JPMorgan Chase & Co. is warning clients tempted to bet on bonds backed by loans to business and consumers that they may face trading counterparties benefitting from insider knowledge.

The bank’s securitized products sales team told clients in an email last month seen by Bloomberg News it has received increased interest from originators and sponsors of securitizations, as well as managers of collateralized loan obligations, in buying securities from their own deals.

Such purchases “may constitute inside information” and JPMorgan will require clients wanting to trade with the bank to confirm they do not possess information that’s not publicly available, including on “the potential effects of Covid-19 on the portfolio.”

It’s not uncommon for banks to warn clients of heightened risks when markets are volatile. But three investors that received the email from JPMorgan said they’d never seen a bank send a notice like that before. A spokesman for JPMorgan declined to comment on the message to clients.

Securitized bonds plunged in March as investors took fright at the prospect of companies and consumers struggling to pay their bills amid near-total economic shutdowns to stem the spread of the coronavirus.

Although credit markets have partially recovered in recent weeks, risk premiums are still elevated and investors remain fearful of further sudden drops.

The typical reporting cycle for CLOs and other forms of structured debt creates information asymmetries that could create opportunities to benefit from inside information.

Though bond spreads can react in real time to news events -- U.S. CLO premiums almost doubled in one 24-hour period amid a bout of panicked selling in March -- managers and originators of deals typically only update investors once a month on how the underlying portfolio is performing. And even then the data is often on a delay of a few weeks.

When the market is moving fast, with underlying loans being downgraded across the board and some better-positioned managers raising new money to buy distressed loans, a mid-month update telling investors how the portfolio was performing at the beginning of the month might already be out-of-date as soon as it’s published.