Fixed Income Trade Lifecycle

Price: $995   Register now

Recommended that you register at least two weeks in advance.

Course Features

  • Course date:02/04/2020
  • Course Duration: 1 Day
  • Level: Intermediate
  • Prerequisites: Bond Knowledge
  • Method: Live & Virtual
  • Venue: MicroTek
  • Time: 9:00 am – 5:00 pm
  • Dress Code: Business Casual
  • Category:
  • Certificate: Yes
  • CPE Credits: 7
  • Course Code: 201

Fixed Income Trade Lifecycle

This one-day training seminar program introduces participants to the full trade lifecycle for Fixed Income products, from trade execution through settlement. Trades for US Treasuries, sovereign debt instruments, corporate and municipal bonds, MBS (Mortgage-Backed Securities) are included. Operations risks and metrics such as key risk indicators are highlighted throughout the program.

Course Objectives

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

  • Identify the critical functional areas that support the lifecycle of a fixed income trade
  • Understand the evolution of electronic trading on multi-dealer platforms in the fixed income markets
  • Distinguish the roles played by Dealers, Brokers, Asset Managers, Investors, Custodians and the industry infrastructure in the Fixed Income markets
  • Analyze the clearing and settlement venues for fixed income products and how these securities are held in custody
  • Identify types of operational risks that are specific to fixed income markets

 Section 1: Review Fixed Income Products and Characteristics

  • US Treasury and Agency Securities
  • Sovereign Debt Instruments
  • Corporate and Municipal Bonds
  • Mortgage-Backed Securities

 Section 2: Fixed Income Marketplaces and Trading

  • The function of OTC Dealer marketplaces for Fixed Income securities
  • How dealers make markets, provide liquidity and charge spreads
  • The RFQ (Request For Quote) trading process and “hits and misses”
  • Review multi-dealer and ECN electronic trading systems available for fixed income products
  • Trade figuration for bonds, including accrued interest
  • Position valuation and calculation of P&L

 

Section 3: Confirmation/Affirmation and Trade Matching

  • Trade Capture and Enrichment of fixed income trades
  • Identify advice of trade details from broker to client, role of the custodian or agent bank, trade allocations, and affirmations of trade details from client or client’s agent back to the broker
  • Third party confirmation and trade matching platforms for fixed income securities

 

Section 4: Trade Reporting and Comparison

  • Mandatory fixed income trade reporting (e.g., TRACE ) by streetside trade counterparties
  • Trade matching services such as RTTM (Real-time Trade Matching)
  • Identify and discuss the potential sources of trade breaks and discrepancies and how they are resolved

 

Section 5: Fixed Income Trade Clearance

  • Central Counterparties (CCP) provided by clearing houses for the fixed income market, such as the Fixed Income Clearing Corporation (FICC), a subsidiary of DTCC, and the London Clearing House (LCH) as examples
  • The role of the clearing broker and clearing services
  • Calculate settlement date obligations between counterparties and netting facilities provided by the clearing houses
  • Collateral and margin requirements for clearing members

 

Section 6: MBS Pool Allocations

  • Processing steps associated with the allocation of MBS pools to TBA trades.
    • 48 hour rule
    • Notification and settlement calendars
    • Rules for good delivery
  • Recognize the role of EPN (Electronic Pool Notification) to electronically communicate pool delivery information to receiver
  • Trade-for-Trade settlement, netting, and pair-off’s

 

Section 7: Fixed Income Trade Settlement

  • The final exchange of assets, cash and securities, as the final stage of the trade lifecycle
  • What is D.V.P. (Delivery vs Payment) settlement and how it occurs in the fixed income market securities settlement and payment systems
  • Role of the Clearing Bank
  • Book-entry securities settlement systems for fixed income products provided by the Depository Trust Company (DTC), the Fedwire Services, and Euroclear, as examples
    • Review the responsibilities of the broker/dealer, custodian and client in settlement
  • Recognize when settlement does not occur as the completion of the deal and understand fails as a source of cost and risk to the firm and its customers
  • The need for fail control and management
  • Penalties and claims that result from fails in the fixed income market

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 …
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