing of standardized derivatives and which will be phased in by 2015; and MiFID II, which gives effect to the G-20 commitment to on-venue trading of derivatives and also includes requirements for pre-and post-trade transparency and a significant reconfiguration of the regulatory supervision of execution venues. The EU is also currently considering or executing upon significant revisions to laws covering: depositary activities; credit rating activities; resolution of banks, investment firms and market infrastructures; anti-money-laundering controls; data security and privacy; and corporate governance in financial firms, together with implementation in the EU of the Basel III capital standards. Following the issuance of the Report of the High Level Expert Group on Reforming the Structure of the EU Banking Sector (the Liikanen Group), the EU has proposed legislation providing for a proprietary trading ban and mandatory separation of other trading activities within certain banks, while various EU Member States have separately enacted similar measures. In the U.K., the Independent Commission on Banking (the Vickers Commission) proposed certain provisions, which have now been enacted by Parliament and upon which detailed implementing requirements are expected during 2014, that mandate the separation (or ring-fencing) of deposit-taking activities from securities trading and other analogous activities within banks, subject to certain exemptions. The legislation includes the supplemental recommendation of the Parliamentary Commission on Banking Standards (the Tyrie Commission) that such ring-fences should be electrified by the imposition of mandatory forced separation on banking institutions that are deemed to test the limits of the safeguards. Parallel but distinct provisions have been enacted by the French and German governments, and others are under consideration in other countries. Further, the EU is in the process of developing a Banking Union institutional and legislative framework, comprising central supervision of systemic institutions by the European Central Bank, and a Single Resolution Mechanism for resolving failing banks alongside the recently-agreed Bank Recovery and Resolution Directive. These measures may separately or taken together have significant implications for the Firm's organizational structure in Europe, as well as its permitted activities and capital deployment in the EU. Item 1A: RISK FACTORS The following discussion sets forth the material risk factors that could affect JPMorgan Chase s financial condition and operations. Readers should not consider any descriptions of such factors to be a complete set of all potential risks that could affect the Firm. Regulatory Risk JPMorgan Chase operates within a highly regulated industry, and the Firms businesses and results are significantly affected by the laws and regulations to which it is subject. As a global financial services firm, JPMorgan Chase is subject to extensive and comprehensive regulation under federal and state laws in the United States and the laws of the various jurisdictions outside the United States in which the Firm does business. These laws and regulations significantly affect the way that the Firm does business, and can restrict the scope of the Firms existing businesses and limit the Firms ability to expand its product offerings or to pursue acquisitions, or can make its products and services more expensive for clients and customers. The Firm is currently experiencing an unprecedented increase in regulations and supervision, and such changes could have a significant impact on how the Firm conducts business. Significant and comprehensive new legislation and regulations affecting the financial services industry have been adopted or proposed in recent years, both in the United States and globally, most notably the Dodd-Frank Act in the United States. Certain key regulations such as the Volcker Rule and the U.S. implementation of the Basel III capital standards have now been adopted, and the Firm continues to make appropriate adjustments to its business and operations, legal entity structure and capital and liquidity management policies, procedures and controls to comply with these and other new laws and regulations. However, U.S. and other regulators continue to develop, propose and adopt rules and propose new regulatory initiatives, so the cumulative effect of all of the new legislation and regulations on the Firms business and operations remains uncertain. In addition, there can be significant differences in the ways that similar regulatory initiatives affecting the financial services industry are implemented in different countries and regions in which JPMorgan Chase does business. Non-U.S. regulations and initiatives may be inconsistent or may conflict with current or proposed regulations in the United States, which could create increased compliance and other costs for the Firm and adversely affect its business, operations or profitability. These recent legislative and regulatory developments, as well as future legislative or regulatory actions in the United States and in the other countries in which the Firm operates, could result in a significant loss of revenue for the Firm, impose additional costs on the Firm or otherwise reduce the Firms profitability, limit the Firms ability to pursue business opportunities in which it might otherwise consider engaging, require the Firm to dispose of or curtail certain businesses, affect the value of assets that the Firm holds, require the Firm to increase its prices and therefore reduce demand for its products, or otherwise adversely affect the Firms businesses. Expanded regulatory oversight of JPMorgan Chases businesses will increase the Firms compliance costs and risks and may reduce the profitability of those businesses. In recent years the Firm has entered into several Consent Orders with its banking regulators and settlements with various governmental agencies, including the Consent Orders entered into in April 2011 relating to the Firms residential mortgage servicing, foreclosure and loss mitigation activities; the February 2012 global settlement with federal and state government agencies relating to the servicing and origination of mortgages; the Consent Orders entered into in January 2013 relating to the Firms Bank Secrecy Act/Anti-Money Laundering policies, procedures and controls and to Chief Investment Office risk management and control functions as well as trading activities; the Consent Orders entered into September 2013 concerning oversight of third parties, operational processes and control functions related to credit card collections litigation practices and to billing practices for credit monitoring products formerly offered by the Firm; the settlements in November 2013 of certain repurchase representation and warranty claims by a group of institutional investors and with the U.S. Department of Justice, several other federal agencies and several State Attorneys General relating to certain residential mortgage-backed securitization activities of the Firm, Bear Stearns and Washington Mutual; the Deferred Prosecution Agreement entered into in January 2014 with the U.S. Department of Justice and related agreements with the OCC and the Financial Crimes Enforcement Network ("FinCEN") relating to Bernard L. Madoff Investment Securities LLC and the Firm's AML compliance program; and the February 2014 settlement entered into with several federal government agencies relating to the Firms participation in certain federal mortgage insurance programs. These Consent Orders and settlements require the Firm, among other things, to remediate specified deficiencies in certain controls and operational processes; in some cases, to engage internal or external personnel to review past transactions or to monitor the extent to which cited lapses Part I have been addressed; and to furnish its regulators with periodic reports concerning the Firms progress in meeting the requirements of the orders and settlements. The Firm has also paid significant fines and penalties or provided monetary and other relief in connection with many of these actions and settlements. The Firm is devoting substantial resources to satisfying the requirements of these Consent Orders and settlements, including comprehensive enhancements to its procedures and controls, the expansion of risk and control functions within each line of business, investments in technology and the hiring of significant numbers of additional risk, control and compliance personnel, all of which has increased the Firms operational and compliance costs. In addition to these enforcement actions, the Firm is experiencing heightened regulatory oversight of its compliance with applicable laws and regulations, particularly with respect to its consumer businesses. The Firm expects that such regulatory scrutiny will continue, and that regulators will continue to take formal enforcement action, rather than taking informal supervisory actions, more frequently than they have done historically. If the Firm fails to successfully address the requirements of the Consent Orders, the Deferred Prosecution Agreement and the other regulatory settlements and enforcement actions to which it is subject, or more generally, to effectively enhance its risk and control procedures and processes to meet heightened expectations by its regulators, it may continue to face a greater number or wider scope of investigations, enforcement actions and litigation, thereby increasing its costs associated with responding to or defending such actions, and it could be required to enter into further orders and settlements, pay additional fines, penalties or judgments, or accept material regulatory restrictions on its businesses, which could adversely affect the Firms operations and, in turn, its financial results. In addition, further regulatory inquiries, investigations and actions, as well as any additional legislative or regulatory developments affecting the Firms businesses, and any required changes to the Firms business operations resulting from these developments, could result in significant loss of revenue, limit the products or services the Firm offers, require the Firm to increase its prices and therefore reduce demand for its products, impose additional compliance costs on the Firm, cause harm to the Firms reputation or otherwise adversely affect the Firms businesses. Under the Firms resolution plan required to be submitted by the Dodd-Frank Act resolution provisions, holders of the Firms debt obligations are at clear risk of loss in any resolution proceedings. In October 2013, JPMorgan Chase submitted to the Federal Reserve and the FDIC its annual update to its plan for resolution of the Firm. The Firms resolution plan includes strategies to resolve the Firm under the Bankruptcy Code, and also recommends to the FDIC and the Federal Reserve the Firms proposed optimal strategy to resolve the Firm under the special resolution procedure provided in Title II of the Dodd-Frank Act (Title II). The Firms recommendation for its optimal Title II strategy would involve a single point of entry recapitalization model in which the FDIC would use its power to create a bridge entity for JPMorgan Chase, transfer the systemically important and viable parts of the Firms business, principally the stock of JPMorgan Chase & Co.s main operating subsidiaries and any intercompany claims against such subsidiaries, to the bridge entity, recapitalize those businesses by contributing some or all of such intercompany claims to the capital of such subsidiaries, and by exchanging debt claims against JPMorgan Chase & Co. for equity in the bridge entity. If the Firm were to be resolved under this strategy, no assurance can be given that the value of the stock of the bridge entity distributed to the holders of debt obligations of JPMorgan Chase & Co. would be sufficient to repay or satisfy all or part of the principal amount of, and interest on, the debt obligations for which such stock was exchanged. Market Risk JPMorgan Chases results of operations have been, and may continue to be, adversely affected by U.S. and international financial market and economic conditions. JPMorgan Chases businesses are materially affected by economic and market conditions, including the liquidity of the global financial markets; the level and volatility of debt and equity prices, interest rates and currency and commodities prices; investor sentiment; events that reduce confidence in the financial markets; inflation and unemployment; the availability and cost of capital and credit; the economic effects of natural disasters, several weather conditions, acts of war or terrorism; monetary policies and actions taken by the Federal Reserve and other central banks and the health of U.S. or international economies. In the Firms wholesale businesses, the above-mentioned factors can affect transactions involving the Firms underwriting and advisory businesses; the realization of cash returns from its private equity business; the volume of transactions that the Firm executes for its customers and, therefore, the revenue that the Firm receives from commissions and spreads; and the willingness of financial sponsors or other investors to participate in loan syndications or underwritings managed by the Firm. The Firm generally maintains extensive market-making positions in the fixed income, currency, commodities and equity markets to facilitate client demand and provide liquidity to clients. The Firm may have market-making positions that lack pricing transparency or liquidity. The revenue derived from these positions is affected by many factors, including the Firms success in effectively hedging its market and other risks, volatility in interest rates and equity, debt and commodities markets, credit spreads, and availability of liquidity in the capital markets, all of which are affected by economic and market conditions. The Firm anticipates that revenue relating to its market-making and private equity businesses will continue to experience volatility, which will affect pricing or the ability to realize returns from such activities, and that this could materially adversely affect the Firms earnings. The fees that the Firm earns for managing third-party assets are also dependent upon general economic conditions. For example, a higher level of U.S. or non-U.S. interest rates or a downturn in securities markets could affect the valuations of the third-party assets that the Firm manages or holds in custody, which, in turn, could affect the Firms revenue. Macroeconomic or market concerns may also prompt outflows from the Firms funds or accounts. Changes in interest rates will affect the level of assets and liabilities held on the Firms balance sheet and the revenue that the Firm earns from net interest income. A low interest rate environment or a flat or inverted yield curve may adversely affect certain of the Firms businesses by compressing net interest margins, reducing the amounts that the Firm earns on its investment securities portfolio, or reducing the value of its mortgage servicing rights (MSR) asset, thereby reducing the Firms net interest income and other revenues. The Firms consumer businesses are particularly affected by domestic economic conditions, including U.S. interest rates; the rate of unemployment; housing prices; the level of consumer confidence; changes in consumer spending; and the number of personal bankruptcies. If the current positive trends in the U.S. economy are not sustained, this could diminish demand for the products and services of the Firms consumer businesses, or increase the cost to provide such products and services. In addition, adverse economic conditions, such as declines in home prices or persistent high levels of unemployment, could lead to an increase in mortgage, credit card and other loan delinquencies and higher net charge-offs, which can reduce the Firms earnings. Widening of credit spreads makes it more expensive for the Firm to borrow on both a secured and unsecured basis. Credit spreads widen or narrow not only in response to Firm-specific events and circumstances, but also as a result of general economic and geopolitical events and conditions. Changes in the Firms credit spreads will impact, positively or negatively, the Firms earnings on liabilities that are recorded at fair value. Finally, adverse economic and financial market conditions in specific countries or regions can have significant adverse effects on the Firms business, results of operations, financial condition and liquidity. For example, during the recent Eurozone debt crisis, concerns about the possibility of one or more sovereign debt defaults, significant bank failures or defaults and/or the exit of one or more countries from the European Monetary Union resulted in, among other things, declines in market liquidity, a contraction of available credit, and diminished economic growth and business confidence in the Eurozone. There are continuing concerns as to the ultimate financial effectiveness of the assistance measures taken to date, and the extent to which the austerity measures may exacerbate high unemployment and test the social and political stability of weaker economies in the Eurozone. The Firms business and results of operations can be adversely affected both by localized economic crises in parts of the world where the Firm does business or when regional economic turmoil causes deterioration of global economic conditions. Credit Risk The financial condition of JPMorgan Chases customers, clients and counterparties, including other financial institutions, could adversely affect the Firm. Financial services institutions are interrelated as a result of market-making, trading, clearing, counterparty or other relationships. The Firm routinely executes transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, mutual and hedge funds, investment managers and other institutional clients. Many of these transactions expose the Firm to credit risk and, in some cases, disputes and litigation in the event of a default by the counterparty or client. The Firm is a market leader in providing clearing and custodial services, and also acts as a clearing and custody bank in the securities and repurchase transaction market, including the U.S. tri-party repurchase transaction market. Many of these services expose the Firm to credit risk in the event of a default by the counterparty or client, a central counterparty (CCP) or another market participant. As part of providing clearing services, the Firm is a member of a number of CCPs, and may be required to pay a portion of the losses incurred by such organizations as a result of the default of other members. As a clearing member, the Firm is also exposed to the risk of non-performance by its clients, which it seeks to mitigate through the maintenance of adequate collateral. In its role as custodian bank in the securities and repurchase transaction market, the Firm can be exposed to intra-day credit risk of its clients. If a client to whom the Firm provides such services becomes bankrupt or insolvent, the Firm may become involved in disputes and litigation with various parties, including one or more CCPs, the clients bankruptcy estate and other creditors, or involved in regulatory investigations. All of such events can increase the Firms operational and litigation costs and may result in losses if any collateral received by the Firm declines in value. During periods of market stress or illiquidity, the Firms credit risk also may be further increased when the Firm cannot realize the fair value of the collateral held by it or when collateral is liquidated at prices that are not sufficient to recover the full amount of the loan, derivative or other exposure due to the Firm. Further, disputes with obligors as Part I to the valuation of collateral significantly increase in times of market stress and illiquidity. Periods of illiquidity could produce losses if the Firm is unable to realize the fair value of collateral or manage declines in the value of collateral. Concentration of credit and market risk could increase the potential for significant losses. JPMorgan Chase has exposure to increased levels of risk when customers are engaged in similar business activities or activities in the same geographic region, or when they have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. As a result, the Firm regularly monitors various segments of its portfolio exposures to assess potential concentration risks. The Firms efforts to diversify or hedge its credit portfolio against concentration risks may not be successful. In addition, disruptions in the liquidity or transparency of the financial markets may result in the Firms inability to sell, syndicate or realize the value of its positions, thereby leading to increased concentrations. The inability to reduce the Firms positions may not only increase the market and credit risks associated with such positions, but also increase the level of risk-weighted assets on the Firms balance sheet, thereby increasing its capital requirements and funding costs, all of which could adversely affect the operations and profitability of the Firms businesses. Liquidity Risk If JPMorgan Chase does not effectively manage its liquidity, its business could suffer. JPMorgan Chases liquidity is critical to its ability to operate its businesses. Some potential conditions that could impair the Firms liquidity include markets that become illiquid or are otherwise experiencing disruption, unforeseen cash or capital requirements (including, among others, commitments that may be triggered to special purpose entities (SPEs) or other entities), difficulty in selling or inability to sell assets, unforeseen outflows of cash or collateral, and lack of market or customer confidence in the Firm or financial markets in general. These conditions may be caused by events over which the Firm has little or no control. The widespread crisis in investor confidence and resulting liquidity crisis experienced in 2008 and into early 2009 increased the Firms cost of funding and limited its access to some of its traditional sources of liquidity (such as securitized debt offerings backed by mortgages, credit card receivables and other assets) during that time, and there is no assurance that these conditions could not occur in the future. If the Firms access to stable and low cost sources of funding, such as bank deposits, are reduced, the Firm may need to raise alternative funding which may be more expensive or of limited availability. As a holding company, JPMorgan Chase & Co. relies on the earnings of its subsidiaries for its cash flow and, consequently, its ability to pay dividends and satisfy its debt and other obligations. These payments by subsidiaries may take the form of dividends, loans or other payments. Several of JPMorgan Chase & Co.s principal subsidiaries are subject to dividend distribution or capital adequacy requirements or other regulatory restrictions on their ability to provide such payments. Limitations in the payments that JPMorgan Chase & Co. receives from its subsidiaries could reduce its liquidity position. Some regulators have proposed legislation or regulations requiring large banks to incorporate a separate subsidiary in countries in which they operate, and to maintain independent capital and liquidity for such subsidiaries. If adopted, these requirements could hinder the Firms ability to efficiently manage its funding and liquidity in a centralized manner. Reductions in the Firms credit ratings may adversely affect its liquidity and cost of funding, as well as the value of debt obligations issued by the Firm. JPMorgan Chase & Co. and certain of its subsidiaries, including JPMorgan Chase Bank, N.A., are currently rated by credit rating agencies. In 2013, Moodys downgraded its ratings of JPMorgan Chase & Co. and several other bank holding companies based on Moodys reassessment of its assumptions relating to implicit government support for such companies. In addition, as of year-end 2013, S&P had JPMorgan Chase & Co. on negative outlook, indicating the possibility of a downgrade in ratings. Although the Firm closely monitors and manages factors influencing its credit ratings, there is no assurance that such ratings will not be lowered in the future. Furthermore, the rating agencies continue to evaluate economic and geopolitical trends, regulatory developments, rating uplift assumptions surrounding government support, future profitability, risk management practices and legal expenses, all of which could lead to adverse ratings actions. There is no assurance that any such downgrades from rating agencies, if they affected the Firms credit ratings, would not occur at times of broader market instability when the Firms options for responding to events may be more limited and general investor confidence is low. Further, a reduction in the Firms credit ratings could reduce the Firms access to debt markets, materially increase the cost of issuing debt, trigger additional collateral or funding requirements, and decrease the number of investors and counterparties willing or permitted, contractually or otherwise, to do business with or lend to the Firm, thereby curtailing the Firms business operations and reducing its profitability. In addition, any such reduction in credit ratings may increase the credit spreads charged by the market for taking credit risk on JPMorgan Chase & Co. and its subsidiaries and, as a result, could adversely affect the value of debt obligations that they have issued or may issue in the future . Legal Risk JPMorgan Chase faces significant legal risks, both from regulatory investigations and proceedings and from private actions brought against the Firm. JPMorgan Chase is named as a defendant or is otherwise involved in various legal proceedings, including class actions and other litigation or disputes with third parties. Actions currently pending against the Firm may result in judgments, settlements, fines, penalties or other results adverse to the Firm, which could materially adversely affect the Firms business, financial condition or results of operations, or cause serious reputational harm to the Firm. As a participant in the financial services industry, it is likely that the Firm will continue to experience a high level of litigation related to its businesses and operations. In addition, and as noted above, the Firms businesses and operations are also subject to heightened regulatory oversight and scrutiny, which may lead to additional regulatory investigations or enforcement actions. As the regulators and other government agencies continue to examine the operations of the Firm and its bank subsidiaries, there is no assurance that additional consent orders or other enforcement actions will not be issued by them in the future. These and other initiatives from federal and state officials may subject the Firm to further judgments, settlements, fines or penalties, or cause the Firm to be required to restructure its operations and activities, all of which could lead to reputational issues, or higher operational costs, thereby reducing the Firms revenue. Business and Operational Risks JPMorgan Chases operations are subject to risk of loss from unfavorable economic, monetary and political developments in the United States and around the world. JPMorgan Chases businesses and earnings are affected by the fiscal and other policies that are adopted by various U.S. and non-U.S. regulatory authorities and agencies. The Federal Reserve regulates the supply of money and credit in the United States and its policies determine in large part the cost of funds for lending and investing in the United States and the return earned on those loans and investments. Changes in Federal Reserve policies (as well as the fiscal and monetary policies of non-U.S. central banks or regulatory authorities and agencies) are beyond the Firms control and, consequently, the impact of changes in these policies on the Firms activities and results of operations is difficult to predict. The Firms businesses and revenue are also subject to risks inherent in investing and market-making in securities of companies worldwide. These risks include, among others, risk of loss from unfavorable political, legal or other developments, including social or political instability, in the countries in which such companies operate, as well as the other risks and considerations as described further below. Several of the Firms businesses engage in transactions with, or trade in obligations of, U.S. and non-U.S. governmental entities, including national, state, provincial, municipal and local authorities. These activities can expose the Firm to enhanced sovereign, credit-related, operational and reputational risks, including the risks that a governmental entity may default on or restructure its obligations or may claim that actions taken by government officials were beyond the legal authority of those officials, which could adversely affect the Firms financial condition and results of operations. Further, various countries in which the Firm operates or invests, or in which the Firm may do so in the future, have in the past experienced severe economic disruptions particular to those countries or regions. In some cases, concerns regarding the fiscal condition of one or more countries can lead to market contagion to other countries in the same region or beyond the region. Accordingly, it is possible that economic disruptions in certain countries, even in countries in which the Firm does not conduct business or have operations, will adversely affect the Firm. JPMorgan Chases international strategy may be hindered by local political, social and economic factors, and will be subject to additional compliance costs and risks. JPMorgan Chase has expanded and plans to continue to grow its international wholesale businesses in Europe/Middle East/Africa (EMEA), Asia/Pacific and Latin America/Caribbean over time. As part of its international strategy, the Firm seeks to provide a wider range of financial services to its clients that conduct business in those regions. Some of the countries in which JPMorgan Chase conducts its wholesale businesses have economies or markets that are less developed and more volatile, and may have legal and regulatory regimes that are less established or predictable, than the United States and other developed markets in which the Firm currently operates. Some of these countries have in the past experienced severe economic disruptions, including extreme currency fluctuations, high inflation, or low or negative growth, among other negative conditions, or have imposed restrictive monetary policies such as currency exchange controls and other laws and restrictions that adversely affect the local and regional business environment. In addition, these countries have historically been more susceptible to unfavorable political, social or economic developments which have in the past resulted in, and may in the future lead to, social unrest, general strikes and demonstrations, outbreaks of hostilities, overthrow of incumbent governments, terrorist attacks or other forms of internal discord, all of which can adversely affect the Firms operations or investments in such countries. Political, social or economic disruption or dislocation in certain countries or regions in which the Firm conducts its wholesale businesses can hinder the growth and profitability of those operations, and there can be no assurance that the Firm will be able to successfully execute its international strategy. Part I Less developed legal and regulatory systems in certain countries can also have adverse consequences on the Firms operations in those countries, including, among others, the absence of a statutory or regulatory basis or guidance for engaging in specific types of business or transactions, or the inconsistent application or interpretation of existing laws and regulations; uncertainty as to the enforceability of contractual obligations; difficulty in competing in economies in which the government controls or protects all or a portion of the local economy or specific businesses, or where graft or corruption may be pervasive; and the threat of arbitrary regulatory investigations, civil litigations or criminal prosecutions. Revenue from international operations and trading in non-U.S. securities and other obligations may be subject to negative fluctuations as a result of the above considerations, as well as due to governmental actions including expropriation, nationalization, confiscation of assets, price controls, capital controls, exchange controls, and changes in laws and regulations. The impact of these fluctuations could be accentuated as some trading markets are smaller, less liquid and more volatile than larger markets. Also, any of the above-mentioned events or circumstances in one country can, and has in the past, affected the Firms operations and investments in another country or countries, including the Firms operations in the United States. As a result, any such unfavorable conditions or developments could have an adverse impact on the Firms business and results of operations. Conducting business in countries with less developed legal and regulatory regimes often requires the Firm to devote significant additional resources to understanding, and monitoring changes in, local laws and regulations, as well as structuring its operations to comply with local laws and regulations and implementing and administering related internal policies and procedures. There can be no assurance that the Firm will always be successful in its efforts to conduct its business in compliance with laws and regulations in countries with less predictable legal and regulatory systems. In addition, the Firm can also incur higher costs, and face greater compliance risks, in structuring its operations outside the United States to comply with U.S. anti-corruption and anti-money laundering laws and regulations. JPMorgan Chases commodities activities are subject to extensive regulation, potential catastrophic events and environmental risks and regulation that may expose the Firm to significant cost and liability. JPMorgan Chase engages in the storage, transportation, marketing or trading of several commodities, including metals, agricultural products, crude oil, oil products, natural gas, electric power, emission credits, coal, freight, and related products and indices. The Firm is also engaged in power generation and has invested in companies engaged in wind energy and in sourcing, developing and trading emission reduction credits. As a result of all of these activities, the Firm is subject to extensive and evolving energy, commodities, environmental, and other governmental laws and regulations. The Firm expects laws and regulations affecting its commodities activities to expand in scope and complexity, and to restrict some of the Firms activities, which could result in lower revenues from the Firms commodities activities. In addition, the Firm may incur substantial costs in complying with current or future laws and regulations, and the failure to comply with these laws and regulations may result in substantial civil and criminal fines and penalties. Furthermore, liability may be incurred without regard to fault under certain environmental laws and regulations for remediation of contaminations. The Firms commodities activities also further expose the Firm to the risk of unforeseen and catastrophic events, including natural disasters, leaks, spills, explosions, release of toxic substances, fires, accidents on land and at sea, wars, and terrorist attacks that could result in personal injuries, loss of life, property damage, damage to the Firms reputation and suspension of operations. The Firms commodities activities are also subject to disruptions, many of which are outside of the Firms control, from the breakdown or failure of power generation equipment, transmission lines or other equipment or processes, and the contractual failure of performance by third-party suppliers or service providers, including the failure to obtain and deliver raw materials necessary for the operation of power generation facilities. The Firms actions to mitigate its risks related to the above-mentioned considerations may not prove adequate to address every contingency. In addition, insurance covering some of these risks may not be available, and the proceeds, if any, from insurance recovery may not be adequate to cover liabilities with respect to particular incidents. As a result, the Firms financial condition and results of operations may be adversely affected by such events. JPMorgan Chase relies on the integrity of its operating systems and employees, and those of third parties, and certain failures of such systems or misconduct by such employees could materially adversely affect the Firms operations. JPMorgan Chases businesses are dependent on the Firms ability to process, record and monitor a large number of complex transactions. If the Firms financial, accounting, or other data processing systems fail or have other significant shortcomings, the Firm could be materially adversely affected. The Firm is similarly dependent on its employees. The Firm could be materially adversely affected if one or more of its employees causes a significant operational breakdown or failure, either as a result of human error or where an individual purposefully sabotages or fraudulently manipulates the Firms operations or systems. In addition, as the Firm changes processes or introduces new products and services, the Firm may not fully appreciate or identify new operational risks that may arise from such changes. Any of these occurrences could diminish the Firms ability to operate one or more of its businesses, or result in potential liability to clients, increased operating expenses, higher litigation costs (including fines and sanctions), reputational damage, regulatory intervention or weaker competitive standing, any of which could materially and adversely affect the Firm. Third parties with which the Firm does business, as well as retailers and other third parties with which the Firms customers do business, can also be sources of operational risk to the Firm, including with respect to security breaches affecting such parties and breakdowns or failures of the systems or misconduct by the employees of such parties. Incidents of these types may require the Firm to take steps to protect the integrity of its own operational systems or to safeguard confidential information of the Firm or its customers, thereby increasing the Firms operational costs and potentially diminish customer satisfaction. If personal, confidential or proprietary information of customers or clients in the Firms possession were to be mishandled or misused, the Firm could suffer significant regulatory consequences, reputational damage and financial loss. Such mishandling or misuse could include circumstances where, for example, such information was erroneously provided to parties who are not permitted to have the information, either through the fault of the Firms systems, employees, or counterparties, or where such information was intercepted or otherwise inappropriately taken by third parties. The Firm may be subject to disruptions of its operating systems arising from events that are wholly or partially beyond the Firms control, which may include, for example, security breaches (as discussed further below); electrical or telecommunications outages; failures of computer servers or other damage to the Firms property or assets; natural disasters or severe weather conditions; health emergencies or pandemics; or events arising from local or larger scale political events, including terrorist acts. JPMorgan Chase maintains a global resiliency and crisis management program that is intended to ensure that the Firm has the ability to recover its critical business functions and supporting assets, including staff, technology and facilities, in the event of a business interruption. While the Firm believes that its current resiliency plans are both sufficient and adequate, there can be no assurance that such plans will fully mitigate all potential business continuity risks to the Firm. Any failures or disruptions of the Firms systems or operations could give rise to losses in service to customers and clients, adversely affect the Firms business and results of operations by subjecting the Firm to losses or liability, or require the Firm to expend significant resources to correct the failure or disruption, as well as by exposing the Firm to litigation, regulatory fines or penalties or losses not covered by insurance. A breach in the security of JPMorgan Chases systems could disrupt its businesses, result in the disclosure of confidential information, damage its reputation and create significant financial and legal exposure for the Firm. Although JPMorgan Chase devotes significant resources to maintain and regularly upgrade its systems and processes that are designed to protect the security of the Firms computer systems, software, networks and other technology assets and the confidentiality, integrity and availability of information belonging to the Firm and its customers, there is no assurance that all of the Firms security measures will provide absolute security. JPMorgan Chase and other financial services institutions and companies engaged in data processing have reported breaches in the security of their websites or other systems, some of which have involved sophisticated and targeted attacks intended to obtain unauthorized access to confidential information, destroy data, disrupt or degrade service, sabotage systems or cause other damage, often through the introduction of computer viruses or malware, cyberattacks and other means. In particular, the Firm has experienced several significant distributed denial-of-service attacks from technically sophisticated and well-resourced third parties which were intended to disrupt online banking services, as well as data breaches due to cyberattacks which, in certain instances, have resulted in unauthorized access to customer data. Despite the Firms efforts to ensure the integrity of its systems, it is possible that the Firm may not be able to anticipate or to implement effective preventive measures against all security breaches of these types, especially because the techniques used change frequently or are not recognized until launched, and because cyberattacks can originate from a wide variety of sources, including third parties outside the Firm such as persons who are involved with organized crime or associated with external service providers or who may be linked to terrorist organizations or hostile foreign governments. Those parties may also attempt to fraudulently induce employees, customers or other users of the Firms systems to disclose sensitive information in order to gain access to the Firms data or that of its customers or clients. These risks may increase in the future as the Firm continues to increase its mobile-payment and other internet-based product offerings and expands its internal usage of web-based products and applications. A successful penetration or circumvention of the security of the Firms systems could cause serious negative consequences for the Firm, including significant disruption of the Firms operations, misappropriation of confidential information of the Firm or that of its customers, or damage to computers or systems of the Firm and those of its customers and counterparties, and could result in violations of applicable privacy and other laws, financial loss to the Firm or to its customers, loss of confidence in the Firms security measures, customer dissatisfaction, significant Part I litigation exposure, and harm to the Firms reputation, all of which could have a material adverse effect on the Firm. Risk Management JPMorgan Chases framework for managing risks and its risk management procedures and practices may not be effective in identifying and mitigating every risk to the Firm, thereby resulting in losses. JPMorgan Chases risk management framework seeks to mitigate risk and loss to the Firm. The Firm has established processes and procedures intended to identify, measure, monitor, report and analyze the types of risk to which the Firm is subject. However, as with any risk management framework, there are inherent limitations to the Firms risk management strategies because there may exist, or develop in the future, risks that the Firm has not appropriately anticipated or identified. Any lapse in the Firms risk management framework and governance structure or other inadequacies in the design or implementation of the Firms risk management framework, governance, procedures or practices could, individually or in the aggregate, cause unexpected losses for the Firm, materially and adversely affect the Firms financial condition and results of operations, require significant resources to remediate any risk management deficiency, attract heightened regulatory scrutiny, expose the Firm to regulatory investigations or legal proceedings, subject the Firm to fines, penalties or judgments, harm the Firms reputation, or otherwise cause a decline in investor confidence. The Firms products, including loans, leases, lending commitments, derivatives, trading account assets and assets held-for-sale, as well as cash management and clearing activities, expose the Firm to credit risk. As one of the nations largest lenders, the Firm has exposures arising from its many different products and counterparties, and the credit quality of the Firms exposures can have a significant impact on its earnings. The Firm establishes allowances for probable credit losses inherent in its credit exposure, including unfunded lending commitments. The Firm also employs stress testing and other techniques to determine the capital and liquidity necessary to protect the Firm in the event of adverse economic or market events. These processes are critical to the Firms financial results and condition, and require difficult, subjective and complex judgments, including forecasts of how economic conditions might impair the ability of the Firms borrowers and counterparties to repay their loans or other obligations. As is the case with any such assessments, there is always the possibility that the Firm will fail to identify the proper factors or that the Firm will fail to accurately estimate the impact of factors that it identifies. JPMorgan Chases market-making businesses may expose the Firm to unexpected market, credit and operational risks that could cause the Firm to suffer unexpected losses. Severe declines in asset values, unanticipated credit events, or unforeseen circumstances that may cause previously uncorrelated factors to become correlated (and vice versa) may create losses resulting from risks not appropriately taken into account in the development, structuring or pricing of a financial instrument such as a derivative. Certain of the Firms derivative transactions require the physical settlement by delivery of securities, commodities or obligations that the Firm does not own; if the Firm is unable to obtain such securities, commodities or obligations within the required timeframe for delivery, this could cause the Firm to forfeit payments otherwise due to it and could result in settlement delays, which could damage the Firms reputation and ability to transact future business. In addition, in situations where trades are not settled or confirmed on a timely basis, the Firm may be subject to heightened credit and operational risk, and in the event of a default, the Firm may be exposed to market and operational losses. In particular, disputes regarding the terms or the settlement procedures of derivative contracts could arise, which could force the Firm to incur unexpected costs, including transaction, legal and litigation costs, and impair the Firms ability to manage effectively its risk exposure from these products. In a difficult or less liquid market environment, the Firms risk management strategies may not be effective because other market participants may be attempting to use the same or similar strategies to deal with the challenging market conditions. In such circumstances, it may be difficult for the Firm to reduce its risk positions due to the activity of such other market participants. Many of the Firms risk management strategies or techniques have a basis in historical market behavior, and all such strategies and techniques are based to some degree on managements subjective judgment. For example, many models used by the Firm are based on assumptions regarding correlations among prices of various asset classes or other market indicators. In times of market stress, or in the event of other unforeseen circumstances, previously uncorrelated indicators may become correlated, or conversely, previously correlated indicators may make unrelated movements. These sudden market movements or unanticipated or unidentified market or economic movements have in some circumstances limited and could again limit the effectiveness of the Firms risk management strategies, causing the Firm to incur losses. Many of the models used by the Firm are subject to review not only by the Firms Model Risk function but also by the Firms regulators in order that the Firm may utilize such models in connection with the Firms calculations of market risk risk-weighted assets (RWA) and credit risk RWA under the Advanced Approach of Basel III. The Firm may be subject to higher capital charges, which could adversely affect its financial results or limit its ability to expand its businesses, if such models do not receive approval by its regulators. In addition, there is no assurance that the amount of capital that the Firm holds with respect to operational risk, as derived from its operational risk capital model required under the Basel III capital standards, will not be required to increase, which may have the effect of reducing the Firms profitability. In addition, the Firm must comply with enhanced standards for the assessment and management of risks associated with vendors and other third parties that provide services to the Firm. These requirements apply to the Firm both under general guidance issued by the banking regulators and, more specifically, under the Consent Order entered into by the Firm relating to collections litigation practices. The Firm has incurred and expects to incur additional costs and expenses in connection with its initiatives to address the risks associated with oversight of its third party relationships. Failure by the Firm to appropriately assess and manage third party relationships, especially those involving significant banking functions, shared services or other critical activities, could result in potential liability to clients and customers, fines, penalties or judgments imposed by the Firms regulators, increased operating expenses and harm to the Firms reputation, any of which could materially and adversely affect the Firm. Lapses in disclosure controls and procedures or internal control over financial reporting could materially and adversely affect the Firms operations, profitability or reputation. There can be no assurance that the Firms disclosure controls and procedures will be effective in every circumstance or that a material weakness or significant deficiency in internal control over financial reporting could not occur again. Any such lapses or deficiencies may materially and adversely affect the Firms business and results of operations or financial condition, restrict its ability to access the capital markets, require the Firm to expend significant resources to correct the lapses or deficiencies, expose the Firm to regulatory or legal proceedings, subject it to fines, penalties or judgments, harm the Firms reputation, or otherwise cause a decline in investor confidence. Other Risks The financial services industry is highly competitive, and JPMorgan Chases inability to compete successfully may adversely affect its results of operations. JPMorgan Chase operates in a highly competitive environment and the Firm expects competitive conditions to continue to intensify as the financial services industry produces better-capitalized and more geographically diverse companies that are capable of offering a wider array of financial products and services at more competitive prices. Competitors include other banks, brokerage firms, investment banking companies, merchant banks, hedge funds, commodity trading companies, private equity firms, insurance companies, mutual fund companies, investment managers, credit card companies, mortgage banking companies, trust companies, securities processing companies, automobile financing companies, leasing companies, e-commerce and other Internet-based companies, and a variety of other financial services and advisory companies. Technological advances and the growth of e-commerce have made it possible for non-depository institutions to offer products and services that traditionally were banking products, and for financial institutions and other companies to provide electronic and Internet-based financial solutions, including electronic securities trading. The Firms businesses generally compete on the basis of the quality and variety of the Firms products and services, transaction execution, innovation, reputation and price. Ongoing or increased competition in any one or all of these areas may put downward pressure on prices for the Firms products and services or may cause the Firm to lose market share. Increased competition also may require the Firm to make additional capital investments in its businesses in order to remain competitive. These investments may increase expense or may require the Firm to extend more of its capital on behalf of clients in order to execute larger, more competitive transactions. The Firm cannot provide assurance that the significant competition in the financial services industry will not materially adversely affect its future results of operations. Competitors of the Firms non-U.S. wholesale businesses are typically subject to different, and in some cases, less stringent, legislative and regulatory regimes. For example, the regulatory objectives underlying several provisions of the Dodd-Frank Act, including the prohibition on proprietary trading under the Volcker Rule and the derivatives push-out rules, have not been embraced by governments and regulatory agencies outside the United States and may not be implemented into law in most countries. The more restrictive laws and regulations applicable to U.S. financial services institutions, such as JPMorgan Chase, can put the Firm at a competitive disadvantage to its non-U.S. competitors, including prohibiting the Firm from engaging in certain transactions, making the Firms pricing of certain transactions more expensive for clients or adversely affecting the Firms cost structure for providing certain products, all of which can reduce the revenue and profitability of the Firms wholesale businesses. JPMorgan Chases ability to attract and retain qualified employees is critical to the success of its business, and failure to do so may materially adversely affect the Firms performance. JPMorgan Chases employees are the Firms most important resource, and in many areas of the financial services industry, competition for qualified personnel is intense. The imposition on the Firm or its employees of restrictions on executive compensation may adversely affect the Firms ability to attract and retain qualified senior management and employees. If the Firm is unable to continue to retain and attract qualified employees, the Firms performance, including its competitive position, could be materially adversely affected. Part I JPMorgan Chases financial statements are based in part on assumptions and estimates which, if incorrect, could cause unexpected losses in the future. Pursuant to accounting principles generally accepted in the United States, JPMorgan Chase is required to use certain assumptions and estimates in preparing its financial statements, including in determining allowances for credit losses and reserves related to litigation, among other items. Certain of the Firms financial instruments, including trading assets and liabilities, available-for-sale securities, certain loans, MSRs, private equity investments, structured notes and certain repurchase and resale agreements, among other items, require a determination of their fair value in order to prepare the Firms financial statements. Where quoted market prices are not available, the Firm may make fair value determinations based on internally developed models or other means which ultimately rely to some degree on management estimation and judgment. In addition, sudden illiquidity in markets or declines in prices of certain loans and securities may make it more difficult to value certain balance sheet items, which may lead to the possibility that such valuations will be subject to further change or adjustment. If assumptions or estimates underlying the Firms financial statements are incorrect, the Firm may experience material losses. Damage to JPMorgan Chases reputation could damage its businesses. Maintaining trust in JPMorgan Chase is critical to the Firms ability to attract and maintain customers, investors and employees. Damage to the Firms reputation can therefore cause significant harm to the Firms business and prospects. Harm to the Firms reputation can arise from numerous sources, including, among others, employee misconduct, compliance failures, litigation or regulatory outcomes or governmental investigations. The Firms reputation could also be harmed by the failure of an affiliate, joint-venturer or merchant banking portfolio company, or a vendor or other third party with which the Firm does business, to comply with laws or regulations. In addition, a failure to deliver appropriate standards of service and quality, or a failure or perceived failure to treat customers and clients fairly, can result in customer dissatisfaction, litigation and heightened regulatory scrutiny, all of which can lead to lost revenue, higher operating costs and harm to the Firms reputation. Adverse publicity regarding the Firm, whether or not true, may result in harm to the Firms prospects. Actions by the financial services industry generally or by certain members of or individuals in the industry can also affect the Firms reputation. For example, the role played by financial services firms in the financial crisis, including concerns that consumers have been treated unfairly by financial institutions, has damaged the reputation of the industry as a whole. Should any of these or other events or factors that can undermine the Firms reputation occur, there is no assurance that the additional costs and expenses that the Firm may need to incur to address the issues giving rise to the reputational harm could not adversely affect the Firms earnings and results of operations. Management of potential conflicts of interests has become increasingly complex as the Firm continues to expand its business activities through more numerous transactions, obligations and interests with and among the Firms clients. The failure to adequately address, or the perceived failure to adequately address, conflicts of interest could affect the willingness of clients to deal with the Firm, or give rise to litigation or enforcement actions, as well as cause serious reputational harm to the Firm. ITEM 1B: UNRESOLVED SEC STAFF COMMENTS None. ITEM 2: PROPERTIES JPMorgan Chase s headquarters is located in New York City at 270 Park Avenue, a 50-story office building owned by JPMorgan Chase . This location contains approximately 1.3 million square feet of space. In total, JPMorgan Chase owned or leased approximately 11.4 million square feet of commercial office and retail space in New York City at December 31, 2013 . JPMorgan Chase and its subsidiaries also own or lease significant administrative and operational facilities in Chicago, Illinois (3.7 million square feet); Houston and Dallas, Texas (3.6 million square feet); Columbus, Ohio (2.8 million square feet); Phoenix, Arizona (1.4 million square feet); Jersey City, New Jersey (1.0 million square feet); as well as owning or leasing 5,630 retail branches in 23 states. At December 31, 2013 , the Firm occupied approximately 67.5 million total square feet of space in the United States. On December 17, 2013, the Firm sold One Chase Manhattan Plaza, a 60-story, 2.2 million square foot office building. Contemporaneously, the Firm entered into a lease back agreement on approximately 1.2 million square feet of space in the building for one year in order to provide time to relocate its employees to other locations, predominantly in New York and New Jersey. Additionally, the Firm entered into long-term lease back agreements ranging from five to ten years for approximately 0.3 million square feet of space, which includes five office floors, portions of the lower level space, and retail branch space on the ground floor. At December 31, 2013 , the Firm also owned or leased approximately 5.4 million square feet of space in Europe, the Middle East and Africa. In the United Kingdom, at December 31, 2013 , JPMorgan Chase owned or leased approximately 4.5 million square feet of space, including 1.4 million square feet at 25 Bank Street, the European headquarters of the Corporate & Investment Bank. In 2008, JPMorgan Chase acquired a 999-year leasehold interest in land at Londons Canary Wharf. JPMorgan Chase has a building agreement in place through October 30, 2016, to develop the Canary Wharf site for future use. JPMorgan Chase and its subsidiaries also occupy offices and other administrative and operational facilities in the Asia/Pacific region, Latin America and Canada under ownership and leasehold agreements aggregating approximately 5.9 million square feet of space at December 31, 2013 . This includes leases for administrative and operational facilities in India (2.0 million square feet) and the Philippines (1.0 million square feet). The properties occupied by JPMorgan Chase are used across all of the Firms business segments and for corporate purposes. JPMorgan Chase continues to evaluate its current and projected space requirements and may determine from time to time that certain of its premises and facilities are no longer necessary for its operations. There is no assurance that the Firm will be able to dispose of any such excess premises or that it will not incur charges in connection with such dispositions. Such disposition costs may be material to the Firms results of operations in a given period. For a discussion of occupancy expense, see the Consolidated Results of Operations on pages 7174 . ITEM 3: LEGAL PROCEEDINGS For a description of the Firms material legal proceedings, see Note 31 on pages 326332 . ITEM 4: MINE SAFETY DISCLOSURES Not applicable. Part II ITEM 5: MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for registrants common equity The outstanding shares of JPMorgan Chase common stock are listed and traded on the New York Stock Exchange, the London Stock Exchange and the Tokyo Stock Exchange. For the quarterly high and low prices of JPMorgan Chase s common stock for the last two years, see the section entitled Supplementary information  Selected quarterly financial data (unaudited) on pages 339340 . For a comparison of the cumulative total return for JPMorgan Chase common stock with the comparable total return of the S&P 500 Index, the KBW Bank Index and the S&P Financial Index over the five-year period ended December 31, 2013 , see Five-year stock performance, on page 63 . JPMorgan Chase declared and paid quarterly cash dividends on its common stock in the amount of $0.38 per share for the second, third and fourth quarters of 2013 , $0.30 per share for the first quarter of 2013 , $0.30 per share for each quarter of 2012 and $0.25 per share for each quarter of 2011 . The common dividend payout ratio, based on reported net income, was 33% for 2013 , 23% for 2012 and 22% for 2011 . For a discussion of restrictions on dividend payments, see Note 22 and Note 27 on page 309 and page 316 , respectively. At January 31, 2014 , there were 207,543 holders of record of JPMorgan Chase common stock. For information regarding securities authorized for issuance under the Firms employee stock-based compensation plans, see Item 12 on page 24 . Repurchases under the common equity repurchase program On March 13, 2012 , the Board of Directors authorized a $15.0 billion common equity (i.e., common stock and warrants) repurchase program. The amount of equity that may be repurchased is also subject to the amount that is set forth in the Firm's annual capital plan that is submitted to the Federal Reserve as part of the CCAR process. The following table shows the Firms repurchases of common equity for the years ended December 31, 2013 , 2012 and 2011 , on a trade-date basis. As of December 31, 2013 , $8.6 billion of authorized repurchase capacity remained under the program. The Firm may, from time to time, enter into written trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934 to facilitate repurchases in accordance with the common equity repurchase program. A Rule 10b5-1 repurchase plan allows the Firm to repurchase its equity during periods when it would not otherwise be repurchasing common equity  for example, during internal trading black-out periods. All purchases under a Rule 10b5-1 plan must be made according to a predefined plan established when the Firm is not aware of material nonpublic information. The authorization to repurchase common equity will be utilized at managements discretion, and the timing of purchases and the exact amount of common equity that may be repurchased is subject to various factors, including market conditions; legal and regulatory considerations affecting the amount and timing of repurchase activity; the Firms capital position (taking into account goodwill and intangibles); internal capital generation; and alternative investment opportunities. The repurchase program does not include specific price targets or timetables; may be executed through open market purchases or privately negotiated transactions, or utilizing Rule 10b5-1 programs; and may be suspended at any time. Shares repurchased pursuant to the common equity repurchase program during 2013 were as follows. 
Repurchases under the stock-based incentive plans Participants in the Firms stock-based incentive plans may have shares of common stock withheld to cover income taxes. Shares withheld to pay income taxes are repurchased pursuant to the terms of the applicable plan and not under the Firms repurchase program. Shares repurchased pursuant to these plans during 2013 were as follows. ITEM 6: SELECTED FINANCIAL DATA For five-year selected financial data, see Five-year summary of consolidated financial highlights (unaudited) on pages 6263 . ITEM 7: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Managements discussion and analysis of financial condition and results of operations, entitled Managements discussion and analysis, appears on pages 64181 . Such information should be read in conjunction with the Consolidated Financial Statements and Notes thereto, which appear on pages 184338 . ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK For a discussion of the quantitative and qualitative disclosures about market risk, see the Market Risk Management section of Managements discussion and analysis on pages 142148 . ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Consolidated Financial Statements, together with the Notes thereto and the report thereon dated February 19, 2014 , of PricewaterhouseCoopers LLP, the Firms independent registered public accounting firm, appear on pages 183338 . Supplementary financial data for each full quarter within the two years ended December 31, 2013 , are included on pages 339340 in the table entitled Selected quarterly financial data (unaudited). Also included is a Glossary of terms on pages 341345 . ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. Part II ITEM 9A: CONTROLS AND PROCEDURES As of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of the Firms management, including its Chairman and Chief Executive Officer and its Chief Financial Officer, of the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based on that evaluation, the Chairman and Chief Executive Officer and the Chief Financial Officer concluded that these disclosure controls and procedures were effective. See Exhibits 31.1 and 31.2 for the Certification statements issued by the Chairman and Chief Executive Officer and Chief Financial Officer. The Firm is committed to maintaining high standards of internal control over financial reporting. Nevertheless, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, in a firm as large and complex as JPMorgan Chase , lapses or deficiencies in internal controls may occur from time to time, and there can be no assurance that any such deficiencies will not result in significant deficiencies or material weaknesses in internal controls in the future. For further information, see Managements report on internal control over financial reporting on page 182 . There was no change in the Firms internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that occurred during the three months ended December 31, 2013 , that has materially affected, or is reasonably likely to materially affect, the Firms internal control over financial reporting. ITEM 9B: OTHER INFORMATION Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, which added Section 13(r) to the Securities Exchange Act of 1934, as amended (the Exchange Act), an issuer is required to disclose in its annual or quarterly reports, as applicable, whether it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with individuals or entities designated pursuant to certain Executive Orders. Disclosure is generally required even where the activities, transactions or dealings were conducted in compliance with applicable law. Except as set forth below, as of the date of this report, the Firm is not aware of any other activity, transaction or dealing by any of its affiliates during the year ended December 31, 2013 that requires disclosure under Section 219. Carlson Wagonlit Travel (CWT), a business travel management firm in which JPMorgan Chase has invested through its merchant banking activities, may be deemed to be an affiliate of the Firm, as that term is defined in Exchange Act Rule 12b-2. CWT has informed the Firm that, during the year ended December 31, 2013 , it booked approximately 15 flights (of the approximately 60 million transactions it booked in 2013) to Iran on Iran Air for passengers, including employees of foreign governments and non-governmental organizations. All of such flights originated outside of the United States from countries that permit travel to Iran, and none of such passengers were persons designated under Executive Orders 13224 or 13382 or were employees of foreign governments that are targets of U.S. sanctions. CWT and the Firm believe that this activity is permissible pursuant to certain exemptions from U.S. sanctions for travel-related transactions under the International Emergency Economic Powers Act, as amended. CWT had approximately $10,000 in gross revenues attributable to these transactions. CWT has informed the Firm that it intends to continue to engage in this activity so long as such activity is permitted under U.S. law. Part III ITEM 10: DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Executive officers of the registrant Unless otherwise noted, during the five fiscal years ended December 31, 2013 , all of JPMorgan Chases above-named executive officers have continuously held senior-level positions with JPMorgan Chase. There are no family relationships among the foregoing executive officers. Information to be provided in Items 10, 11, 12, 13 and 14 of Form 10-K and not otherwise included herein is incorporated by reference to the Firms definitive proxy statement for its 2014 Annual Meeting of Stockholders to be held on May 20, 2014 , which will be filed with the SEC within 120 days of the end of the Firms fiscal year ended December 31, 2013 . Part III ITEM 11: EXECUTIVE COMPENSATION See Item 10. ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS For security ownership of certain beneficial owners and management, see Item 10. The following table details the total number of shares available for issuance under JPMorgan Chase s employee stock-based incentive plans (including shares available for issuance to nonemployee directors). The Firm is not authorized to grant stock-based incentive awards to nonemployees, other than to nonemployee directors. 
All future shares will be issued under the shareholder-approved Long-Term Incentive Plan, as amended and restated effective May 17, 2011. For further discussion, see Note 10 on pages 247248 . ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE See Item 10. ITEM 14: PRINCIPAL ACCOUNTING FEES AND SERVICES See Item 10. Part IV ITEM 15: EXHIBITS, FINANCIAL STATEMENT SCHEDULES Exhibits, financial statement schedules 
23 Consent of independent registered public accounting firm. (b) 31.1 Certification. (b) 31.2 Certification. (b) 32 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (c) 101.INS