JPMorgan Chase  is moving its proprietary trading unit out of its investment bank and into its asset management unit, a move tied to new federal regulations that restrict commercial banks from trading for their own account.   A new alternative investment management group has been set up to house the traders. Mike Stewart will head the unit - he's currently co-head of the investment bank’s global emerging markets business.  This transition is likely to take several years.  [Click here to read the internal memo. ]

The new Volcker Rule under the Dodd-Frank Reform Act specifically bars a bank holding company from engaging in prop trading.  It's unclear, however, whether JPMorgan’s plan to effect an in-house transfer will meet regulatory approval.  The move, if permitted, could serve as a "safe harbor" for other banks like Goldman Sachs and Bank of America, who might follow suit.   [NYT Dealbook, 9/27]