Derivatives Trade Lifecycle

Price: $995   Register now

Recommended that you register at least two weeks in advance.

Course Features

  • Course date:10/08/2019
  • Course Duration: 1 Day
  • Level: Beginner
  • Prerequisites: Knowledge of Derivatives
  • Method: Live & Virtual
  • Venue: MicroTek
  • Time: 9:00 am – 5:00 pm
  • Dress Code: Business Casual

Derivatives Trade Lifecycle

This one-day program introduces participants to the trade lifecycle for both listed and OTC derivatives.  Participants explore the functional building blocks of how derivatives are traded, confirmed, cleared and settled.  The program content delves into the contrasting features of exchange-traded, bilateral, cleared and uncleared products in the context of the post-Dodd-Frank, EMIR and MiFID environment.   Primary focus is on the critical post-execution processes for futures, forwards, options, and swaps and the support provided by middle and back office personnel.

Prerequisites: Basic understanding of derivative products

Who should attend: Operations professionals from both buy-side and sell-side firms, technology vendors, custodians and prime brokers, risk management personnel, internal and external auditors, regulators and compliance staff.

Course Objectives

By the end of this course, participants should be able to:

  • Analyze the functional building blocks of the derivatives trade lifecycle from trading through clearance and settlement
  • Identify the participants and their roles in the derivatives markets, including broker/dealers, Futures Commissions Merchants, Swap Dealers, investment managers, exchanges and SEFs (Swap Execution Facilities), SDRs (Swap Data Repositories) clearing houses, custodians and prime brokers
  • Investigate the various forms of trade confirmation for derivative product types
  • Explore initial and variation margin requirements for both cleared and uncleared derivatives
  • Understand collateral management processing
  • Describe the novation process
  • Consider the impact of industry regulatory changes, such as Dodd-Frank, EMIR and MiFID regulation on derivative trade processing

Derivatives Documentation

Understand pre-trade documentation for derivatives

    • Standard documentation and commercial terms between broker and client
    • Client On-boarding
    • Executing and Clearing Broker Agreements
    • Give-up agreements
    • ISDA master agreements, schedules and definitions
    • Credit Support Annex (CSA)

Derivatives Trading

Describe how derivatives are traded

  • Market structure of futures and options derivative exchanges
  • Electronic trade execution for futures and option
  • Role of Swap Dealers (SD) in the OTC derivatives markets
  • Trading interfaces between investment managers and Swap Dealers
  • OTC Bilateral derivatives trading
  • Role of Inter-Dealer Brokers (IDBs)
  • What is a SEF (Swap Execution Facility)
  • CLOB vs RFQ trades

Post-Execution Derivatives Trade Processing

  • Middle Office and Trade Support functions
  • What is a Swap Data Repository (SDR’s) and required reporting
  • Understand the Confirmation process for listed derivatives
  • Paper confirms vs electronic
  • ISDA confirms
  • Trade allegements and Affirmations
  • SwapsWire, MarkitSERV, DTCC and other derivatives trade matching platforms
  • Reconciliation of trade population
  • P&S (Purchase and Sales) reporting
  • Trade reconciliations

Clearance, Margin and Collateral Management

By the end of the session, participants will be able to:

  • Define the role of the Derivatives Clearing Houses and the clearance process
  • Outline interfaces from client to clearing broker to clearing house
  • Understand why some OTC derivatives are uncleared and the current UMR (Uncleared Margin Requirements)
  • Describe initial and variation margin and the impact of netting
  • Contrast the differences in margining for cleared vs uncleared products
  • Review the time line for margin calls and responses
  • Explain Portfolio Reconciliation processes and Dispute Resolution
  • Identify the foundation of the collateral management process
    • Collateral eligibility, hair-cuts and seg requirements

Settlement and Reconciliation

Listed derivatives trade settlement

  • Futures deliveries
  • Option exercises and assignments
  • Payment Settlements
  • Trade Compression
  • Portfolio Reconciliation
  • Dispute Resolution of recon differences
  • Position maintenance
  • Resets and trigger events
  • Payment settlement procedures
  • Early terminations, unwinds and novation

Instructor

  • Charlotte is a broadly accomplished financial services executive with over 25 years of comprehensive experience in delivering innovative and cost-effective operations and technology training solutions for equities, derivatives and fixed income product lines.  Her successful career as a senior-level manager in Operations at Credit Suisse, Paine Webber and Bankers Trust furnishes the industry expertise that …
    Continue reading Charlotte Scott