J.P. Morgan has named Fidelity's National Financial Services LLC clearing company as its preferred provider as it transitions clients from its Broker Dealer Services business, the companies announced Wednesday.

The deal means that National Financial Services will have the opportunity to offer clearing services to more than 100 small- and medium-sized broker-dealers that are now clients of Broker Dealer Services (BDS), a clearing and middle-office services provider that J.P. Morgan gained through its acquisition of Bear Stearns in 2008.

The preferred provider deal could lead to a substantial increase in scale for National Financial depending on how many BDS clients opt into their clearings service package. National Financial currently serves about 500 clients.

National Financial is in a good position to recruit the clients because, as J.P. Morgan's preferred provider, it has agreed to honor BDS's existing client agreements and will work closely with J.P. Morgan throughout the transition, said Sanjiv Mirchandani, president of National Financial. Joe Triarsi, the head of BDS, has also agreed to oversee the transition and, along with other members of his team, join National Financial once the switch is complete, he added.

"We're going to make it as seamless as possible," Mirchandani said. "We are committed to doing this with the minimum amount of disruption [to clients]."

Mirchandani wouldn't disclose the level of assets the deal stands to bring into National Financial, but he noted the clearing services unit has increased assets by 54 percent over the past four years. The company is looking to grow both organically and through acquisitions, he added.

"We're always looking to grow. This is a scale business, so we are committed to it," he said.

J.P. Morgan is shedding BDS from its Prime Brokerage business as part of an organizational effort to focus on its core businesses. The company noted that it will continue to self-clear for its own broker-dealers, including the asset management, Chase and private banking clients.